Limited Market Rebound; Focus Turns to April 2 “Liberation Day” Tariff Announcement
The pattern being noted is similar to what one can observe in equities, where bounces off extreme oversold positions have been tepid and shallow as the overall technical picture has turned negative. Concerns about the US economic slowdown remain, while a rapid unwinding of momentum trades in equities has led to significant damage in PNL and money managers retreating to full defensive mode.
We expect markets to continue its soft rebound from last week into month-end, with the next major catalyst being the ‘liberation day’ reciprocal tariff announcement from Trump scheduled for April 2nd. Rumors of a softer tariff response will go a long-way to recover some of the recent technical damage in US stocks, helping to spark a global rally along with the recent jump in EU/China stocks.