InvestMacro

At the end of Monday, the Dow Jones Index (US30) fell by 2.08%. The S&P 500 Index (US500) was down 2.70%. The Nasdaq Technology Index (US100) decreased by 4.00%. The US market had its worst day of the year yesterday as fears that President Donald Trump’s tariff policies could lead the US economy into recession dampened investor sentiment. Sentiment deteriorated further after President Trump did not rule out the possibility of a US recession this year and noted short-term economic shocks associated with his trade and fiscal agenda in an interview Sunday Morning Futures on Fox News Channel. Trump imposed 25% tariffs on Mexico and Canada last week, but then exempted most goods for a month, creating uncertainty around his trade policy. The US president also raised tariffs on Chinese goods, prompting retaliatory duties from China. He is set to impose retaliatory tariffs globally from April 2, which could further undermine sentiment in the markets. Shares of major technology companies including Tesla (-15.4%), Nvidia (-5%), and Meta (-4.4%) were among the hardest hit, contributing to the broader market’s decline. Tariffs imposed by the Trump administration have raised fears that inflation could rise and make it harder for the Federal Reserve to cut interest rates.

The Goldman Sachs note provides insight into the recent behavior of hedge funds in the stock market, indicating a significant reduction in their exposure to equities. Hedge funds significantly reduced their holdings in stocks last Friday, the largest such move in two years. The size of the moves made by some hedge funds on Friday can be compared to those seen in March 2020, during the first COVID pandemic outbreak, and January 2021. During those periods, hedge funds were forced to wind down their short positions in stocks favored by retail investors.

The Canadian dollar weakened to US $1.44, nearing a one-month low amid sharp policy changes, escalating tariff threats from the US, and disappointing economic data. In a landmark election, former Central Bank official Mark Carney became Canada’s new Prime Minister, taking a hard-line stance and promising to maintain tariffs on US goods until “Americans show us respect,” which, combined with his relative inexperience, increased uncertainty about future trade negotiations and domestic policy direction. In addition, the February jobs report showed that the Canadian economy only added about 1,000 positions versus the expected 20,000, adding to concerns about the economy’s momentum. Given current economic concerns, including trade tensions and a weakening labor market, the Bank of Canada is expected to cut interest rates from 3.00% to 2.75% at its March 12 meeting.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 1.69%, France’s CAC 40 (FR 40) closed down 0.90%, Spain’s IBEX 35 (ES35) fell 1.32%, and the UK’s FTSE 100 (UK100) closed down 0.92%. In Europe, traders overlooked a stronger-than-expected recovery in German industrial production in January.

WTI crude oil prices fell to $66 a barrel on Monday amid expectations of weaker demand and ample supply. US President Donald Trump and Treasury Secretary Scott Bessent have signaled that the US could face economic difficulties in the medium term due to trade wars with Canada, China, and Mexico, in addition to promises of aggressive government spending cuts. In China, fresh data showed that consumer and producer prices fell more than expected in February, raising concerns that goods consumption is not being affected by credit growth. This increased the impact of the OPEC+ agreement to raise oil production as early as April after the organization’s members struggled to meet their commitments to cut output.

Asian markets were flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.38%, China’s FTSE China A50 (CHA50) declined 0.53%, Hong Kong’s Hang Seng (HK50) fell by 1.85%, and Australia’s ASX 200 (AU200) was positive 0.18%. Traders continue to sell stocks amid persistent deflationary pressures in China in February, driven by weakening seasonal demand and cautious household spending due to job and income concerns. In addition, the US is set to inspect China-made chip models used in consumer electronics, which could lead to the imposition of additional tariffs on Chinese products. Meanwhile, China will conclude two sessions today and some traders expect new measures to stimulate the sluggish economy.

