Archive for Economics & Fundamentals – Page 35

07 Apr

The sell-off in risk assets intensified as tariffs took effect

By JustMarkets 

The US economy added 228,000 jobs in March 2025, well above the downwardly revised 117,000 in February and above expectations of 135,000. This is the highest rate in the last three months. Despite the positive Non-Farm Payrolls report, all investors’ attention was focused on escalating trade tensions. At the end of Friday, the Dow Jones Index (US30) fell by 5.50% (-7.41% for the week). The S&P 500 Index (US500) was down 5.97% (-8.21% for the week). The Nasdaq Technology Index (US100) fell by 6.07% (-8.43% for the week). The decline in US markets intensified on Friday as China retaliated against President Donald Trump’s imposition of 10% import duties, adding to fears of a prolonged trade war. The S&P 500 Index fell nearly 9% for the week, the worst weekly drop since 2020, and global markets also fell hard. Trump’s tariffs, which will be expanded on April 9, are expected to reduce global trade, and some analysts have warned of recession risk. Over the weekend, President Trump continued to defend his tariff strategy, signaling on Truth Social that he is not worried about market turmoil. He argued that foreign investors are flocking to the US and insisted that his policies “will never change.”

Trump extended the deadline for ByteDance to sell its US operations to TikTok by 75 days, pushing it back to mid-June. The president said more time was needed to finalize approvals, but emphasized that national security issues remain. ByteDance has confirmed it is in talks with the US government, while Amazon.com Inc (AMZN), Oracle Corporation (ORCL), and Applovin Corp (APP) have expressed interest in acquiring the app’s US assets. Any updates on this front could add another layer of volatility to a market already plagued by geopolitical uncertainty.

The Canadian dollar (CAD) weakened to $1.42 amid signs of a fragile domestic economy and growing foreign trade uncertainty. Domestically, a loss of 32,600 jobs in March and a rise in unemployment to 6.7% indicate a weakening labor market, dampening the economic outlook. At the same time, crude oil prices — a key support for the commodity-linked Lonnie — fell more than 7%. With the Bank of Canada due to review its policy on April 16, expectations of a continued dovish stance amid recession fears intensified.

The Mexican peso (MXN) weakened to 20.5 per US dollar, nearing a three-year low of 20.85, which has been tested repeatedly since early 2025, as escalating global trade tensions and persistent domestic inflationary pressures reduce its appeal. At the same time, lingering uncertainty over Mexico’s potential exposure to US auto tariffs continues to cloud the outlook. Domestically, inflation remains uncomfortably high, complicating Banxico’s policy trajectory as it balances the need to maintain an attractive interest rate differential with the growing need to support slowing economic activity.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 4.95% (for the week -7.24%), France’s CAC 40 (FR 40) fell by 4.26% (for the week -7.32%), Spain’s IBEX 35 (ES35) lost 5.83% (for the week -6.08%), and the UK’s FTSE 100 (UK100) closed down 4.95% (for the week -6.97%). European stocks fell on Friday as investors recovered from new US tariffs and growing recession fears. Banks led the losses, plunged 8.5% after falling 5.5% on Thursday, amid concerns about slowing growth. EU officials said Friday that talks with the US were “frank” but warned that the bloc was “ready to defend interests” if necessary.

WTI crude prices fell 7.4% to $62 a barrel — the lowest level since August 2021 — after falling 6.6% the previous day amid growing concerns about a slowing global economy and weakening oil demand. Investor sentiment is increasingly weakened by an escalating trade war, especially with China’s impending imposition of 34% tariffs on US goods. Recession risks and uncertainty over global trade are adding to worries.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) was down 7.30% for the week, China’s FTSE China A50 (CHA50) lost 1.02%, Hong Kong’s Hang Seng (HK50) decreased by 3.48%, and Australia’s ASX 200 (AU200) was negative 3.94%. Shares in Hong Kong fell by 9.4% in early trading on Monday, marking a second session of sharp losses and hitting a two-month low. The collapse reflected widespread panic across all sectors as investors fled risky assets amid an escalating global trade war and rising recession fears.

Nominal wages in Japan rose by 3.1% year-on-year in February 2025, up from a downwardly revised 1.8% increase in January, in line with market expectations. While strong nominal wage growth has supported the BoJ’s recent move towards policy normalization, rising global uncertainty clouds the outlook for further interest rate hikes.

Vietnam’s annual inflation rate accelerated to 3.13% in March 2025 from February’s three-month low of 2.91%. The increase was driven by higher inflation in food and beverage services (3.83% vs. 3.31% in February).

S&P 500 (US500) 5,074.08 −322.44 (−5.97%)

Dow Jones (US30) 38,314.86 −2,231.07 (−5.50%)

DAX (DE40) 20,641.72 −1,075.67 (−4.95%)

FTSE 100 (UK100) 8,054.98 −419.76 (−4.95%)

USD Index 102.89 +0.82 (+0.80%)

News feed for: 2025.04.07

  • German Industrial Production (m/m) at 09:00 (GMT+3);
  • German Trade Balance (m/m) at 09:00 (GMT+3);
  • Eurozone Retail Sales (m/m) at 12:00 (GMT+3);
  •  Canada BOC Business Outlook Survey at 17:30 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
04 Apr

New modelling reveals full impact of Trump’s ‘Liberation Day’ tariffs – with the US hit hardest

By Niven Winchester, Auckland University of Technology 

We now have a clearer picture of Donald Trump’s “Liberation Day” tariffs and how they will affect other trading nations, including the United States itself.

