Bonds & Stocks
The dollar strengthened against most major peers, with the pound and yen posting the steepest declines. Treasury yields advanced across the curve, with the 10-year rate rising three basis point to 4.38%. In a sign that some investors were still prepared to take on risk, Bitcoin extended its record rally beyond $118,000.
Economy
The US equity market has moved into the “extreme greed” sentiment zone. While that can help propel markets higher in the short term, it also means downside risks are now elevated, making stocks particularly vulnerable to a reciprocal tariff shock. According to the CNN Business Fear & Greed Index, this is the most exuberant investors have been over the past 52 weeks. CNN’s index gauges equity fair value based on the concept that fear helps drive down prices, while greed elevates them.
World
Vietnam's leadership was caught off guard by US President Donald Trump's announcement of a 20% tariff. Vietnam had been pushing for a tariff in the 10%-15% range and is still seeking to lower the rate. The Southeast Asian nation, an export powerhouse that last year had the world’s third-biggest trade surplus with the US, was only the second country after the UK that Trump has announced a trade agreement with.