Australian consumer sentiment rose to a three-year high in March, helped by the Reserve Bank of Australia’s interest rate cut in February and easing cost-of-living pressures. However, business confidence readings turned negative in February, indicating continued economic concerns. The Australian dollar hovered at $0.627 on Tuesday after three consecutive sessions of declines, hurt by widespread risk aversion in financial markets amid growing fears of a US recession. The Aussie was also hampered by lingering economic uncertainty and lingering deflationary pressures in China, its biggest trading partner, as traders awaited policy announcements after a key meeting in Beijing.

The US market showed the worst week since September. On Friday, the Dow Jones (US30) rose 0.52% (-2.50% for the week). The S&P 500 Index (US500) gained 0.55% (-3.32% for the week). The Nasdaq Technology Index (US100) gained 0.74% (-3.76% for the week). The US stock markets saw a volatile day on Friday, as Wall Street recovered from earlier losses amid continued uncertainty over President Trump’s trade policies. Stocks recovered losses after Fed Chairman Powell said the Central Bank was in no rush to cut interest rates, but the overall economic outlook remains clouded by trade tensions and political uncertainty. Still, economic data showed mixed results as a weaker-than-expected employment report showed non-farm payroll employment rose by 151k in February, while the unemployment rate rose to 4.1%.

Former Canadian Central Bank official Mark Carney has won the race to become leader of Canada’s ruling Liberal Party and will succeed Justin Trudeau as prime minister. During the campaign, Carney said he supported retaliatory tariffs against the US in dollar terms and a coordinated strategy to increase investment. He has repeatedly complained that Canada’s growth under Trudeau has not been good enough. There is a risk that the new prime minister will seek a snap election to get a popular mandate.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) fell by 1.75% (week-to-date +1.44%), France’s CAC 40 (FR40) closed down 0.94% (week-to-date -0.23%), Spain’s IBEX 35 (ES35) gained 0.17% (week-to-date -0.64%), and the UK’s FTSE 100 (UK100) closed negative 0.03% (week-to-date -1.47%) on Friday. In Europe, European Union leaders reaffirmed their commitment to Ukraine and pledged increased military support during an emergency meeting on Thursday.

WTI crude oil rose 1% to $67 a barrel on Friday after US President Donald Trump threatened sanctions against Russia if it fails to reach a ceasefire with Ukraine. Trump mentioned he was “strongly considering” sanctions against Russian banks and tariffs on Russian goods due to the ongoing attacks.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) was down 1.72%, China’s FTSE China A50 (CHA50) added 0.29%, Hong Kong’s Hang Seng (HK50) increased by 4.71%, and Australia’s ASX 200 (AU200) was negative 3.36%.

China’s consumer prices fell the most in 13 months. Chinese consumer prices fell to 0.7% y/y in February 2025, exceeding market projections that expected a 0.5% decline and reversing the 0.5% rise in the previous month. This marked the first consumer deflation since January 2024 amid weakening seasonal demand following the Spring Festival in late January. On a month-on-month basis, CPI fell by 0.2%, shifting from January’s 11-month high of 0.7%, the first decline since last November. Meanwhile, producer prices fell to 2.2% y/y, marking the 29th consecutive month of decline. The offshore yuan depreciated to around 7.25 per dollar as investors reacted to weaker-than-expected Chinese inflation data that underscored lingering risks of deflation.

Japan’s index of leading economic indicators, which gauges the economic outlook for the coming months based on data such as job offers and consumer sentiment, rose to 108.0 in January 2025 from a downwardly revised 107.9 in December 2024, the highest since last October. Meanwhile, consumer sentiment weakened to its lowest level since March 2023.

The US stocks fell on Thursday as trade uncertainty and changes to the Trump administration’s tariff policy fueled investor anxiety. The Dow Jones Index (US30) was down 0.99%. The S&P 500 Index (US500) decreased by 1.78%. The Nasdaq Technology Index (US100) fell by 2.79%, hitting its lowest level since last November.