The US administration claims these tariffs on imports will reduce the US trade deficit and address what it views as unfair and non-reciprocal trade practices. Trump said this would

forever be remembered as the day American industry was reborn, the day America’s destiny was reclaimed.

The “reciprocal” tariffs are designed to impose charges on other countries equivalent to half the costs they supposedly inflict on US exporters through tariffs, currency manipulation and non-tariff barriers levied on US goods.

Each nation received a tariff number that will apply to most goods. Notable sectors exempt include steel, aluminium and motor vehicles, which are already subject to new tariffs.

The minimum baseline tariff for each country is 10%. But many countries received higher numbers, including Vietnam (46%), Thailand (36%), China (34%), Indonesia (32%), Taiwan (32%) and Switzerland (31%).

The tariff number for China is in addition to an existing 20% tariff, so the total tariff applied to Chinese imports is 54%. Countries assigned 10% tariffs include Australia, New Zealand and the United Kingdom.

Canada and Mexico are exempt from the reciprocal tariffs, for now, but goods from those nations are subject to a 25% tariff under a separate executive order.

Although some countries do charge higher tariffs on US goods than the US imposes on their exports, and the “Liberation Day” tariffs are allegedly only half the full reciprocal rate, the calculations behind them are open to challenge.

For example, non-tariff measures are notoriously difficult to estimate and “subject to much uncertainty”, according to one recent study.

GDP impacts with retaliation

Other countries are now likely to respond with retaliatory tariffs on US imports. Canada (the largest destination for US exports), the EU and China have all said they will respond in kind.

To estimate the impacts of this tit-for-tat trade standoff, I use a global model of the production, trade and consumption of goods and services. Similar simulation tools – known as “computable general equilibrium models” – are widely used by governments, academics and consultancies to evaluate policy changes.

The first model simulates a scenario in which the US imposes reciprocal and other new tariffs, and other countries respond with equivalent tariffs on US goods. Estimated changes in GDP due to US reciprocal tariffs and retaliatory tariffs by other nations are shown in the table below.

The tariffs decrease US GDP by US$438.4 billion (1.45%). Divided among the nation’s 126 million households, GDP per household decreases by $3,487 per year. That is larger than the corresponding decreases in any other country. (All figures are in US dollars.)

Proportional GDP decreases are largest in Mexico (2.24%) and Canada (1.65%) as these nations ship more than 75% of their exports to the US. Mexican households are worse off by $1,192 per year and Canadian households by $2,467.

Other nations that experience relatively large decreases in GDP include Vietnam (0.99%) and Switzerland (0.32%).

Some nations gain from the trade war. Typically, these face relatively low US tariffs (and consequently also impose relatively low tariffs on US goods). New Zealand (0.29%) and Brazil (0.28%) experience the largest increases in GDP. New Zealand households are better off by $397 per year.

Aggregate GDP for the rest of the world (all nations except the US) decreases by $62 billion.

At the global level, GDP decreases by $500 billion (0.43%). This result confirms the well-known rule that trade wars shrink the global economy.

GDP impacts without retaliation

In the second scenario, the modelling depicts what happens if other nations do not react to the US tariffs. The changes in the GDP of selected countries are presented in the table below.

Countries that face relatively high US tariffs and ship a large proportion of their exports to the US experience the largest proportional decreases in GDP. These include Canada, Mexico, Vietnam, Thailand, Taiwan, Switzerland, South Korea and China.

Countries that face relatively low new tariffs gain, with the UK experiencing the largest GDP increase.

The tariffs decrease US GDP by $149 billion (0.49%) because the tariffs increase production costs and consumer prices in the US.

Aggregate GDP for the rest of the world decreases by $155 billion, more than twice the corresponding decrease when there was retaliation. This indicates that the rest of the world can reduce losses by retaliating. At the same time, retaliation leads to a worse outcome for the US.

Previous tariff announcements by the Trump administration dropped sand into the cogs of international trade. The reciprocal tariffs throw a spanner into the works. Ultimately, the US may face the largest damages.The Conversation

About the Author:

Niven Winchester, Professor of Economics, Auckland University of Technology

This article is republished from The Conversation under a Creative Commons license. Read the original article.

 

Economics & Fundamentals Opinions
04 Apr

Today, investors focus on the Non-Farm Payrolls labor market report

By JustMarkets

The Dow Jones Index (US30) fell by 3.98% on Thursday. The S&P 500 Index (US500) lost 4.84%. The Nasdaq Technology Index (US100) closed negative 5.97%. The US indices suffered their biggest one-day drop since 2020 after US President Donald Trump announced comprehensive trade tariffs, sparking fears of an all-out trade war that could lead to a global recession. On Wednesday, President Trump announced sweeping new tariffs, imposing a 10% levy on all imports and significantly raising rates for countries deemed “bad players.” China will face an additional 34% tariffs on top of the 20% duties already in place. For the European Union, Japan, and other countries, tariffs will range from 20% to 49%. The broad tariffs will go into effect on April 5, and the country-specific tariff increases will begin on April 9. Trump has justified the tariffs by citing unfair trade practices and currency manipulation, arguing that the measures will rejuvenate American industry and reduce the national debt.

