With trade tensions escalating, Asian and European stocks extended last week's declines.

By James Van Straten (All times ET unless indicated otherwise)

Top Headlines

Asian and European stocks extended last week’s declines on Monday as trade tensions continued to escalate.

President Donald Trump is set to reveal new tariffs on April 2 in an event he has dubbed “Liberation Day.” The president plans to impose levies and tariffs on any country deemed to have an unfair trading relationship with the U.S.

“You'd start with all countries, so let's see what happens,” Trump said, according to the Financial Times. His words suggest that while the tariffs may initially apply broadly, he is open to making concessions for some countries, the FT said.

On Friday, U.S. equities dropped after a hotter-than-expected reading in core PCE inflation, the Federal Reserve's preferred inflation gauge.

Market uncertainty may persist with the U.S. jobs report due Friday. Economists forecast the unemployment rate to rise to 4.2%, while nonfarm payrolls are projected at 128,000, down from 151,000 the previous month.

Gold is rallying on the back of this uncertainty, surging past $3,100 per ounce for the first time ever — up 1.2% on the day and nearly 20% year-to-date.

Bitcoin (BTC) continues to struggle, hovering just above $80,000. It's down more than 3% this month and 12% for the quarter, marking its worst performance since fourth-quarter 2022.

Now, consider ether (ETH). The second-largest cryptocurrency has performed significantly worse than bitcoin this quarter, losing 46% in a slide that's the worst since 2018.

As a result, the ether-to-bitcoin ratio has dropped to 0.02195, marking its lowest level since May 2020. At that time, bitcoin was trading below $10,000, while ether hovered just above $200. Stay alert!

Token Events

Today, there are no notable token events scheduled.

Conferences

This week, keep an eye out for the Tokenized Securities and Digital Assets Congress in New York.

Token Talk

Francisco Rodrigues, a researcher at the Bank of Portugal, delves into the realm of "stablecoins as central bank digital currency." In essence, Rodrigues explores the potential for stablecoins, cryptocurrencies pegged to the value of a fiat currency, to serve as a central bank digital currency (CBDC).

Derivatives Positioning

The latest data from the Commodity Futures Trading Commission on Friday showed that hedge funds and money managers slashed their net bearish positions in U.S. Treasury futures for a third week in a row, as reported by Bloomberg.

The report also highlighted a decrease in optimism towards the euro, while net bearish positions in the Japanese yen increased.

Market Movements:

World markets, including the FTSE 100 futures and European futures, traded in the red on Monday morning.

The Nikkei 225 index closed in Tokyo with a decline of 4%, pushing the Japanese market into correction territory. This occurred after the Nikkei fell more than 10% from its record high reached in August.

The broader Topix index also decreased by 3.2%. Together, these indexes covered a loss of at least 10% from their highs, reached in July for the Topix and August for the Nikkei.

The declines in both indexes were attributed to the anticipation of President Donald Trump unveiling new tariffs on April 2, an event he has dubbed "Liberation Day."

During an interview with the Financial Times, Trump stated that the tariffs would apply to "every country."

"We're going to put tariffs on every country that fl cheats us on trade, and we're going to be making Liberation Day for our workers and our farmers from the mendacity of foreign governments over many, many years," Trump said.

The president plans to impose levies and tariffs on any country that maintains what he considers to be an unfair trading relationship with the U.S.

"You'd start with all countries, so let's see what happens," Trump added.

His words suggest that while the tariffs may initially apply broadly, he is open to making concessions for some countries, the FT said.

On Friday, U.S. equities dropped after a hotter-than-expected reading in core PCE inflation, the Federal Reserve's preferred inflation gauge.

The PCE price index rose 0.3% in February, while economists polled by Dow Jones had expected no change. The core PCE price index, which excludes volatile food and energy components, increased 0.4%, exceeding expectations for a 0.2% rise.

The new PCE data also showed that personal income fell 0.4%, in contrast to the economists'