Despite Friday’s good growth, US indices closed the week in negative territory. On Friday, the Dow Jones (US30) Index gained 1.65% (for the week -2.40%). The S&P 500 Index (US500) increased by 2.13% (for the week -1.16%). The Nasdaq Technology Index (US100) was up 2.49% (for the week -0.62%). Stocks were under pressure last week on concerns that US tariffs would dampen economic growth and corporate earnings. Last Tuesday, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled tariffs on Chinese goods to 20% from 10%. Trump also confirmed that he will impose retaliatory tariffs against foreign countries on April 2 as planned. Trade tensions escalated on Wednesday when the European Union imposed tariffs on up to $28.3 billion worth of US goods, including soybeans, beef, and poultry, in response to US tariffs on steel and aluminum imports. In addition, Canada announced 25% counter-tariffs on about $20.8 billion worth of US-made goods, such as computers and sporting goods, as well as US steel and aluminum products.

Last week, the US dollar hit new lows for the year against the Chinese yuan, Mexican peso, euro, sterling, Japanese yen, Swedish króna and Norwegian krona. The architects of the new US foreign economic policy expected the dollar’s strength to absorb some cost of US tariffs and expected some exporters to cut prices. Instead, the dollar has mostly fallen against major currencies.

The Mexican peso (MXN) strengthened to 19.9 per US dollar in March, hitting a four-month-high, thanks to a high interest rate differential and resilient external accounts. With Banxico’s benchmark rate at 10.50%, the currency is benefiting from an attractive trade amid easing US rate expectations. In addition, the government’s calm, negotiation-oriented approach to tariff disputes has resulted in favorable concessions and minimal retaliation in key sectors such as auto and electronics.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) gained 1.86% (week ended -0.76%), the French CAC 40 (FR 40) closed 1.13% higher (week ended -1.63%), the Spanish IBEX 35 (ES35) gained 1.43% (week ended -1.93%), and the British FTSE 100 (UK100) closed 1.05% higher (week ended -0.55%) on Friday. European markets saw gains, boosted by optimism over German Chancellor Friedrich Merz’s investment plan and hopes for a resolution to the situation in Ukraine. Meanwhile, the ongoing tariff war remains a serious concern.

WTI crude oil prices rose 0.9% to settle at $67.20 per barrel on Friday after a more than 1% decline in the previous session as investors continued to assess ongoing geopolitical uncertainty over the war in Ukraine. Despite Russian President Putin’s tentative support for a ceasefire, confidence in an early resolution of the situation declined. Meanwhile, geopolitical tensions, including Chinese and Russian support for Iran and the expiration of the US energy sanctions license, continue to weigh on market sentiment. Macroeconomic uncertainty is also weighing on oil, with the International Energy Agency warning of a growing supply glut as an escalating trade war reduces demand and OPEC+ increases production.

Asian markets traded flat last week. Japan’s Nikkei 225 (JP225) rose by 0.22%, China’s FTSE China A50 (CHA50) gained 0.56%, Hong Kong’s Hang Seng (HK50) fell by 0.65% and Australia’s ASX 200 (AU200) was negative 1.99%. Hong Kong shares rose 375 points in Monday morning trading, jumping for a second session amid growing optimism over China’s announced plan to stimulate domestic demand. Australian stocks also followed the Hang Seng’s rally.

On Sunday, China’s State Council launched a special action plan to boost domestic consumption, including raising household incomes and setting up a childcare subsidy scheme. The plan also includes measures to stabilize the stock market but does not give details on when and how this might happen. China will expand real estate income channels through stock market stabilization measures and develop more bond products suitable for individual investors. Meanwhile, traders digested good economic data, including a 4% year-on-year rise in retail sales for the first two months of 2025, the fastest pace since October, and a stronger-than-expected 5.9% increase in industrial production. However, the unemployment rate rose to a two-year high of 5.4% in February from 5.2%, exceeding market expectations of 5.1%.