Today, the US will release important data on the US labor market, namely the Non-Farm Payrolls report. Analysts expect that the number of new jobs (NFP) will amount to 139k (slowing down from 151k last month). The unemployment rate will remain at 4.1%, and average wage growth will be 4.1% y/y, the same as in February. If the data comes out in line with analysts’ expectations, then a slight weakening of the US dollar, moderate support for gold, and a neutral/positive stock market would be the most likely scenario. A dovish scenario will occur if NFP data shows a sharp decline, with unemployment rising. Such data will indicate a sharp cooling of the labor market, and the market will expect a more aggressive Fed rate cut. In such a scenario, the US dollar would weaken sharply, which would have a positive impact on risk assets such as the euro and British pound sterling, as well as on carry trade currencies — the Japanese yen and the Swiss franc.

The Mexican peso strengthened to 19.97 per US dollar, thanks to Mexico’s exemption from the broader reciprocal tariffs announced by US President Trump. The exemption gives Mexico a comparative advantage over major trading partners such as China, the EU, and Japan, which face high duties, reducing trade uncertainty and boosting investor confidence.

Equity markets in Europe mostly fell yesterday. Germany’s DAX (DE40) fell by 3.01%, France’s CAC 40 (FR40) closed down 3.31%, Spain’s IBEX 35 (ES35) Index lost 1.19%, and the UK’s FTSE 100 (UK100) closed down 1.55%. Frankfurt’s DAX Index lost 3% on Thursday, the biggest daily decline since July 2024, as sharp losses in European and global markets. The global sell-off was triggered by US President Donald Trump’s sweeping tariff policy. The new “reciprocal tariffs” include a 10% prime rate on all imports from the United States, a 20% tariff on goods from the European Union, and a 25 percent levy on imported cars. Most sectors saw significant falls, with sportswear giants Adidas and Puma leading the way, falling more than 11%. Banks, technology companies, and auto stocks also came under significant pressure.

The Swiss franc strengthened to 0.87 per US dollar, the highest level since early November 2024, as investors rushed into safe-haven assets in response to US President Donald Trump’s more aggressive-than-expected tariffs on major trading partners. As part of his “retaliatory tariffs” strategy, President Trump imposed a 31% tax on Swiss imports, with the US accounting for a significant 19% of Swiss exports. The new tariffs are likely to hurt economic growth and inflation in Switzerland, increasing the likelihood that the Swiss National Bank (SNB) will cut its discount rate to zero in June, compared to previous expectations of keeping it at 0.25%.

WTI crude oil prices fell to $66 a barrel on Friday, extending a more than 6% drop from the previous session, amid continued pressure from OPEC+ and concerns over global trade. Eight key OPEC+ producers agreed to raise output by 411,000 barrels a day next month, well above the expected 140,000 and faster than planned. The group called the increase “equivalent to three monthly increases.” It comes amid broader market turmoil caused by higher-than-expected US tariffs announced on Wednesday, which prompted retaliatory measures from major economies. While energy imports remain unaffected, fears of a global trade war could slow economic growth and reduce fuel demand.

Asian markets were also trading lower yesterday. Japan’s Nikkei 225 (JP225) fell by 2.77%, China’s FTSE China A50 (CHA50) decreased by 0.13%, Hong Kong’s Hang Seng (HK50) lost 1.52%, and Australia’s ASX 200 (AU200) was negative 0.94%.

S&P 500 (US500) 5,396.52 −274.45 (−4.84%)

Dow Jones (US30) 40,545.93 −1,679.39 (−3.98%)

DAX (DE40) 21,717.39 −673.45 (−3.01%)

FTSE 100 (UK100) 8,474.74 −133.74 (−1.55%)

USD Index 101.94 −1.87 (−1.80%)

News feed for: 2025.04.04

  • Switzerland Unemployment Rate (m/m) at 08:45 (GMT+3);
  • US Nonfarm Payrolls (m/m) at 15:30 (GMT+3);
  • US Unemployment Rate (m/m) at 15:30 (GMT+3);
  • Canada Unemployment Rate (m/m) at 15:30 (GMT+3);
  • US Fed Chair Powell Speaks at 18:25 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
02 Apr

Most of the tariffs imposed by the Trump administration take effect today

By JustMarkets

On Tuesday, the Dow Jones (US30) Index was down 0.03%. The S&P 500 Index (US500) was up 0.38%. The Nasdaq Technology Index (US100) added 0.82%. Uncertainty over President Trump’s upcoming tariffs and weak economic data have kept investors on edge. On Wednesday, the White House will announce retaliatory tariffs and other fees. The possibility of 20% tariffs on most US imports has raised concerns, and analysts warn that the market may underestimate trade risks.

