Market sentiment just got a bit of breathing room. The head of Europe's central bank recently noted that trade tensions—which have been a major source of uncertainty—are showing signs of cooling down. That's the good news.

But here's the catch: she also flagged that the environment remains volatile and unpredictable. Even with some easing of trade friction, the underlying risk landscape hasn't fundamentally shifted. We're still dealing with an unstable backdrop that could swing markets in either direction without much warning.

For traders and portfolio managers, this creates a tricky situation. On one hand, reduced trade friction could support risk appetite and broader market stabilization. On the other, persistent volatility means you need to stay sharp and keep your risk management tight. Don't get comfortable just because tensions eased a bit—the floor beneath us is still shaky.