Natural gas prices jumped 8%. The head of the RBNZ unexpectedly announced his resignation

At Tuesday’s close, the Dow Jones (US30) Index was down 1.55%. The S&P 500 Index (US500) decreased by 1.22%. The Nasdaq Technology Index (US100) lost 0.36%. The US stock futures rose on Wednesday after Commerce Secretary Howard Lutnick said a potential tariff compromise between the United States, Canada, and Mexico could be in the works. The comments came after Trump’s 25% tariffs on goods from Canada and Mexico went into effect on Tuesday, along with additional 10% duties on Chinese imports. The measures sparked retaliation from the affected countries, raising fears of an escalating global trade war that could hamper economic growth.

The Mexican peso fell to 20.8 per US dollar, hitting a three-year low, amid escalating trade tensions between the US and Mexico. Mexican President Claudia Sheinbaum said Mexico will announce retaliatory measures this Sunday. She emphasized that Mexico has taken significant steps over the past month to crack down on drug cartels and fight the fentanyl trade, saying the US tariffs are unjustified.

Equity markets in Europe were mostly falling on Tuesday. Germany’s DAX (DE40) fell by 3.54%, France’s CAC 40 (FR40) closed down 1.85%, Spain’s IBEX 35 (ES35) lost 2.55%, and the UK’s FTSE 100 (UK100) closed negative 1.27%. European defense stocks rose in the week after the US announced it was cutting off aid to Ukraine, reinforcing the need for Europe to invest in its armed forces. European Commission President Ursula von der Leyen unveiled plans to mobilize €800 billion for defense, including €150 billion in loans and an easing of fiscal restraints.

WTI crude oil prices fell below $68 a barrel on Wednesday, remaining near a three-month low, as concerns over OPEC+ production increases pressured prices. The group confirmed plans to phase out production cuts of 2.2 million bpd starting in April, with monthly production increases of 138,000 bpd through the end of 2026. Further pressuring prices was the fact that the Trump administration suspended all US military aid to Ukraine following reports of a potential lifting of sanctions on Russia, which could lead to an increase in Russian oil exports.

The US natural gas prices (XNG/USD) rose more than 8% to surpass $4.45 per mmbbls/ton, the highest since December 2022, thanks to record LNG exports and higher demand expectations. LNG exports have been on the rise in early March after hitting a record 15.6 Bcf/d in February, helped by new installations at Venture Global’s Plaquemines plant.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) was up 0.19%, China’s FTSE China A50 (CHA50) was down 0.60%, Hong Kong’s Hang Seng (HK50) added 1.36%, and Australia’s ASX 200 (AU200) was negative 0.93%. The Chinese market opened higher on Wednesday. Traders welcomed private survey data showing an unexpected rebound in service sector activity from January’s four-month low thanks to a rise in new orders and overseas sales, as well as stabilizing employment.

The Australian dollar dipped below 0.625 US dollar on Wednesday, reversing a two-day rally despite stronger-than-expected economic growth data. Australia’s economy grew by 0.6% in the fourth quarter, up from 0.3% in the previous quarter and beating market expectations of 0.5%. On the monetary policy front, RBA Deputy Governor Andrew Hauser noted that the Central Bank is closely monitoring the impact of the escalating global trade war on domestic inflation. He emphasized that it is too early to declare victory over inflation and called for a cautious approach to further interest rate cuts.

Reserve Bank of New Zealand Governor Adrian Orr unexpectedly announced his resignation today, three years before the end of his second five-year term. Deputy Governor Christian Hawksbee will serve as acting Governor until March 31, when Orr officially steps down.