The US government currently holds about 200,000 bitcoins worth about $18 billion. The order also says it will create a US digital asset reserve to store other confiscated crypto assets. However, the news did not enthuse investors as the US government will not buy bitcoin to replenish the reserve, meaning there is no new buying pressure on the market. White House Chief of Staff David Sachs announced the reserve will be funded solely by bitcoins seized in criminal and civil forfeiture cases.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) jumped 1.47%, France’s CAC 40 (FR40) closed 0.29% higher, Spain’s IBEX 35 (ES35) gained 0.15%, and the UK’s FTSE 100 (UK100) closed 0.83% yesterday. The DAX index rose more than 1% to a new record high above 23,360 on Thursday, with most stocks rising as European leaders pledged to increase defense spending and support Ukraine, reacting to Donald Trump’s change in US policy. EU leaders welcomed proposals for greater budgetary flexibility in defense and a plan to jointly borrow up to 150 billion euros to finance military spending. The European Central Bank delivered an expected interest rate cut but took a more cautious stance on future rate changes, revising its near-term inflation forecasts upward.

WTI crude oil prices traded around $66 a barrel on Friday, starting the worst week since October and the longest weekly losing streak since December 2023. The potential impact of changes in global trade pressured prices. Although President Donald Trump eased some tariffs on Mexico and Canada before April 2, retaliatory tariffs on Canada remain, and China’s measures will take effect next week. The bearish sentiment is compounded by the fact that OPEC+ plans to restart production in April, which coincides with the prospect of a restart of the Kirkuk-Ceyhan pipeline and increased production from Kazakhstan’s Tengiz field, adding to fears of oversupply.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) fell 1.60%, China’s FTSE China A50 (CHA50) gained 0.66%, Hong Kong’s Hang Seng (HK50) rose 0.59%, and Australia’s ASX 200 (AU200) was negative 1.26%.

At the end of Wednesday, the Dow Jones (US30) was up 1.14%. The S&P500 Index (US500) was up 1.12%. The Nasdaq Technology Index (US100) jumped 1.36%. The White House confirmed that General Motors, Ford, and Stellantis received a one-month extension on tariffs related to the US-Mexico-Canada agreement, easing concerns about the impact on the economy. Investors viewed the move as a potential signal that the administration could negotiate further tariff waivers, which prompted a rebound in the broad market. Traders await Friday’s monthly jobs report after ADP data showed the US private sector added just 77,000 jobs in February, the smallest gain in seven months. Meanwhile, the dollar faced further pressure from a rising euro as Germany’s proposed €500 billion infrastructure fund and plans to overhaul borrowing rules boosted growth prospects in the Eurozone.

Equity markets in Europe were mostly rising on Wednesday. Germany’s DAX (DE40) jumped 3.38%, France’s CAC 40 (FR40) closed 1.56% higher, Spain’s IBEX 35 (ES35) gained 1.40%, and the UK’s FTSE 100 (UK100) closed negative 0.04%. Berlin announced a historic increase in defense and infrastructure spending. Friedrich Merz, Germany’s incoming Chancellor, confirmed that the main centrist parties will create a €500 billion infrastructure fund and amend the constitution to remove fiscal restraints on defense and security spending.

WTI crude oil prices rose to $67 a barrel on Thursday, likely a technical rebound after hitting multi-year lows in the previous session. Some relief came after a US official suggested that President Donald Trump may slap a 10% tariff on Canadian energy imports in line with trade agreements. However, sentiment remained bearish due to concerns over the impact of the US tariffs and OPEC+’s decision to increase production. Tariffs and retaliatory measures could slow global growth and weaken oil demand. Meanwhile, EIA data showed that US crude inventories rose more than expected, adding to oversupply fears.