Despite ongoing trade uncertainty, the Mexican peso (MXN) is showing resilience, supported by easing US recession fears and President Sheinbaum’s success in securing a softer tariff stance from Washington. While the recent 50bps rate cut by the Bank of Mexico and signals of further easing could put pressure on the currency, stable local macroeconomic indicators such as business confidence holding above contractionary levels and stable gross fixed investment are keeping downside risks in check.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 1.70%, France’s CAC 40 (FR40) closed 1.10% higher, Spain’s IBEX 35 (ES35) gained 1.23%, and the UK’s FTSE 100 (UK100) closed positive 0.61%. Eurozone inflation eased to 2.2% y/y, which may support expectations of an ECB rate cut, though risks from trade tensions remain.

Silver prices (XAG/USD) fell to $33.8 an ounce, retreating from a five-month high of $34.58 reached on March 28, as investors awaited President Donald Trump’s announcement of retaliatory tariffs to take effect on Wednesday. Market participants weighed fears of an escalating global trade war that could dampen industrial demand for silver against its appeal as a safe-haven source amid growing concerns about slowing economic growth.

WTI crude oil prices fell to around $71.2 a barrel on Tuesday amid concerns that President Donald Trump’s widening trade war will dampen energy demand. Trump has said the retaliatory tariffs he will announce on Wednesday will apply to all countries, not just those with the biggest trade imbalance with the US. However, potential supply risks could cushion oil’s fall after Trump’s latest threats against Russia and Iran.

Asian markets were predominantly up yesterday. Japan’s Nikkei 225 (JP225) was up 0.02%, China’s FTSE China A50 (CHA50) decreased by 0.27%, Hong Kong’s Hang Seng (HK50) was up 0.38%, and Australia’s ASX 200 (AU200) was positive 1.04%. Analysts at Goldman Sachs warned that manufacturing activity in China could come under pressure in the coming months due to additional trade barriers.

The New Zealand Dollar rose to USD 0.572 on Wednesday, posting gains for the second consecutive session despite the upcoming US announcement of retaliatory tariffs today. While New Zealand’s direct trade with the US is minimal, its economy remains highly sensitive to fluctuations in global trade due to its heavy reliance on exports. Domestically, expectations of further policy easing by the Reserve Bank of New Zealand remain, with markets expecting at least two rate cuts before the end of the year.

S&P 500 (US500) 5,633.07 +21.22 (+0.38%)

Dow Jones (US30) 41,989.96 −11.80 (−0.03%)

DAX (DE40) 22,539.98 +376.49 (+1.70%)

FTSE 100 (UK100) 8,634.80 +51.99 (+0.61%)

USD Index 104.22 +0.01 (+0.01%)

News feed for: 2025.04.02

  • US ADP Nonfarm Employment Change (m/m) at 15:15 (GMT+3);
  • US Crude Oil Reserves (w/w) at 17:30 (GMT+3).

 

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
02 Apr

“Liberation Day”: How markets might react to Trump’s April 2nd tariff announcement?

By ForexTime 

  • Trump set to announce “reciprocal” tariffs on Wednesday, April 2nd.
  • Markets fear worst-case scenario: average US tariff hiked to 35%
  • Higher tariffs may lead to US stagflation: revived inflation, slower economic growth
  • Tariff shocker could see US dollar and stock indexes fall, gold soars
  • Less-than-feared tariffs could see US dollar and stocks rebound

 

This Wednesday, US President Donald Trump is set to upend global trade with “reciprocal” tariffs.

Here we break down what traders and investors need to know ahead of such a pivotal announcement.

 

When will Trump announce “reciprocal” tariffs?

President Trump is set to announce his next batch of tariffs on Wednesday, April 2nd at 4:00 PM EST / 8:00PM GMT.

POTUS has even labelled April 2nd as “Liberation Day” in a social media post on March 20th:

liberation Day Trump's Truth Social post

 

 

What do “reciprocal” tariffs mean?

As the word suggests, the US is likely looking to charge its trade partners the same tariffs as they charge the US.

This suggests “an eye for an eye” type of approach.

However, it may not be that straightforward.

When deciding the revised % tax rate to “reciprocate” with, the US administration may also incorporate the cost of non-tariff barriers, such as:

– regulations

– other taxes such as VAT charged domestically in other countries

– even currency exchange (forex/FX rates)

In other words, it’s hard to predict what the final % number will be, prior to the April 2nd announcement.

 

 

Wait, hasn’t Trump already announced tariffs this year?

Yes.

Since his second inauguration on January 20th, 2025, President Trump has imposed:

– 20% tax on all Chinese goods (10% in February, doubled in March)

– 25% tax on most imports from Canada and Mexico (delayed until April)

– 25% tax on steel and aluminum (imposed on March 12th)

– 25% tax on auto imports (starting on April 3rd with fully assembled imported vehicles; scope of taxable goods to be expanded in early May)

But the April 2nd announcement is the next “big one”, with potentially larger and broader tariffs to be announced.

Hence, the palpable tensions leading up to this mid-week announcement.

Markets have been especially volatile in recent weeks, with traders and investors guessing what Trump’s next tariff salvo would actually entail.

Even the S&P 500 dipped into a “technical correction”, TWICE, in March 2025!

 

Why is Trump doing this?

