• Trade war and U.S. geopolitical shifts dominated Q1

• World stocks flat overall but U.S. tech giants whacked

• Gold has had best quarter since 1986

• Dollar on course for worst Q1 since GFC

(Reuters) - Most investors knew things could turn turbulent this year given U.S. President Donald Trump's return to power in the world's biggest economy and financial market, but few predicted the kind of a rodeo ride it has been so far.

Scan the surface and world stocks are almost where they started the year, while volatility gauges like the VIX are nowhere near the peaks they scaled during the pandemic or financial crash.

But look closer and the scale of what has been happening jumps out.

Gold, the ultimate safe port in a storm, has had its best quarter since 1986 due to Trump's trade war and the dollar DXY. is flirting with its worst start to a year since the 2008 global bust.

Just as jarring, the 'Magnificent Seven' U.S. tech giants have been hit for six. They have been a cash cow for portfolios for years but have shed nearly $2 trillion and been left for dust by Chinese rivals and Europe's defence firms.

Chief Investment Officer of multi-asset fund manager Candriam, Nicolas Forest, said the way that markets had changed tack had been remarkable.

"The Trump trade has completely reversed," he said.

Whereas the major risk back in January was that Trump's 'America first' policies would push inflation back up and prevent U.S. interest rate cuts, "now the most important risk is recession risk," Forest said.

That has spun the $140 trillion global bond market 180 degrees.

Benchmark U.S. Treasuries look set to end Q1 with a respectable 2.7% return, with their yields, which are a proxy of borrowing costs, down more than 20 basis points US10YT=RR.

At the same time, Berlin's historic plan to release its self-imposed debt brake to allow higher defence spending - prompted by Washington scaling back its military support - has propelled German Bund yields up over 40 basis points.

It is the biggest quarterly move in yields since 2023 and the first time they have moved in the opposite direction to Treasuries since 2021.

Japan's 10-year JGB yields, meanwhile, have surged to their highest since 2008 on expectations for further Bank of Japan rate hikes. At almost 1.6%, JGB yields are up almost 50 bps, set for their biggest quarterly jump since 2003.

DOLLAR DRAMAS

The dollar's 4% drop has given emerging market currencies a rare chance to shine.

Trump's re-engagement with Russian President Vladimir Putin has helped the rouble surge a whopping 35%, although it remains heavily restricted in most major economies by sanctions.

Poland's zloty and the Czech crown that also stand to benefit if the Ukraine conflict ends are near the top of the list, too, with gains of over 5%, while even Mexico's peso MXN= and Canada's dollar are in positive territory despite all their tariff traumas.

"The dollar view has unravelled very quickly this year," said State Street Global Markets' Michael Metcalfe. "I think there has been an element of take what was said at the start of the year and just flip it."

At the bottom of the FX pile are Turkey's lira and the Indonesian rupiah. The former is down nearly 7%, much of it after Turkish President Tayyip Erdogan's main political rival was detained last week.

The rupiah, meanwhile, has hit its lowest since the 1998 Asian financial crisis amid worries about Jakarta's finances and that it is sliding back towards military domination.

Bitcoin has been volatile as usual. It raced up almost 20% when Trump took office, only to dive nearly 30% when his plans for a U.S. cryptocurrency reserve failed to impress.

And if you think that's bad just look at Tesla's share price versus its main rival BYD since inauguration day. Ouch, Elon!

GOLD STARS AND COFFEE KICKS

Oil has yo-yoed both on supply-and-demand issues but also the Middle East ceasefires between Israel and Hamas and Hezbollah that already look under threat.

Gold has surged 17%. Copper has defied the global economy worries for once to jump 11%. Coffee lovers beware, though, raw arabica prices are up 18% and nearly double where they were this time last year after some severe droughts.

Q2 doesn't look like it is going to get any easier on the whole.

Trump will be detailing his grand global tariff plan he has dubbed 'liberation day' on Wednesday. For investors, the big question is whether it will end up triggering recessions.

Neil Robson, Head of Global Equities at Columbia Threadneedle, points to forecasts that it could lift effective trade-weighted tariffs on goods globally from 2.5% to 10% or even more.

Given that could lead to a bruising world downturn, what is his prediction for Q2?

"We are either in for a significant risk off (period), or we are in for a rebound."