Global markets sought balance this weekend between stronger-than-expected nonfarm payrolls and volatile geopolitical developments. With the Fed chair nomination process advancing and a sudden cabinet shakeup in Washington, market participants are intensively reassessing policy continuity and the re-anchoring of risk premia.
1. Global Market Performance Review
Global equity assets exhibited a notable "low-level repair" pattern last week. The three major US indices snapped a five-week losing streak, with the S&P 500 closing the week up 3.4% (at 6,570.94), the Dow Jones rising nearly 3.0% (to 46,430.85), and the Nasdaq surging 4.4% (to 23,977.43), driven by a strong tech rebound.
European equities also posted strong gains, supported by expectations of a temporary de-escalation in geopolitical risks. The pan-European STOXX 600 rose 3.92% (to 597.69). Germany's DAX gained 3.89%, France's CAC 40 rose 3.48%, and the UK's FTSE 100 surged 4.70%, boosted by bank stocks.
Asia-Pacific markets were mixed. Japan's Nikkei 225 rose 1.26% on Friday (to 53,123), narrowing its weekly loss to -0.4%. South Korea's KOSPI stabilized after earlier volatility, rising 2.66% for the week (to 5,583.90). China's A-shares edged lower on pre-holiday effects, with the Shanghai Composite falling 0.86% (to 3,880.10), while Hong Kong's Hang Seng showed resilience, gaining 1.48% (to 25,116.53).
In commodities and FX, oil prices staged an "epic" surge after attacks on Middle Eastern energy facilities and an approaching ultimatum deadline. WTI crude soared 12.46% for the week (to USD 112.06/bbl). Safe-haven demand pushed spot gold up 4.08% (to USD 4,676.42/oz). The US dollar index (DXY) was steady, edging down 0.12% (to 100.03), as markets digested the impact of strong jobs data on the rate path.
2. Major Policy and Personnel Changes
A significant cabinet shakeup occurred over the weekend. President Trump formally removed Pam Bondi as Attorney General on April 2, appointing Deputy Attorney General Todd Blanche as acting head. This follows the earlier replacement of the Homeland Security Secretary last month. Additionally, Markwayne Mullin has been confirmed by the Senate as the new Homeland Security Secretary.
The Fed chair nomination process has entered a critical window. The Senate Banking Committee has preliminarily scheduled a hearing for April 16 for nominee Kevin Warsh. Markets are closely watching Warsh's views on "fiscal-Fed coordination" and aggressive balance sheet reduction, which will be key to anchoring the Q2 interest rate trajectory.
Globally, the IMF's latest assessment indicates that the window for policy easing by major central banks is narrowing in H1 2026 due to rebounding energy prices. With inflation expectations rising in many countries, market expectations for rate cuts by the ECB and Fed in H2 have been revised down from 3-4 to 1-2.
3. Key Economic, Trade, and Geopolitical Developments
On the macro front, US March nonfarm payrolls rose by 178,000, far exceeding the consensus estimate of 60,000, while the unemployment rate edged down to 4.3%. The strong labor data reinforced expectations that the Fed will keep rates higher for longer, temporarily offsetting some recession fears tied to geopolitical conflicts.
The evolving situation in the Middle East remains a core challenge to global trade security. With military threats to shipping through the Strait of Hormuz, global crude shipping insurance premiums remain at historic highs. The Trump administration reiterated its stance on energy facilities over the weekend, suggesting the "de-risking" process remains bumpy.
On trade policy, China maintained a stable liquidity environment during the Qingming holiday. With the switch to "summer time" complete, A-share investors next week will need to contend with earlier feedback from US market volatility. At the industry level, new trade compliance rules effective April 1 are pushing overseas-oriented companies toward higher credit ratings and greater transparency.
4. Key Events for the Week Ahead
In the second week of April, markets face a full slate of macro indicators. First, attention will focus on upcoming US consumer expectations data. After Q1 inflation volatility, consumer inflation expectations will directly influence the Fed's policy stance and that of the incoming chair.
Second, in the first full trading week after the cabinet reshuffle, markets will watch for any new moves in financial regulatory policy from the Justice Department and other core agencies. Additionally, preliminary Senate discussions on the Warsh nomination will trickle out, affecting the anchoring of global interest rates in Q2.
On geopolitics, watch for fresh statements from oil-producing countries on output cuts, as well as catch-up or reversal moves in Asian markets after the long holiday. Investors are advised to monitor official data and communiqués from authoritative sources to maintain an objective and accurate market view.
Disclaimer: This report is for informational purposes only and does not constitute investment advice or directional guidance. Markets involve risk; invest with caution.
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