Asian markets rose steadily yesterday. Japan’s Nikkei 225 (JP225) rose by 1.07%, China’s FTSE China A50 (CHA50) gained 1.26%, Hong Kong’s Hang Seng (HK50) jumped 3.41%, and Australia’s ASX 200 (AU200) was positive 0.34%. China reacted sharply to the new US tariffs, declaring its willingness to wage “any type of war” with the US and dismissing the US fentanyl explanation for imposing the tariffs as a “flimsy excuse.”

The New Zealand dollar climbed as high as 0.573 US dollars on Thursday, hitting a one-week-high, amid improving risk sentiment after the US granted a temporary tariff reprieve to automakers. On Monday, President Donald Trump granted automakers a one-month reprieve from imposing 25% tariffs on imports from Canada and Mexico. The kiwi was further supported by fresh fiscal stimulus measures promised by China, which signaled increased efforts to boost consumption and protect economic growth amid ongoing trade tensions with the US.

Vietnam’s annual inflation rate fell to 2.91% in February 2025, a three-month low, down from 3.63% in January. The slowdown was driven by lower inflation in the service sector. Meanwhile, core inflation, which excludes volatile items, slowed to 2.87% from 3.07% in January.

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.

At Monday’s close, the Dow Jones Index (US30) decreased by 1.48%. The S&P 500 Index (US500) was down 1.76%. The Nasdaq Technology Index (US100) lost 2.20%. The US stocks continued to decline on Monday amid the release of pessimistic economic data, concerns over the imposition of tariffs, and geopolitical disagreements between Washington and Ukraine. The latest ISM report showed that US manufacturing growth in February was stronger than expected, driven by weaker demand, slower production, and higher prices due to tariffs, among other factors. Investors are now focused on Friday’s monthly jobs report for more labor market updates.

The Mexican peso fell to around 20.7 per US dollar, hitting its lowest level in a month, as trade war fears weighed on sentiment after US President Donald Trump confirmed that 25% tariffs on goods from the country will take effect early Tuesday. In terms of economic news, Mexico’s manufacturing sector contracted for the eighth consecutive month, indicating continued weakness in industrial activity. Business confidence also fell in February, underscoring the gloomy economic outlook. Along with weak labor, inflation, and GDP numbers, the latest data has reinforced expectations that Banxico will further reduce borrowing costs.

The Canadian dollar slipped to 1.45 per US dollar, marking its eighth straight session of losses and hitting a one-month low, as rising trade war fears continued to dampen market sentiment. US President Donald Trump confirmed that 25% tariffs on Canadian goods will take effect as planned, saying there is “no room left” to avoid tariffs.

Equity markets in Europe were mostly up on Monday. Germany’s DAX (DE40) rose by 2.64%, France’s CAC 40 (FR40) closed 1.09% higher, Spain’s IBEX 35 (ES35) Index gained 0.19%, and the UK’s FTSE 100 (UK100) closed positive 0.70%. European leaders met over the weekend and showed consensus on increasing military spending to leverage a potential peace deal in Ukraine and respond to signs of reluctance to coordinate defense with the United States.

WTI crude oil prices fell to around $68 a barrel on Tuesday, near a three-month low, as US President Donald Trump’s tariffs against key trading partners took effect and OPEC+ signaled plans to resume suspended production. Beijing immediately retaliated by imposing additional tariffs of up to 15% on imports of key agricultural products from the US, which will take effect on March 10. That has heightened fears of a global trade war that could hurt economic growth and reduce energy demand. On Monday, OPEC+ said it would start rolling back production cuts of 2.2 million barrels a day from April 1, restoring supplies that have been capped since 2022, adding to downward pressure.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) was down 0.91%, China’s FTSE China A50 (CHA50) fell by 1.11%, Hong Kong’s Hang Seng (HK50) lost 0.83% and Australia’s ASX 200 (AU200) was negative 0.34%.

