Market Highlight 08.04.2025

While the Vietnamese market was closed for a public holiday, global financial markets experienced heightened volatility on Monday in response to escalating trade tensions stemming from the U.S reciprocal tariffs announcement and countermeasures from other major economies. Japan’s Nikkei 225 recorded its steepest decline since August 2024, while Hong Kong’s Hang Seng plunged 13% - its largest single-day drop since the 1997 Asian Financial Crisis. France’s CAC 40 index fell 4,8%, extending a four-day losing streak not seen since the early days of the COVID-19 crisis. Even traditionally safe-haven assets such as U.S Treasuries and gold came under heavy selling pressure, reflecting the absence of any reliable hedge amid today’s unprecedented market turmoil. More than 50 countries have reportedly contacted the White House to initiate trade negotiations. In the meantime, China unveiled a broad set of retaliatory measures, including a 34% tariff on all U.S goods. The European Commission has also proposed a 25% retaliatory tariff on a wide range of U.S products, effective Monday, in response to Washington’s recent hike on steel and aluminum tariffs.

The U.S Dollar Index rose for the second consecutive session (+0,56%) as global recession fears mounted amid the rapidly intensifying tariff war. Markets are now increasingly pricing in the likelihood that the Federal Reserve could begin cutting interest rates as early as May to support the U.S economy, with expectations shifting toward 4 rate cuts in the second half of this year - up from the two previously projected at the FED’s most recent policy meeting.

In Vietnam, the USD/VND interbank rate hovered near the 25.800 level in the final trading session before the holiday break, ending the week with a cumulative gain of roughly 230 VND following the U.S announcement of reciprocal tariffs. Upward pressure on the exchange rate remains significant, as domestic market sentiment continues to be shaped by deepening global trade uncertainty. The USD/VND interbank rate is now projected to test the 26.000 level in April.

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