Trump delivers 'neck breaking' pause on tariffs as markets 'rejoice'

A barely believable few days in financial markets has taken another dramatic turn, as President Trump delivers a neck breaking U-turn on his tariffs barely 48 hours after the White House resoundingly quashed the idea of a 90-day pause.

Market participants have quite rightly rejoiced at the news in the hope that the delay will allow room for negotiation, compromise and an ultimate softening in the tariffs that would limit the global economic fallout. This now appears increasingly likely.

Clearly there are no guarantees with Mr. Trump, yet it feels incomprehensible that the tariffs would remain in place at such devastatingly high levels given the profound implications for the US economy, which would almost certainly be staring down the barrel of recession.

Not exactly a black mark that the 47th President would want tarnishing his legacy.

Stock markets are leading the gains, with US equity indices posting near double digit gains and on course for their best days in many a year. The safe-havens are also reversing their gains in FX, namely the yen and the franc, and the dollar has recouped some ground on the euro.

Spare a thought for the poor old Chinese yuan, however, which continues to languish at 18 year lows on the dollar. In this instance, retaliation from Chinese authorities appears to have backfired, and the striking of an agreement here appears more challenging than ever.