On Tuesday, China imposed tariffs on US goods and other trade measures in response to US President Donald Trump’s decision to raise tariffs on all Chinese imports to 20% from 10%. China’s Ministry of Finance announced 15% tariffs on US chicken, wheat, corn, and cotton, and 10% tariffs on soybeans, sorghum, pork, beef, fruits, vegetables, seafood, and dairy products. These measures will take effect on March 10. The new tariffs coincide with the start of a key annual policy meeting in China this week. The country is expected to adopt new stimulus measures to help its economy withstand the impact of the increased tariffs.

The Australian dollar slipped as low as $0.62 on Tuesday, nearing a one-month low, after minutes from the Reserve Bank of Australia’s February meeting showed policymakers focused on downside risks to the economy, indicating a more dovish stance. The Central Bank also noted weaker-than-expected fourth-quarter inflation data and slowing wage growth. The currency’s fall was exacerbated after US President Donald Trump confirmed that tariffs on Mexico, Canada, and China would take effect as planned. Given Australia’s heavy reliance on exports, any disruption to global trade is expected to have a significant impact on the economy.

At the end of Friday, the Dow Jones Index (US30) added 1.39% (for the week +0.80%). The S&P 500 Index (US500) gained 1.59% (for the week -1.20%). The Nasdaq Technology Index (US100) is up 1.62% (for the week -3.62%). The latest data showed PCE prices rose by 0.3% month-over-month in January, matching expectations, while the annualized rate fell to 2.5% from 2.6% in December. The report also showed an unexpected 0.2% drop in consumer spending, the first decline in nearly two years, while incomes rose by 0.9%, the biggest increase in a year. Market attention has now turned to US trade policy.

In recent weeks, US tariff threats and doubts about whether its defense commitments will hold up have become the biggest concern for businesses, investors, and politicians. This means uncertainty, and lack of visibility is often associated with business caution when making investment decisions. The postponement of tariffs on Canada and Mexico supported the assumptions of those who believe that tariffs were a negotiating tactic and may have contributed to the complacency that until tariffs are in place, they are not worth believing in until they are seen. Nevertheless, in late February, when Trump reiterated his threat to impose tariffs on Canada and Mexico on March 4, the Dollar Index posted its biggest gain in three weeks and ended February at two-week highs.

After the White House announced a digital assets’ summit this week, President Trump took to the social media platform Truth to explain some of the details, specifically mentioning a strategic reserve that would include XRP, SOL, and ADA. All three “altcoins” rose sharply against this backdrop, pushing the broad market higher over the weekend.

Equity markets in Europe were mostly up on Friday. Germany’s DAX (DE40) rose by 0.002% (for the week +0.36%), France’s CAC 40 (FR 40) closed higher by 0.11% (for the week -0.33%), Spain’s IBEX 35 (ES35) gained 0.58% (for the week +2.91%), and the UK’s FTSE 100 (UK100) closed positive 0.61% (for the week +1.74%).

German inflation was unchanged at 2.3% in February, but the core rate fell to a more than three-year low of 2.6%, while French inflation fell more than expected to a four-year low of 0.8%. Meanwhile, inflation in Italy and Spain accelerated to 1.7% and 3.0%, respectively, in line with expectations. The ECB is expected to cut interest rates for the fifth consecutive time on Thursday and signal further cuts amid slowing inflation and weak economic growth.

British Prime Minister Keir Starmer said Britain, France, and Ukraine are working on a ceasefire plan to present to the United States. Starmer’s Sunday leaders’ summit contrasted with Ukrainian President Volodymyr Zelenskyi’s meeting at the White House on Friday. Zelensky won the support of European leaders after a contentious White House meeting Friday in which a rare earth metals deal was canceled and Trump told Zelensky to return when he was ready for peace. Starmer also promised to increase military spending to 2.5% of gross domestic product (GDP) by 2027. A cut in US aid could force Europe to take more responsibility for Ukraine’s security.

