Recent analysis by QCP Capital highlights significant global market disruptions stemming from the initial trade policies enacted during the Trump administration. Observing a concerning bearish flattening in the bond yield curve, the data illustrates an uptick in the 2-year yield alongside a decline in the 10-year yield. This trend underscores prevalent market apprehensions regarding short-term inflation and the potential long-term implications for global economic stability due to ongoing trade tensions.
Additionally, a notable increase in the price spread between gold traded in New York and London has emerged. This phenomenon not only signals unwinding EFP arbitrage trades but also points to possible logistical complications in gold transfer between vaults. Such circumstances further accentuate investor concerns regarding the anticipated broadening of tariff applications.
Amid these developments, the cryptocurrency sector has seen a pronounced sell-off, with nearly $2 billion in liquidations observed prior to the U.S. market opening. Ethereum (ETH) experienced a steeper decline compared to Bitcoin (BTC), suggesting that the prevailing risk-off sentiment is primarily influenced by cross-asset portfolio adjustments rather than isolated events. Market volatility is expected to persist until the resolution of ongoing negotiations between the U.S. and Mexico, alongside the finalization of EU tariff implementations.