Trump's Tariff Talks Spark Market Volatility

Market Volatility Expected to Persist Until Trump's Talks with Mexico and EU Tariff Policy Take Effect

QCP Capital, a Singapore-based crypto trading firm, has warned that market volatility is expected to persist until President Trump's talks with Mexico and the EU's tariff policy takes effect. The firm's analysts noted that Treasury yields bear-flattened, with 2-year yields rising while 10-year yields fell, signaling short-term inflation concerns and "long-term trade war" risks. Equities dropped, gold prices fluctuated, oil spiked, and crypto saw sharp sell-offs.

QCP Capital believes that the uncertainty will stick around as President Trump gears up for talks with Mexico and keeps hinting that new tariffs on the European Union will "definitely happen." Speaking to reporters Sunday night, Trump repeated his warning to the E.U., saying tariffs are definitely on the table because of a big trade deficit with the bloc.

Analysts at QCP Capital suggest that the decorrelation "reinforces the view that today's risk-off move is driven by cross-asset portfolio rebalancing rather than a single-asset event." They also noted the growing gap between New York and London gold prices, which could mean traders are unwinding popular carry trades or facing issues moving gold between vaults.