In global markets, a negative trend predominated last week due to the impact of the automotive tariffs announced by US President Donald Trump, shifting attention next week to employment data to be announced in the US and reciprocal tariffs.

While the employment data to be announced is expected to shed more light on the uncertain US economy, the implications of Trump’s tariff actions and future tariff steps on the global trade system are closely monitored. Trump signed an executive order last week imposing a 25% customs duty on imported cars and trucks to increase domestic production. Speaking at the signing ceremony at the White House, Trump referred to it as the “beginning of America’s liberation day.” Trump reiterated that the real liberation day for the US would be April 2, when reciprocal tariffs would be announced, and automobile tariffs would take effect on that date. Trump stated, “We are starting to collect from April 3.” He also mentioned that they would apply tariffs to drugs to bring the pharmaceutical industry back to the country. Along with the reciprocal tariffs to be announced next week, possible retaliation statements from the US’s trading partners are expected to have an impact on global risk perception. While many countries reacted to the US president’s tariff decision on the automotive industry last week, it was reported that the European Union (EU) was preparing measures against the new tariffs on imported cars imposed by the US. Concerns about tariffs increase uncertainties about the steps the Federal Reserve (Fed) will take in the future. Last week, Chicago Fed President Austan Goolsbee stated that the next interest rate cut might be delayed due to economic uncertainties. Minneapolis Fed President Neel Kashkari also mentioned that he was not sure about the impact of tariffs on the US economy, suggesting that the possibility of raising prices required higher interest rates, while the possibility of slowing economic growth necessitated lowering borrowing costs. Kashkari pointed out that the Fed might need to stay in place in monetary policy for a long time until the situation becomes clear. St. Louis Fed President Alberto Musalem mentioned that it was not clear that the effect of tariffs would be temporary and that indirect effects might require interest rates to be kept stable for a longer period. Boston Fed President Susan Collins also stated that the tariffs imposed by the Trump administration would accelerate inflation in the US, but it was uncertain how lasting this effect would be. In terms of macroeconomic data, the growth rate of the US economy in the fourth quarter of 2024 was revised upwards. Accordingly, the US economy surpassed expectations by growing at 2.4% in the fourth quarter of 2024. The core personal consumption expenditures price index, which the Fed considers as an inflation indicator, increased by 0.4% on a monthly basis and by 2.8% on an annual basis in February, showing the highest monthly increase since January 2024. The market expectation was for the core personal consumption expenditures price index to increase by 0.3% on a monthly basis and by 2.7% on an annual basis, just like in January. The consumer confidence index measured by the University of Michigan was revised downward to 57 in March, marking the lowest level since November 2022. Consumers’ short-term inflation expectations rose from 4.3% in March to 5%, reaching the highest level since November 2022. Long-term inflation expectations also increased from 3.5% to 4.1%, the highest rate recorded since February 1993. With these developments, the 10-year Treasury yield in the US stood at 4.26%, and the dollar index at 104.0 as of last week. Concerns about the consequences of President Trump’s aggressive tariff policies, increasing uncertainties with geopolitical risks, and gold prices, which hit a record of $3,086.79 per ounce last week, closed at $2,085 with a 2.03% weekly increase. Meanwhile, the barrel price of Brent oil ended the week at $72.4 with a 0.9% increase on a weekly basis.

NEW YORK STOCK EXCHANGE TRADED NEGATIVELY The New York Stock Exchange saw a mixed trend last week. The Washington administration’s new tariffs on imported cars had a negative impact on the shares of car manufacturers with extensive supply chains throughout North America. Shares of US car manufacturers General Motors fell by 7.4% on Thursday and by 1.1% on Friday. Ford’s shares also dropped by 3.9% on Thursday and by 1.8% on Friday. With these developments, the S&P 500 index lost 1.53%, the Nasdaq index 2.59%, and the Dow Jones index 0.96% on a weekly basis. In the new week, Monday will see the Dallas Fed Manufacturing Activity Index, Tuesday the Manufacturing Purchasing Managers’ Index (PMI), ISM Manufacturing PMI, construction permits, and JOLTS job openings, Wednesday the ADP employment report, factory orders, and durable goods orders, Thursday the trade balance, weekly jobless claims, service sector PMI, and ISM service sector PMI, and Friday the non-farm payrolls, unemployment rate, and statements by Fed Chairman Jerome Powell.

EXCEPT FOR THE UNITED KINGDOM, EUROPEAN STOCK MARKETS TRADED NEGATIVELY Last week, European stock markets, except for the UK, showed a negative trend, with attention turning to European Central Bank (ECB) President Christine Lagarde’s statements and a busy data agenda for the new week. European Commission President Ursula von der Leyen stated that they would evaluate the US decision to impose a 25% customs duty on imported cars and other expected measures together and protect their economic interests against them. Von der Leyen expressed deep regret over the US decision to impose tariffs on European automotive exports and stated, “We will consider this announcement together with the other measures the US foresees in the coming days.” Analysts noted that the reactions of the EU side would be followed along with the reciprocal tariffs to be announced next week, stating that trade wars could deepen in the coming period. Additionally, while developments related to the Russia-Ukraine War were being monitored in the region, von der Leyen emphasized that while financial and military aid would be provided to Ukraine in the short and long term, sanctions against Russia would continue to maintain pressure on this country. Ukrainian President Volodymyr Zelensky stated that they would not give up on the territorial integrity and independence of their country. With these developments, the DAX 40 index in Germany fell by 1.88%, the CAC 40 index in France by 1.58%, and the MIB 30 index in Italy by 0.76% on a weekly basis, while the FTSE 100 index in the UK rose by 0.14%. Wednesday will see the Manufacturing PMI in Germany, Thursday inflation in Germany, and the Producer Price Index (PPI) in the Eurozone, and Friday factory orders in Germany in the data agenda of next week in Europe.

ASIAN STOCK MARKETS TRADED NEGATIVELY Last week, Trump’s new tariff steps for the automotive sector also had an impact on Asian markets, leading to a selling-weighted trend in regional indices. The decline in South Korean and Japanese automotive shares stood out, while in China, Trump’s statement that he was willing to reduce customs tariffs on China if the Chinese company ByteDance sells TikTok limited the selling trend in Chinese markets. Analysts noted that optimism about China negotiating tariffs with the US gained strength, stating that the news flow on the topic was at the center of investors’ attention. Analysts also said that Chinese automotive manufacturers had a more limited trade volume with the US compared to other automotive manufacturers in the region