Highlights

• Trump’s imposition of 145% tariffs on China triggers 8% drop in USD YTD, S&P 500 down 6%, euro and yen surge nearly 10%; China retaliates with 125% tariffs, escalating trade war1.
• U.S.–China trade talks in disarray: Beijing denies any recent Xi-Trump contact or active negotiations, contradicting White House claims and fueling market uncertainty2.
• China reaffirms 5% GDP growth target, signals readiness for RRR and rate cuts; yuan fixes stronger, officials pledge to stabilize FX and support exporters3.
• Swiss franc hits decade high vs. USD as global investors seek havens; SNB faces negative rate speculation, sight deposits swell, Swiss bond yields turn negative14.
• Oil trades near $67/bbl as OPEC+ considers supply hike for June; gold falls to $3,296/oz amid risk-on sentiment and profit-taking, despite ongoing geopolitical risks15.
• North Korea confirms troop deployment to Russia, deepening Moscow-Pyongyang military ties; Putin orders unilateral ceasefire in Ukraine for May 7–11 holidays45.
• MicroStrategy buys 15,355 BTC ($1.42B), total holdings now 553,555 BTC; Bitcoin rises to $95,000, MSTR up pre-market, Tether mints $1B USDT on Tron918.
• Airbus acquires Spirit AeroSystems assets for $439M; Boeing to reacquire Spirit for $4.7B in stock, aiming to resolve supply chain issues6.
• Toyota proposes $42B buyout of Toyota Industries at 40% premium, boosting Japanese equities; Nikkei surpasses 36,000, Topix gains8.
• Merck KGaA to acquire SpringWorks Therapeutics for $3.9B cash, expanding rare tumor portfolio; deal accretive to earnings by 20277.
• U.S. and Ukraine near minerals deal excluding past aid repayment, set to attract investment and secure U.S. access to critical resources10.
• Nationwide blackout hits Spain and Portugal, grid operator investigates possible cyberattack; power mostly restored but cause unclear12.

Commentary

Markets are digesting the shockwaves from Trump’s dramatic escalation of U.S.–China tariffs, which have upended global risk sentiment and triggered sharp moves across asset classes1. The U.S. dollar’s 8% YTD slide and the S&P 500’s 6% drop reflect capital flight and eroding investor confidence in U.S. assets, with the euro, yen, and Swiss franc all surging as investors seek shelter114. The lack of clarity and conflicting statements from Washington and Beijing on the status of trade talks are compounding volatility, leaving traders wary of further policy surprises and sudden reversals2.

China’s policy response is two-pronged: reaffirming its 5% growth target and signaling imminent monetary easing, including RRR and rate cuts, while also taking steps to stabilize the yuan3. This should cushion some of the domestic fallout from tariffs but underscores the risk of further currency and trade disruptions. Meanwhile, Goldman Sachs warns that U.S. tariffs could threaten up to 16 million Chinese export jobs, highlighting the potential for a significant drag on global growth and supply chains if the standoff persists20.

Safe-haven flows are evident, with the Swiss franc at decade highs and negative yields re-emerging in Swiss bonds. The SNB may be forced into policy action if appreciation continues14. Commodities are mixed: oil is steady near $67/bbl as OPEC+ weighs a supply hike, but gold is under pressure as traders unwind hedges and rotate into risk assets, despite ongoing geopolitical risks in Ukraine, the Middle East, and the Korean peninsula15. The nationwide blackout in Spain and Portugal adds to the sense of fragility in European infrastructure and could prompt renewed cyber risk assessments12.

In corporate news, cross-border M&A is active: Airbus and Boeing are reshuffling Spirit AeroSystems assets to address supply chain woes6, while Toyota ’s bold $42B buyout proposal is buoying Japanese equities8. In healthcare, Merck KGaA’s $3.9B acquisition of SpringWorks signals continued appetite for specialty pharma deals7. Crypto markets remain buoyant, with MicroStrategy ’s latest $1.4B Bitcoin purchase and Tether ’s $1B USDT minting supporting digital asset flows; Coinbase’s upcoming Bitcoin yield fund could further institutionalize crypto exposure91819.

Traders should brace for continued FX volatility, watch for policy signals from the SNB, PBOC, and OPEC+, and monitor U.S.–China headlines for any sign of de-escalation or further disruption1231415. Equity markets remain vulnerable to policy shocks and rotation themes, while fixed income and commodity markets may see further safe-haven and supply-driven moves. Stay nimble and risk-aware—headline risk remains elevated across the board.