15 April, 2025

Diversification in times of uncertain markets

Summary

Highlights

Uncertainty on US trade policy and its potential impact on economic activity will keep market volatility high.
Geographical diversification* is key, while gold is also benefitting in this market environment.
Tariffs will lead to lower growth and higher inflation. Corporate profits are likely to come under pressure.

In this edition

Over the past week, markets have experienced extreme uncertainty caused by US policy gyrations on tariffs. This uncertainty has started to weigh on US assets, including the dollar and US Treasuries. Despite the 90-day pause announced on 9 April, the US average tariff rate remains at a 100-year high, with rising US tariffs on China triggering retaliation from the latter. We are moving towards a rewiring of the global trade system that will have long-lasting implications for financial markets. In the China-US competition, Europe could benefit. Tariffs will affect the global economy through lower growth and higher inflation, ultimately impacting corporate profits. Against this backdrop, we believe investors should remain cautious, diversify* across markets and geographies, and consider gold.

Equities suffered from the policy flip-flop, while gold shined

Key dates

15 Apr

Germany ZEW
economic sentiment,
EZ industrial production

16 Apr

China GDP, industrial
production and retail
sales, US retail sales

17 Apr

ECB policy rates decision, US housing starts and building permits, SK policy rates decision

*Diversification does not guarantee a profit or protect against losses.

Read the full article on the Amundi Research center

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