WTI crude oil prices rose to around $70.1 a barrel on Monday, helped by strong data on manufacturing activity in China, the world’s largest oil importer, as well as ongoing tensions between the US and Ukraine that could lead to supply disruptions. Traders were also concerned about Trump’s announcement of new tariffs on Mexican, Canadian, and Chinese goods, raising fears of weakening global demand.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) decreased by 3.55%, China’s FTSE China A50 (CHA50) lost 0.58%, Hong Kong’s Hang Seng (HK50) was down 2.26%, and Australia’s ASX 200 (AU200) was negative 1.49%.

According to experts, if the US imposes 10% tariffs on goods from China, it will force the People’s Bank of China (PBoC) to cut rates by 20-30 bps. At the same time, analysts believe that the PBoC will be forced to reduce the rate by 50 bps without tariffs due to weak economic growth. Thus, by the end of 2025, we may see a cumulative reduction in the PBoC rate by 70-100 bps. For Asian indices, this would be a fundamental message for growth.

The Australian dollar, often seen as a proxy for the yuan’s exchange rate, also benefited from stronger-than-expected Chinese PMI data, while investors awaited potential stimulus announcements from the National People’s Congress in Beijing this week. A private survey showed China’s manufacturing PMI rose to 50.8 in February from 50.1 in January, beating expectations of 50.3 and hitting a three-month high. Domestically, attention turned to Australia’s upcoming fourth-quarter economic growth data due for release on Wednesday, with a moderate improvement expected.

On Thursday’s close, the Dow Jones Index (US30) decreased by 0.45%. The S&P 500 Index (US500) closed down 1.59%. The Nasdaq Technology Index (US100) fell by 2.75%. The broad market also came under pressure after President Trump announced that the proposed 25% tariffs on Canada and Mexico would take effect on March 4, while China will be hit with an additional 10% tariffs from the same date.

The US GDP for Q4 was unchanged at 2.3% (QoQ annualized). The core PCE Price Index for Q4 was revised upward to 2.7% from the previously reported 2.5%. US weekly initial jobless claims rose 22,000 to a 2.5-month high of 242,000, indicating a weaker labor market than expectations of 221,000. Markets rate the odds of a 25 bps rate cut at the next FOMC meeting on March 18-19 at 2%.

The digital assets’ selloff has deepened. Bitcoin continued its fall toward the $80,000 mark on Friday and is now about 25% below all-time highs. The fall followed a widespread sell-off in risk assets amid worries over Trump’s trade policies and growing concerns about the state of the US economy. In addition, continued uncertainty over the Trump administration’s policy regarding digital assets has pressured the market. The $1.5 billion hack of the ByBit exchange also highlighted the significant risks facing the industry.

Equity markets in Europe were mostly down on Thursday. Germany’s DAX (DE40) fell by 1.07%, France’s CAC 40 (FR40) closed down 0.51%, Spain’s IBEX 35 (ES35) lost 0.46%, and the UK’s FTSE 100 (UK100) closed positive 0.28%.

WTI crude oil prices fell below the $70 a barrel mark on Friday, reaching their biggest monthly decline since September, as US economic woes and broader market uncertainty weighed on the outlook for energy demand. Hopes for progress on a peace deal in Ukraine also pressured prices, as a settlement could lead to the lifting of Russian sanctions and increased oil exports.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.30%, China’s FTSE China A50 (CHA50) gained 0.81%, Hong Kong’s Hang Seng (HK50) fell by 0.29% and Australia’s ASX 200 (AU200) was positive 0.33%.

The offshore yuan maintained its fall around 7.29 per dollar, driven by US President Donald Trump’s announcement of an additional 10% tariff on Chinese imports. The tariffs will take effect on March 4, 2025, and are expected to put significant pressure on China’s export-driven economy, which remains heavily reliant on free trade. Meanwhile, investors are eagerly awaiting fiscal stimulus measures from China’s “Two Sessions” next week. The annual parliamentary meeting is expected to outline a policy agenda to revive economic growth, with a key focus on restoring domestic confidence, addressing economic pressures, and overcoming the developing trade war and technology rivalry with the US.