As a overall goal, Trump is looking to “fix” the trade imbalances between the US and its trading partners.

With these tariffs, Trump intends to:

– revive manufacturing jobs in the US

– raising revenue for the government

– align the policies of foreign governments with his administration’s goals

 

 

Who might be targeted?

In short, it’s not yet clear.

We know that President Trump has often targeted major trading partners, including China, the EU, Canada and Mexico.

However, recent weeks have seen various government officials, including Trump himself, use varying terms to describe which countries are set to be on the receiving end of these “reciprocal tariffs”.

These include phrases like “all countries”, to “country-specific”, to “15% of all countries”, and even “dirty 15”.

Just for context, it’s estimated that 15 countries accounted for over 75% of all US imports in 2024.

This “dirty 15” list may include:

– China

– Mexico

– Vietnam

– Ireland

– Germany

– Taiwan

– Japan

– South Korea

– Canada

– India

– Thailand

– Italy

– Switzerland

– Malaysia

– Indonesia

 

 

What’s the worst-case scenario?

As a catch-all headline number …

Bloomberg economists predict that the “maximum” damage could raise the average US tariff to 35%!

That would be 28 percentage points higher from the mid-single digit average at present (as of March 2025, after taking into account the already-imposed tariffs so far in Trump’s second term as POTUS).

For reference, when President Trump kicked off his second term, the average US tariff rate was around 2.5%.

 

 

Why are markets concerned?

Overall, Trump’s next tariff salvo may well be the most protectionist move by the US government in about a century (since the Smoot-Hawley Tariff Act of 1930)!

Higher US tariffs could actually reignite US inflation, while slowing down its economic growth.

According to a model by the Federal Reserve, US GDP could be negatively impacted by 4%, while lifting inflation by 2.5% over the next 2-3 years.

This points to a “stagflation”!

Furthermore, a slowdown in the world’s largest economy is bound to weigh down the global economy in tandem.

 

 

But wait, there could be more tariffs ahead!

White House Press Secretary Karoline Leavitt said on March 31st that President Trump may look to also impose sector-specific duties further down the line.

These could impact imports of:

– copper

– pharmaceuticals

– semiconductors

– lumber

However, these sectoral duties are apparently not the main focus on April 2nd.

 

 

How might markets react to the April 2nd announcement?

  • If Trump confirms the market’s “worst case” scenario, we could see:

– US assets FALLING (e.g. US500, US30, NAS100, US dollar etc.)
This would be based on the notion that US economic growth will be impacted negatively from these hiked tariffs.

– Safe havens SOAR (e.g. gold, Japanese Yen, Swiss Franc) and even potential gains for some non-USD currencies (such as the British Pound, with the UK seemingly not front-and-center in Trump’s tariff cross-hairs)

 

  • However, if President Trump’s “reciprocal” tariffs package prove to be not-as-bad-as-feared, that could see:

– US assets REBOUND (e.g. US500, US30, NAS100, US dollar etc.)
This would be based on the notion that the tariffs’ impact on US economic growth would be less severe.

– Safe havens DIP (e.g. gold, Japanese Yen, Swiss Franc) and even potential declines for some non-USD currencies (such as the British Pound) which have climbed as money flowed away from the US dollar in recent weeks.

 

 

Although uncertainty is running high leading up to the announcement, one thing is for sure …

Wednesday, April 2nd 2025 is set to be a big day for governments, businesses, investors, and traders around the world

Forex-Time-LogoArticle by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com

Economics & Fundamentals Financial News
01 Apr

The RBA expectedly kept interest rates unchanged. Oil rose to a one-month high

By JustMarkets

On Monday, the Dow Jones (US30) rose by 1.00%. The S&P 500 Index (US500) gained 1.55%. The Nasdaq Technology Index (US100) was down 0.02%. Investors remain on edge, facing growing concerns about economic growth amid escalating trade tensions. Uncertainty over trade policy impacted sentiment after Trump announced broader tariffs than previously expected, including a 25% tax on all non-US manufactured vehicles that will take effect on April 2. The market anxiety caused traders to turn their attention to defensive assets.

The Canadian dollar weakened to 1.44 per US dollar, retreating from a one-month high of 1.426 reached on March 26, amid rising trade tensions and the looming threat of US tariffs. This aggressive US stance risks undermining Canada’s trade surplus as it potentially negates the benefits of the 2018 trade agreement. In anticipation of further complications, including possible retaliatory measures from the Canadian government, and amid weak GDP data and narrowing yield differentials driven by expectations of a looser Bank of Canada policy, market participants recalibrated risk in an environment where the trade conflict shows no signs of immediate de-escalation.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 1.33%, France’s CAC 40 (FR40) closed down 1.58%, Spain’s IBEX 35 (ES35) lost 1.31%, and the UK’s FTSE 100 (UK100) closed down 0.88%. Uncertainty over the scale and scope of tariffs contributed to the negative sentiment. Meanwhile, a preliminary estimate of German consumer price inflation fell to 2.2% in March 2025, the lowest since November 2024, in line with market expectations. On the corporate front, stocks of automakers, banks, and technology companies saw the biggest declines.

