Global risk assets are fluctuating as the market waits for the tariff situation to become clear.

Global financial markets are entering a critical policy window this week, with the United States set to launch reciprocal tariffs on April 2, triggering a chain reaction in the market. The three major US stock indices fell collectively last week, and the Asia-Pacific market was under pressure simultaneously. Safe-haven funds pushed the spot price of gold to a record high of $3149.03 per ounce.

As the policy implementation date approaches, the market's visibility into the US economic policy framework is gradually improving. Some institutions say that policy predictability is increasing and positive signals are brewing; others are concerned about the performance of risk assets. Despite the surge in short-term volatility, the market generally believes that April 2 will set the tone for the financial markets in the coming months.

April 2 will set the tone for the future

According to Xinhua News Agency, the US government is scheduled to impose reciprocal tariffs on its trading partners starting April 2. Under the shadow of tariffs, global risk assets have continued to fluctuate recently. In the first quarter of 2025, US stocks surged and then fell back, with the S&P 500 index experiencing a maximum drawdown of over 10%. In the last week of March (March 24-28), the Dow Jones Industrial Average suffered four consecutive declines, the Nasdaq index fell by more than 2% for the week, and the S&P 500 index fell by more than 1% for the week; the Asia-Pacific market was affected, with Japan's Nikkei 225 index falling by more than 1% last week, South Korea's KOSPI index falling by more than 3%, and A-shares and Hong Kong stocks falling slightly.

Strong risk aversion among investors pushed international gold prices to continuously break historical highs. As of the evening of April 1, the spot price of London gold reached $3149.03 per ounce, up more than 2% last week; the COMEX gold futures price once rose to $3177 per ounce, up nearly 4% last week.

As the policy implementation date approaches, short-term volatility in the financial market has intensified. Some institutions believe that positive signals are brewing: the market's visibility into the US policy framework is improving. At the beginning of this week, the US stock market saw a slight rebound, and the volatility index (VIX), which reflects the implied volatility of the stock market, has fallen from a peak of 28 to below 20, while the MOVE index, which reflects the volatility of the bond market, has also fallen significantly. After a decline on Monday, major Asia-Pacific stock markets rebounded collectively on Tuesday (April 1), with Japan's Nikkei 225 index slightly up 0.02% and South Korea's KOSPI index up more than 1%.

CITIC Securities believes that the current overseas stock market reflects more of tariff shock trading and recession expectation trading, rather than actual recession trading. At the enterprise level, major operating indicators have not weakened, but expectations are weakening. Risk aversion trading driven entirely by expectations may come to an end after the risk event, and overseas equity markets are expected to recover after the tariff "storm" subsides.

However, some institutions remain cautious. The Barclays research team believes that the market has underestimated the risk of the tariff shock in early April. For the first time in recent quarters, the Barclays research team is concerned about the performance of risk assets. It points out that the implementation of tariffs on April 2 may set the tone for the financial markets in the coming months. If the scope of the tariffs implemented is broad and the tax rates are high, risk assets will face challenges in the second quarter. If the scope of exemptions is large, or if the US continues to postpone actual tariff actions, risk assets may rebound. From an asset allocation perspective, Barclays has been overweight global equities rather than fixed-income assets for the past few quarters.

Goldman Sachs raises US recession probability forecast

From a global macroeconomic perspective, the market generally predicts that the US implementation of reciprocal tariffs will push up consumer prices and further increase the risk of economic recession. In its latest report, Goldman Sachs raised its forecast for the core personal consumption expenditure (PCE) price index at the end of 2025 by 0.5 percentage points to 3.5%, and simultaneously raised the probability of a US economic recession from 20% to 35%.

Goldman Sachs said that tariffs may affect economic activity through four channels: first, affecting people's real disposable income and consumption expenditure; second, causing unrest in financial markets and leading to tighter financial conditions; third, the uncertainty of trade policy will suppress corporate investment; and fourth, the slight positive effect of reduced trade deficits. Although Goldman Sachs still believes that the US Congress may pass personal and corporate tax reforms to moderately boost economic growth, fiscal policy is unlikely to offset the impact of tariffs and immigration policies. Based on this, Goldman Sachs lowered its forecast for US real GDP growth in the fourth quarter of 2025 by 0.5 percentage points to 1.0%.

What is the impact of tariff policies on the domestic stock market? CITIC Securities said that after the tariff "storm" subsides, the A-share market is expected to warm up and the Hong Kong stock market to adjust. From the performance perspective, core assets have shown extremely strong operating resilience, and the opportunity for left-side layout has matured; from the liquidity perspective, active funds have clearly receded, and industrial themes need catalysts and time to accumulate momentum. In terms of configuration, the idea of igniting technology, boosting the supply side, and making up for consumption shortcomings will continue. In addition, the substantial impact of reciprocal tariffs on the fundamentals of Hong Kong stocks may be limited. On the one hand, Hong Kong stocks have a relatively low exposure to US revenue, and on the other hand, the 2025 earnings expectations for Hong Kong stocks calculated based on Bloomberg consensus expectations are still slightly upwardly revised under the two rounds of tariffs that have already been implemented.