Financial analysis provided by Exness’ Michael Stark, Financial Content Leader, Stanislav Bernukhov, Senior Trading Content Specialist, and Antreas Themistokleous, Trading Content Strategist.
What every trader should know about shifting global markets.
The second quarter of 2025 begins under the shadow of sharp rotations in capital, increased political risk, and growing market segmentation. While US equities and cryptocurrencies struggled in Q1, European stocks, gold, and the yen emerged as havens. Traders now face an increasingly complex global environment marked by softening US growth, surging European confidence, and persistent uncertainty over monetary policy direction.
Q1 Recap: A period of strategic rotation
Q1 was characterized by aggressive deleveraging in US and crypto markets, triggered, in part, by President Donald Trump’s surprise imposition of tariffs on Canada, Mexico, the EU, and China. Capital flowed from US equities into overseas assets, notably Europe and Asia.
The Nasdaq and S&P 500 declined sharply—affected not only by policy volatility but also by sector-specific developments like NVDA’s drop following the launch of a Chinese AI engine. The tech-heavy Nasdaq is now showing signs of pessimistic breadth and low volume—indicators of a market adrift.
Yet, the pain in the US has been a gain for others: Germany’s DAX hit an all-time high in March, and Hong Kong’s Hang Seng has been in a solid uptrend since January.
The rise of ‘strong Europe’
Europe is seeing a significant narrative shift. Yields on Germany’s 30-year bunds spiked amid rising military expenditure discussions, driving capital into the euro. Once lagging behind the greenback, the euro is rallying, with futures’ open interest increasing in tandem.
The phrase “Make Europe Great Again” may have started as political satire, but it now resonates across bond and FX markets. In early March, the euro-dollar pair recorded its strongest weekly performance in nearly two decades, reinforcing the sense of…