WTI crude oil prices rose to around $71.6 a barrel on Tuesday, extending gains for the second straight session and near the highest level in more than a month, amid concerns over possible supply disruptions following US President Donald Trump’s latest threats against Russia and Iran. Trump has vowed to impose secondary tariffs of 25-50% on buyers of Russian oil if he believes Moscow is hindering his efforts to end the war in Ukraine by putting pressure on key importers such as India and China. He also threatened Iran with secondary tariffs and bombing until it signs an agreement to give up nuclear weapons.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) sharply fell by 4.05%, China’s FTSE China A50 (CHA50) was down 0.56%, Hong Kong’s Hang Seng (HK50) decreased by 1.31% and Australia’s ASX 200 (AU200) was negative 1.74%.

The Reserve Bank of Australia (RBA) kept the monetary rate unchanged at 4.1% at its April meeting, leaving borrowing costs unchanged after a 25 basis point cut at its February meeting, in line with market expectations. The board noted that monetary policy is well-placed to respond to international developments should they have a material impact on Australian activity and inflation.

China’s Caixin manufacturing PMI rose to 51.2 in March 2025 from February’s 50.8 and beat expectations of 51.1, the highest reading since last November, with output growth accelerating thanks to a steady increase in new orders amid improving demand conditions.

The Bank of Japan Tankan Index, which measures sentiment among large manufacturers, fell to 12 points in the first quarter of 2025 from 14 in the previous quarter, the lowest in a year, as concerns over US tariffs dampened sentiment. The decline adds uncertainty to the outlook for future interest rate hikes by the Bank of Japan, which could affect the timing of further policy adjustments.

S&P 500 (US500) 5,611.85 +30.91 (+0.55%)

Dow Jones (US30) 42,001.76 +417.86 (+1.00%)

DAX (DE40) 22,163.49 −298.03 (−1.33%)

FTSE 100 (UK100) 8,582.81 −76.04 (−0.88%)

USD Index 104.17 +0.13 (+0.12%)

News feed for: 2025.04.01

  • Japan Unemployment Rate (m/m) at 02:30 (GMT+3);
  • Japan Tankan Large Manufacturers Index (q/q) at 02:50 (GMT+3);
  • Japan Tankan Large Non-Manufacturers Index (q/q) at 02:50 (GMT+3);
  • Japan Manufacturing PMI (m/m) at 03:30 (GMT+3);
  • Australia RBA Interest Rate Decision (m/m) at 06:30 (GMT+3);
  • Australia RBA Monetary Policy Statement (m/m) at 06:30 (GMT+3);
  • Switzerland Retail Sales (m/m) at 09:30 (GMT+3)
  •  Switzerland Manufacturing PMI (m/m) at 10:30 (GMT+3);
  • German Manufacturing PMI (m/m) at 10:55 (GMT+3);
  • Eurozone Manufacturing PMI (m/m) at 11:00 (GMT+3);
  • UK Manufacturing PMI (m/m) at 11:30 (GMT+3);
  • Eurozone Consumer Price Index (m/m) at 12:00 (GMT+3);
  • Eurozone Unemployment Rate (m/m) at 12:00 (GMT+3);
  • Eurozone ECB President Lagarde Speaks at 15:30 (GMT+3);
  • Canada Manufacturing PMI (m/m) at 16:30 (GMT+3);
  • US ISM Manufacturing PMI (m/m) at 17:00 (GMT+3);

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
31 Mar

World stock indices sell off under the weight of new tariffs

By JustMarkets 

At the end of Friday, the Dow Jones Index (US30) fell by 1.69% (for the week -1.41%). The S&P 500 Index (US500) decreased by 1.97% (for the week -2.40%). The Nasdaq Technology Index (US100) was down 2.61% (for the week -3.79%). Stocks in the US fell sharply on Friday amid growing concerns about inflation and trade policy uncertainty. Technology giants led the decline, with Alphabet, Amazon, and Meta down more than 4% each and Microsoft down 3%. Worries about inflation intensified after the University of Michigan’s final consumer sentiment data for March showed the highest long-term inflation expectations since 1993. Meanwhile, the Core PCE Price Index, the Fed’s preferred measure of inflation, rose by 2.8% in February, exceeding expectations, and consumer spending rose by 0.4%. Investors expected further trade shocks as Trump’s 25% tariff on automobiles takes effect this week, raising fears of retaliation from key trading partners.

Bank of America expects a challenging reporting season, projecting a 1% decline in first-quarter revenue, down three percentage points from the previous quarter and 3% below consensus estimates.

The Canadian dollar weakened to 1.43 per US dollar amid rising trade tensions and weak GDP data weighing on the Loonie. Concerns stem from the prospect of additional US tariffs on Canadian auto parts and related exports. Measures could extend to key sectors such as auto components, raw materials, and lumber. Adding to this uncertainty, Prime Minister Mark Carney has warned that Canada is prepared to take retaliatory trade measures, adding to the trade conflict. Meanwhile, uncertainty over Bank of Canada policy — amid preliminary data on likely stagnant GDP growth in February — has led to expectations of looser monetary policy compared to the US Federal Reserve, further narrowing the yield differential.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.96% (for the week -2.66%), France’s CAC 40 (FR40) closed down 0.93% (for the week -2.33%), Spain’s IBEX 35 (ES35) lost 0.84% (for the week -0.89%), and the UK’s FTSE 100 (UK100) closed negative 0.08% (for the week +0.14%). European equities closed lower on Friday, continuing to be impacted by concerns over global economic growth following US President Donald Trump’s tariff announcement and less-than-encouraging US economic data, including PCE Core Price Index data. Inflation data in Spain and France showed weaker-than-expected results, with French inflation holding steady at 0.9% and Spanish inflation falling to 2.2%.

