Global Markets Grapple with Uncertainty Amidst Shifting Policies

Singapore: Trading activity was subdued on Thursday as investors navigated the complexities arising from the U.S. administration’s inconsistent pronouncements on trade tariffs and the Federal Reserve’s direction. A recent upswing in the dollar’s value also showed signs of faltering.

Within the past week, U.S. President Donald Trump has both criticized Federal Reserve Chairman Jerome Powell and then backtracked on demands for his resignation. Furthermore, the outlook on tariffs applied to Chinese goods remains unclear despite considerable speculation.

A source indicated that the U.S. government might consider decreasing tariffs on Chinese imports pending discussions with Beijing. This followed a report suggesting that the White House was contemplating tariff reductions. However, Treasury Secretary Scott Bessent and White House representative Karoline Leavitt stated that such actions would not be implemented unilaterally.

Tony Sycamore, an analyst at IG, remarked, “The erratic policy shifts are unprecedented. President Trump appears to be experimenting to identify the appropriate strategies, unafraid to test approaches and reverse them if unsuccessful.”

MSCI’s index of Asia-Pacific stocks excluding Japan experienced a slight decrease of 0.17%, diverging from Wall Street’s upward trend on Wednesday, which was fueled by optimism about easing trade tensions between the U.S. and China.

U.S. futures demonstrated stability, with both the Nasdaq and S&P 500 futures increasing by approximately 0.2%. EUROSTOXX 50 futures saw a modest rise of 0.16%. Japan’s Nikkei index showed a gain of 0.86%.

According to reports, the U.S. administration informed Japan’s trade delegation that it could not offer special concessions regarding tariff policies, rejecting Tokyo’s appeal for reconsideration during recent ministerial discussions.

Salman Ahmed from Fidelity International observed, “Short-term market fluctuations are presently quite pronounced… This elevated volatility is expected to persist due to the evolving fundamental rules and the changing global economic structure.”

Asia Under Pressure as U.S. Assets Wobble

Ahmed added, “It is evident that we have surpassed peak globalization; the unrestricted movement of trade and capital will not be the norm going forward.” He made these comments at the IMAS Investment Conference and Masterclass 2025 in Singapore.

The dollar’s value declined somewhat, following a recent recovery driven by relief after Trump’s decision concerning Powell. Investor confidence in U.S. assets remains fragile.

The dollar decreased by 0.15% against the yen, reaching 143.24. The euro rose by 0.15% to $1.1331, while the Swiss franc strengthened by about 0.2% to 0.8294 per dollar.

Long-term Treasury yields remained stable as Trump’s decision on Powell appeared to reduce concerns about U.S. monetary and fiscal stability, with the 30-year yield holding steady at 4.3675%.

The 10-year Treasury yield decreased by approximately 2 basis points to 4.3675%.

Federal Reserve Bank of Cleveland President Beth Hammack stated that considerable uncertainty in the economic outlook supports a cautious approach to monetary policy.

Markets anticipate slightly over 80 basis points in rate cuts by December.

Oil prices stabilized after a decline, with sources suggesting OPEC+ may consider accelerating increases in oil production in June.

Brent crude futures increased by 0.2% to $66.26 a barrel, and U.S. crude rose by 0.18% to $62.38 per barrel.

Gold’s price continued to climb toward a new record, increasing by 1.2% to $3,329.03 an ounce.