On April 1, global currency and bond markets remained volatile on the eve of a significant geopolitical turning point, while US stock futures surged strongly, driven by Asian and European stock markets. Trump's nationwide speech, scheduled for 9 p.m. Eastern Time, is seen as a key variable in determining the pricing of global macro risks in the second quarter of 2026.
Geopolitical Turn and Macro Risk Repricing
Since the outbreak of the Iran conflict in late February, global macro logic has been dominated by risk aversion and energy inflation. The market rebound on Wednesday is essentially an initial cleaning of the "war premium." With the White House signaling the possibility of direct talks with Iran, the oil supply premium that drove inflation expectations has quickly dissipated. This marginal geopolitical improvement has provided a valuable breathing window for the previously oversold global stock markets, especially for the S&P 500 and Nasdaq indices, which, after experiencing severe declines in March, are attempting to achieve a technical bottom with this opportunity.
Cross-Asset Implications
The potential easing of geopolitical tensions has triggered multidimensional chain reactions across asset classes. In commodity markets, a 3% drop in crude oil has directly alleviated inflation expectations, yet its impact on bond markets has not been fully realized, as the Federal Reserve remains steadfast in its cautious stance on rate cuts. In the currency market, the yen and the Korean won have recorded significant rebounds amidst a warming risk appetite, reflecting a resurgence in carry trades. However, if Trump's speech fails to reach a substantive agreement, the navigational status of the Strait of Hormuz remains unclear, and energy prices may remain high for a longer period, prompting a further reset of cross-asset pricing. Moreover, with the Good Friday holiday approaching, market liquidity may shrink, amplifying volatility driven by data changes.
Return of Growth Logic to Hedge Against Inflation Logic
The private sector wage and retail sales data to be released later this week will become the next focus for the market. Although the geopolitical conflict has dominated headlines, macro investors are gradually returning to considerations of the fundamental U.S. economy. If the labor market shows unexpectedly weak performance, the market may be forced to reassess expectations for the Federal Reserve to resume rate cuts, even if energy prices decline. Significant declines in the earnings of Nike and RH have already sounded an alarm for weakness on the consumer side. Therefore, the current rise in US stock futures is not only a geopolitical victory but also a contest between alleviating inflationary pressures and the risk of economic growth stalling.