WTI crude oil prices fell by 0.8% on Friday to hit $69.4 per barrel, on concerns that ongoing trade tensions, especially between the US and key trading partners, could trigger a global recession. Despite this, oil prices recorded their third consecutive weekly gain, helped by US sanctions against Venezuela and Iran. The US crude stockpile data showed a 3.3 million barrel decline, indicating continued strong demand. The OPEC+ group, led by Saudi Arabia and Russia, will begin a gradual increase in production in April, and reports suggest the group is likely to continue raising output in May.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) was down 1.91%, China’s FTSE China A50 (CHA50) fell by 0.32%, Hong Kong’s Hang Seng (HK50) lost 1.36%, and Australia’s ASX 200 (AU200) was positive 0.16%. The Nikkei 225 Index (JP225) fell nearly 4% on Monday to its lowest level in six months, as investors reacted to weakness on Wall Street and prepared for new US tariffs that will take effect this week. President Donald Trump is set to impose 25% tariffs on imported cars, a major blow to Japan’s key auto export sector, and outlined plans for retaliatory trade duties. Domestically, investors digested mixed economic data, with industrial production in February beating expectations and retail sales falling short of projections. All sectors declined, with sharp losses in the technology, consumer discretionary, and industrial sectors.

South Korea, China, and Japan held their first economic dialogue in five years on Sunday, seeking to promote regional trade as the three Asian export powers suffer from tariffs imposed by US President Donald Trump. The dialogue aims to strengthen the implementation of the RCEP, in which all three countries are participating, and create a framework for enhanced trade cooperation among the three countries.

S&P 500 (US500) 5,580.94 −112.37 (−1.97%)

Dow Jones (US30) 41,583.90 −715.80 (−1.69%)

DAX (DE40) 22,461.52 −217.22 (−0.96%)

FTSE 100 (UK100) 8,658.85 −7.27 (−0.08%)

USD Index 104.01 −0.32 (−0.31%)

News feed for: 2025.03.31

  • Japan Industrial Production (m/m) at 02:50 (GMT+3);
  • Japan Retail Sales (m/m) at 02:50 (GMT+3);
  • China Manufacturing PMI (m/m) at 04:30 (GMT+3);
  • China Non-Manufacturing PMI (m/m) at 04:30 (GMT+3);
  • German Retail Sales (m/m) at 09:00 (GMT+3);
  • German Consumer Price Index (m/m) at 15:00 (GMT+3);
  • US Chicago PMI (m/m) at 16:45 (GMT+3).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
28 Mar

Banxico cut the rate by 0.5%. The global auto market is under pressure from the introduction of tariffs.

By JustMarkets

At the end of Thursday, the Dow Jones Industrial Average (US30) was down 0.37%. The S&P500 Index (US500) was down 0.33%. The Nasdaq Technology Index (US100) was down 0.53%. Trump’s decision to impose 25% tariffs on imported cars, effective in April, has heightened fears of escalating trade tensions, especially with key trading partners such as the EU and Canada. Shares of automakers suffered, with General Motors down 7.3% and Ford down 3.9%, while Tesla rose 0.4%, benefiting from domestic production. Investors were also receptive to fresh economic data, with fourth-quarter GDP growth revised up slightly to 2.4% from 2.3%. Initial jobless claims matched expectations, but the trade deficit increased than expected, adding to market uncertainty.

Mexico’s central bank, Banxico, cut its key rate by 0.5% to 9.00% amid further declines in inflation and signs of continued economic weakness earlier this year. The release said several board representatives forecast a similar 50 bps rate cut at the May 9 meeting if disinflation persists, indicating a possible continuation of the easing cycle.

Equity markets in Europe were mostly down on Thursday. Germany’s DAX (DE40) fell by 0.70%, France’s CAC 40 (FR40) closed down 0.51%, Spain’s IBEX 35 (ES35) lost 0.07%, and the UK’s FTSE 100 (UK100) closed 0.27% yesterday. Frankfurt’s DAX index closed Thursday below 22.664, its lowest level since mid-March, and underperformed its peers as traders reacted to President Trump’s announcement to impose 25% tariffs on imports of all cars. Shares of auto companies led the decline, with Mercedes-Benz AG, Porsche AG, and BMW all down 2.6% and Volkswagen down 1.5%. European Commission President Ursula von der Leyen expressed disappointment but emphasized that the EU is committed to finding a diplomatic solution and protecting its economy.

Norway’s central bank, Norges Bank, kept its key rate at 4.5% for the tenth consecutive meeting. Policymakers noted that inflation has risen sharply and remains much higher than expected. They warned that cutting the discount rate too quickly could increase prices. Norway’s annual inflation accelerated to 3.6% in February 2025 from 2.3% in January, the highest since April 2024. Despite this, officials noted that their current forecast suggests a rate cut is likely later in 2025.

