T3 Monthly Insights - Apr 2025

April continued to be a period of panic and uncertainty amidst the Trump administration’s stand on tariff implementation on U.S imports. Despite market fear and volatility skyrocketing - evident from the volatility index reaching an all-time high of 52.33 - the U.S market saw some recovery towards the second half of the month. The S&P 500 index experienced large intra-month swings and closed the month at 5,569.06, falling only by 0.76%, while the Nasdaq Composite made a recovery to close at 17,446.34 (+0.85%) - the first monthly gain this year.  

The U.S. continued its aggressive tariff stance in the first half of the month. April 2, coined “Liberation Day” by President Trump, announced that 10% baseline tariffs would be implemented on all countries, with higher tariffs for countries in trade surplus with the U.S - notably 54% on China, 20% on the European Union and 10% on the U.K. Mass panic-selling saw major indexes S&P 500 dipping to its lowest price of 4,982.77 since April last year and Nasdaq to 15,267.91. The panic was short-lived however, with the U.S administration announcing just days later that most tariffs would be suspended for 90 days, albeit still subject to the 10% baseline tariffs. Nevertheless, Sino-American trade tensions escalated - not only were the Chinese solely exempted from suspension, but their tariffs were continually raised throughout the month of April to 145% eventually. The Chinese fired back with a 125% tariff on American goods, and the constant tit-for-tat resulted in Asian and European markets suffering significant losses - the Hang Seng Index fell over 10%, Japan's Nikkei 225 dropped 7%, and the European FTSE 100 experienced its worst day since the pre-covid era.  

The U.S. economy added 228K jobs in March, well above a downwardly revised 117K in February and beating forecasts of 135K - boasting the strongest figure in three months. However, consumer spending continued its slowdown, with the Personal Consumption Expenditure Price Index falling from 2.7% in February to 2.3% in March. Additionally, American GDP contracted by 0.3% in Q1 of 2025, the first contraction in three years. Consumer confidence slipped 7.9 points to 86.9, the lowest reading since May 2020. The US core inflation rate inched closer to the Fed’s target of 2%, following the decreasing trend from the start of the year and down to 2.8% in March, the lowest level in 4 years.  

The International Monetary Fund slashed projected growth in the American economy to 1.8% in April, down 0.9% from January forecasts. Economists and analysts at J.P Morgan have increased estimates of a 60% chance of a U.S recession up from 40%, with increasingly weakening consumer confidence and slowing momentum being the main drivers. These indicators pointing towards weakening U.S. economy have bolstered investors’ continued trend of selling the dollar, and the greenback slid to a 3-year low of 97.92 on April 21. 

The Euro continued its appreciation against the dollar, closing the month at 1.1328 and enjoying a 4.73% monthly increase. The Eurozone expanded by 0.4% in the first quarter, surpassing the U.S. for the first time in nearly three years. Inflation fell to 2.2% in March, continuing its downward trend from 2.3% in February. However, the Organisation for Economic Cooperation and Development (OECD) has cut its eurozone GDP growth forecast to 1.0% for 2025, down from 1.3% in its December projections. Economists are cautiously monitoring rising trade tensions and inflationary pressures to determine whether Europe can sustain its momentum of outperforming Wall Street.  

The Pound reached its highest level in three years on April 28 at 1.3441, and closed the month strongly at 1.3329, up 3.18% m/m. Inflationary pressures continued to ease, with the CPI falling to 2.6% in March from 2.8% in February, moving closer to the Bank of England’s (BOE)  target of 2%. Economists forecast the BOE to potentially cut interest rates to 4.25% from the current 4.50%, largely driven by weakening economic growth projections.  

“Safe haven” assets like gold had the best performance, continuing to breach all-time highs, soaring to an unprecedented $3,500.92 per ounce in late April. On the other hand, key global commodity crude oil has experienced its worst performance in four years, falling 19% to close below $60 per barrel. Major factors include Saudi Arabia’ willingness to sustain their low production despite falling prices. Economists forecast a continued fall in oil prices, with the World Bank projecting oil prices to fall 12% in 2025 and a further 5% in 2026, returning to pre-COVID-19 levels.