The Australian dollar slipped to $0.623 on Friday and was down more than 2% for the week as US President Donald Trump’s escalating tariffs heightened fears of a global trade war, weighing on export-oriented economies and their currencies. Australia’s economy, which relies heavily on exports to China, is particularly vulnerable to policies that could dampen Chinese demand.

In February, the Indonesian rupiah hit a five-year low of around 16,500 per US dollar amid a general weakening of Asian currencies. The US President Trump said his proposed tariffs on Mexico and Canada would take effect on March 4, while an additional 10% tariff on China would be imposed on the same day, which strengthened the US dollar. Also weighing on the rupiah was Indonesia’s persistent current account deficit, which remained negative for the 7th consecutive quarter at the end of 2024.

The Dow Jones Index (US30) gained 0.43% on Wednesday. The S&P 500 Index (US500) closed 0.01% higher. The Nasdaq Technology Index (US100) gained 0.22%. Nvidia shares hovered near zero despite the company reporting better-than-expected fourth-quarter sales and earnings and a strong outlook for the current quarter. The chipmaker increased revenue by 78% year-over-year, helped by strong demand for its GPUs in the artificial intelligence sector. Meanwhile, Salesforce plummeted more than 5% after disappointing quarterly results and a weak outlook.

The Canadian dollar weakened to 1.43 per US dollar, nearing a 22-year low of 1.455 hit on January 31, as renewed threats of tariffs from the US weighed on the demand outlook. The earlier risk of a trade imbalance has already prompted the Bank of Canada to announce a willingness to adjust policy to support domestic growth. In addition, falling crude oil prices, hovering at two-month lows, further weakened the outlook for the loonie, given Canada’s dependence on oil exports.

Equity markets in Europe were mostly up on Wednesday. Germany’s DAX (DE40) rose by 1.71%, France’s CAC 40 (FR40) closed 1.15% higher, Spain’s IBEX 35 (ES35) added 1.64%, and the UK’s FTSE 100 (UK100) closed positive 0.72%. On Wednesday, the DAX Index continued the rally that began after the German federal election over the weekend and outperformed its peers. Investors followed a wave of strong corporate earnings and remained optimistic about a potential mining deal between Ukraine and the US. Meanwhile, market participants continued to weigh the outlook for increased defense spending in Europe and lingering concerns over US trade tariffs.

WTI crude oil prices slipped below $69 a barrel on Thursday, to their lowest level since December last year, pressured by prospects for increased supply and a bearish demand outlook. A potential peace deal between Russia and Ukraine continued to weigh on prices as expectations of an easing of Russian sanctions could boost the global oil supply. The US and Ukraine also reached a draft agreement on minerals, a key step in President Trump’s efforts to end the war as soon as possible. In addition, oil prices have been hurt by concerns that Trump’s tariffs on China and other trading partners could slow economic growth and dampen demand.

The US natural gas prices (XNG/USD) fell below $4.0/MMBtu as prognoses of warmer weather and record production outweighed strong LNG exports and inventory shortages. Milder conditions are expected through March 12, reducing demand for natural gas to heat homes and businesses. In addition, February production remains at record levels, rising to 104.3 Bcf/d by February 25 from 100.5 Bcf/d on February 19.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) fell by 0.25%, China’s FTSE China A50 (CHA50) rose by 0.61%, Hong Kong’s Hang Seng (HK50) gained 3.27%, and Australia’s ASX 200 (AU200) was negative 0.14%.

The New Zealand dollar fell to US$0.567 on Thursday, hitting its lowest level in a week. The kiwi was weakened by the US dollar’s gains amid uncertainty over US trade policy following President Donald Trump’s vague promises of tariffs on Europe, as well as further postponements of planned duties on Canada and Mexico. Domestically, the currency remains under pressure after the Reserve Bank of New Zealand delivered a dovish monetary policy statement.