- April 12, 2025
- Posted by: Tresmark
- Category:
Tresmark: It’s easy to say markets are volatile or panicked—but behind the headlines, trillions of dollars have vanished, companies are collapsing, and families are getting crushed.
That’s what’s unfolded over the past two weeks, as the U.S. took on China in a financial war—and the rest of the world got caught in the crossfire.
When two apex predators lock eyes at the watering hole—neither backs down. The growls get louder, the tension thicker, until it explodes into a brutal fight of claws and muscle. It’s loud, ugly, and over power & territory that neither is willing to surrender.
That’s where the U.S. and China are right now—not just grappling over trade, but fighting to define who writes the rules of tomorrow’s world. For them, it’s existential. For the rest of us? It’s a dust storm that’s blinding markets, shaking currencies, and sending asset prices into free fall.
As a result: the Dollar Index dropped below 100, oil crashed 20%, the Euro hit a 3-year high, gold reached an all-time high, and bond yields surged 20%.
The sad truth? Everyone gets hurt. And what happens this month could shape the global order for decades.
Bond Markets in Frenzy
In a typical global recession, the 10-year Treasury yield should drop—but instead, it’s jumped from 3.90% to 4.50% last week. A mix of stagflation fears, a hedge fund trades gone bad, and growing cracks across capital markets. While everyone is looking at equity markets, the real carnage is in bonds and credit markets.
The Fed’s Dilemma
The Fed is quietly back in QE mode, prioritising market stability over inflation control as Jay Powell transforms Fed/s role to lender of last resort once again.
As a result, we’re likely to see inflation spike over 5% and unemployment over 6%. The $120 surge in gold affirms markets sees this coming.
China’s Wounds
The U.S. has inflation and unemployment to tackle. But for China, it’s something deeper. Its status as the world’s export machine just got rattled. The sting? A subtle but brutal disruption of China’s $1.1 trillion exports. It’s really a 9/11 moment for the trading empire as 1.3billion people embrace for impact.
Pakistan Interest Rates
Chances of a rate cut in May just got stronger. Every country is now searching for ways to cushion this shock. The MPC should even consider meeting earlier to assess the fallout and offer relief where it matters.
IMF Board Meeting
While the SLA is done, there’s no date for the IMF Executive Board review. Some analysts expect approval by month-end. But if it doesn’t come before the budget, it could become a challenge for the government.
Rupee Outlook
Tresmark’s view on the Rupee remains steady. We expect minor corrections—5 to 10 paisa per week but nothing more substantial. Could that change post-June? Possibly. But in a world this fluid, June feels like a lifetime away.
