I, like many refer to them as the "Liberation Day" tariffs, as that is a talking point that seems to appeal to the President and avoids calling them "reciprocal" which they are not.

There have been some interesting "surprises" overnight.

U.S. stock futures dropped between 2% and 3% a little after midnight but are now down less than 1% or even in positive in some cases (depending on whether you focus on the S&P 500 or Nasdaq 100 futures). They are moving rapidly.

European stock markets are down 2.5% to 3% across the board.

What is interesting though, is that Chinese ETF's (KWEB, FXI) are up over 5%.

We will come back to stocks, but bonds were the big story overnight!

If you were up last night waiting to see if there was a last-minute reprieve, your social media likely got overwhelmed with stories about the bond market – with the U.S. longer dated maturities being the focal point.

The 30-year bond briefly breached 5%. The always important 10-year yield rose above 4.5% as yields marched incessantly higher from around 10 pm until just after midnight. They are currently back to 4.37%, about 7 bps higher than where they closed.

The yield story is the biggest, so here is our take on what happened:

Some large and relentless volumes went through during a period of low liquidity. Why would anyone dump treasuries overnight when the market has limited liquidity relative to the U.S. hours? Large foreign or off-shore firms all have desks to trade treasuries during U.S. hours, so it was a bit weird. Leads me to think someone either was trying to "make a statement" or someone was trying to push markets and trigger stops (seems plausible). So in any case, while the move was eye-opening, I dismiss some of it, as it seems to have been done with intention.

To a large degree, this was a global phenomenon. Most major countries (except for Germany – which is the EU "safe haven") moved higher. Though not to the extent the U.S. did and certainly not with the same level of focus from market watchers.

Could this be foreign selling of bonds? China has come up as a culprit in the selling. Maybe other countries were selling bonds overnight to "hurt" the U.S., but that doesn't seem that likely. As mentioned already, anyone with size, probably does the bulk of their trading during U.S. hours. I cannot think of many entities who have large exposure to U.S. bonds (large enough to move markets) that doesn't transact primarily during U.S. hours. So I'm not sure this theory holds much water for the overnight move.