Week Ahead—Behind the Calm: Trade War Volatility Brews

Markets kicked off the week under a deceptively calm atmosphere. For the second consecutive week, gold surged to record highs, reflecting safe-haven demand. Yet, the broader sentiment across equities and currency markets remained muted, as investors stayed cautiously on edge amid ongoing trade war uncertainties.

Despite last week’s relatively quiet moves, underlying market tension persists, with fragile investor confidence being tested by both geopolitical risks and fundamental macroeconomic concerns.

Week Ahead—Behind the Calm: Trade War Volatility Brews

This week, market attention remains firmly on the evolving U.S.–China trade tensions and the broader progress of trade negotiations between the U.S. and several other countries.

However, President Trump’s continued policy flip-flops have left global investors perplexed, adding layers of uncertainty to an already fragile environment. Markets are closely monitoring every move and message for signs of what’s to come.

In addition to trade developments, several key economic events are on the calendar this week, including China’s PBoC interest rate decision on Monday and the U.S. S&P Global PMI release on Wednesday, both of which could significantly influence market sentiment and direction.

1. PBoC Rate Decision — April 21^st

China’s central bank is expected to either lower the Loan Prime Rate (LPR) or issue dovish forward guidance to support economic stability amid mounting pressure from the ongoing trade conflict.

Even if no immediate rate cut occurs, markets will be watching for any signals of further monetary easing as policymakers aim to cushion the economy against external shocks.
The PBoC is likely to strike a more accommodative tone to address increasing challenges stemming from the trade war and slowing domestic momentum.

2. U.S. S&P Global PMI Data — April 23^rd

The April PMI report will offer a timely read on the health of the U.S. manufacturing and services sectors. With global trade tensions escalating, any signs of slowing activity or weakening demand could heighten concerns over a potential economic slowdown and weigh on investor sentiment.

A disappointing PMI reading could also deepen the recent weakness in the U.S. Dollar, especially if it challenges expectations for Fed policy going forward.

Key Takeaway for the Week

While the ongoing trade war continues to dominate headlines, a lack of fresh developments may temporarily shift market attention toward economic fundamentals. Investors are now looking for signs of how the newly imposed Trump tariffs could start to impact both the U.S. and global economies.

The upcoming U.S. S&P Global PMI data will be especially important, serving as a key indicator for how trade tensions are weighing on business activity and overall economic momentum.

Meanwhile, gold’s bullish trend remains intact amid persistent uncertainty, though investors should be cautious of a potential short-term correction due to overbought conditions.
As for U.S. equities, which are already trading in a bearish zone, this week could bring a decisive move depending on how economic data and geopolitical developments unfold.