Central banks concerned about Trump's trade wars' impact

Many central banks have raised concerns about how U.S. President Donald Trump's trade wars are affecting global economic growth and inflation. Investors are feeling anxious about the unpredictable market conditions, leading to cautious trading in global equity and bond markets. This week, major central banks signaled that the uncertainty from the trade wars is impacting the economic outlook. Despite this, the MSCI World equity index saw a small increase of 0.7%, breaking a four-week losing streak. The S&P 500 rose 0.5%, and European stocks gained over 1%, showing their best performance in five weeks. Even with these gains, many investors are worried about the lack of clear direction in the markets. With the end of the quarter approaching and more tariffs expected to be announced on April 2, the trading environment could remain unpredictable. The uncertainty is affecting businesses and consumers, which might lead to less investment, hiring, and spending. U.S. stocks have been underperforming compared to international markets, trailing by about 13 percentage points. European markets, particularly Germany, have benefited from a shift in fiscal policy that could boost growth. However, European Central Bank President Christine Lagarde warned that the outlook remains uncertain due to trade issues. This week, gold prices rose 1%, marking the 11th weekly gain in 12 weeks, while the Nasdaq index posted its first weekly gain in five weeks. However, European defense stocks saw a slight decline, their first loss in six weeks, despite a significant overall increase since Germany's fiscal policy changes. In the UK, government bond yields have risen due to poor public finance figures ahead of next week's budget update. Meanwhile, markets in Turkey suffered greatly amid concerns over the political situation. Looking ahead, a number of key economic reports are due next week, including purchasing managers' index data from several major economies.