Following a broad sell-off, both U.S. stocks and bonds showed resilience with modest recoveries across Asian and European markets. Treasury yields for 10- and 30-year notes fell by 3-4 basis points, while equity markets in the U.S. closed in positive territory. Despite these gains, the dollar remained under pressure, particularly in the Asia-Pacific and European sessions, though it managed to hold above key technical levels. Swiss National Bank President Schlegel summed up sentiment by asserting there is currently "no alternative" to U.S. Treasuries. Among G10 currencies, only the Australian and New Zealand dollars weakened due to dovish policy moves, while emerging market currencies posted mixed results.

Asia Pacific Markets

In the Asia-Pacific region, currencies and bonds responded to diverging monetary policies. The Japanese yen strengthened as the dollar dipped to an eight-day low near JPY144.00. Long-dated Japanese government bonds saw a sharp sell-off after a weak 20-year auction, sending yields to record highs. The Bank of Japan is exploring how quickly it can scale back bond purchases.
Meanwhile, the Australian dollar dropped following a 25-basis-point rate cut by the Reserve Bank of Australia. Governor Bullock hinted the debate had even considered a deeper 50-point cut. Growth and inflation forecasts were downgraded, with the market adjusting year-end rate expectations accordingly.

European Markets

The euro briefly reached $1.1290 before pulling back to around $1.1225, failing to hold above the four-week downtrend line. It remains below the 20-day moving average, reflecting continued consolidation. Eurozone growth projections were trimmed by the European Commission, with GDP expected to grow 0.9% this year, down from the previous 1.3% forecast. The IMF offers even lower figures, suggesting downside risks.
In the UK, sterling rose slightly but met resistance near $1.3400. Bank of England Chief Economist Pill urged caution on rate cuts, and inflation is projected to spike in April due to higher household utility costs, pushing CPI estimates higher.

American Markets

The U.S. dollar index fluctuated, reaching a high of 100.50 before easing back toward 100.00 in early European trade. U.S. market participants seemed largely unaffected by Moody's downgrade, showing resilience compared to more reactive markets in Asia and Europe. Treasury Secretary Bessent warned of potential retaliatory tariffs, while China expressed displeasure over renewed U.S. pressure on Huawei. Meanwhile, the Federal Reserve appears more cautious, with futures markets now pricing in the possibility of only one rate cut this year. Several Fed officials, including Bostic, are scheduled to speak, reinforcing this more restrained outlook.