WTI crude prices rose to $69.90 a barrel on Thursday, extending gains of about 1% from the previous day, as traders priced in tightening oil supplies amid concerns about the impact of new US tariffs on the global economy. Market participants were focused on the risks associated with escalating trade tensions, especially after US President Donald Trump unveiled plans to impose 25% tariffs on imported cars and light trucks, with tariffs on auto parts set to take effect in May. In addition, the market was further supported by data showing a significant decline in US crude oil inventories by 3.3 million barrels last week.

US natural gas (XNG/USD) prices remain below $3.9 per bbl, near a four-week low, as record production and mild weather weigh on prices. Forecasts point to above-normal temperatures in the lower 48 states through April 9, which will likely reduce heating demand and contribute to higher inventories. Analysts forecast that March could see the first net increase in inventories since 2012.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) fell by 0.60%, China’s FTSE China A50 (CHA50) added 0.58%, Hong Kong’s Hang Seng (HK50) rose by 0.41%, and Australia’s ASX 200 (AU200) was negative 0.38%.

On Friday, the Australian dollar slipped below $0.63, reversing the previous session’s gains as new US tariffs come into effect next week, adding to global trade tensions. Markets also focused on next week’s Reserve Bank of Australia decision, where the central bank is expected to keep interest rates unchanged at 4.1%. Current expectations indicate that rates will not be cut until at least July. Meanwhile, the prime minister announced a national election on May 3, kicking off a five-week campaign centered on tax cuts and reduced living expenses.

S&P 500 (US500) 5,693.31 −18.89 (−0.33%)

Dow Jones (US30) 42,299.70 −155.09 (−0.37%)

DAX (DE40) 22,678.74 −160.29 (−0.70%)

FTSE 100 (UK100) 8,666.12 −23.47 (−0.27%)

USD index 104.28 −0.27 (−0.26%)

News feed for: 2025.03.28

  •  Japan Tokyo Core CPI (m/m) at 01:30 (GMT+2);
  • Germany GfK Consumer Confidence (m/m) at 09:00 (GMT+2);
  • UK Retail Sales (m/m) at 09:00 (GMT+2);
  • UK GDP (q/q) at 09:00 (GMT+2);
  • Switzerland KOF Leading Indicators (m/m) at 10:00 (GMT+2);
  • Germany Unemployment Rate (m/m) at 10:55 (GMT+2);
  • Canada GDP (m/m) at 14:30 (GMT+2);
  • US Core PCE Price Index (m/m) at 14:30 (GMT+2);
  • US Michigan Consumer Sentiment (m/m) at 16:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
27 Mar

Uncertainty over the scope and impact of tariffs increased market volatility

By JustMarkets

The Dow Jones index (US30) was down 0.31% at Wednesday’s close. The S&P500 Index (US500) decreased by 1.12%. The Nasdaq Technology Index (US100) was down 2.04%. The US stocks fell sharply on Wednesday as technology shares led a broad sell-off amid growing concerns over looming US tariffs. Shares of Nvidia and Tesla fell more than -5.5%, while major tech companies such as Meta, Amazon, and Alphabet were down more than 2%. Shares of automakers also weakened after reports that President Trump will impose new 25% tariffs on auto imports. Uncertainty over the scope and impact of these tariffs has added to market volatility, raising fears of retaliation and broader economic repercussions.

The Canadian dollar strengthened to 1.43 per US dollar, hitting a one-month high, as investors welcomed reports that not all the trade tariffs scheduled for April 2 will take effect, with some countries likely to receive exemptions. Reports that President Trump may impose a three-tiered tariff system with selective exemptions indicate that Canada could face the lowest level of upcoming tariffs, which would spare its exports and ease external pressure on the loonie. This optimism is supported by favorable oil price developments – rising crude oil prices amid supply concerns boosts the currency, given Canada’s status as a major oil exporter.

Equity markets in Europe were mostly down on Wednesday. Germany’s DAX (DE40) fell by 1.17%, France’s CAC 40 (FR 40) closed down 0.96%, Spain’s IBEX 35 (ES35) dropped 0.39%, and the UK’s FTSE 100 (UK100) closed 0.30% yesterday. The spring statement from the Chancellor of the United Kingdom, Rachel Reeves, did not bring optimism to investors. Many key announcements, such as changes to social security and the NHS, were already well-known and had minimal impact on the market. The biggest disappointment was the OBR’s revised growth forecast for the UK economy, which was cut from 2% to just 1% for 2024. This dampened sentiment, especially in the housing sector, where shares of major housebuilders turned negative

WTI crude oil prices rose to $69.9 a barrel on Wednesday, the highest in nearly four weeks, driven by concerns about tightening global supply. The US has threatened to impose 25% tariffs on countries buying Venezuelan oil, disrupting trade flows, especially to China, Venezuela’s biggest buyer. This follows recent US sanctions aimed at Iranian oil sales, although Saudi Arabia may increase production to offset the loss of Iranian exports. In addition, US crude inventories fell by 3.34 million barrels last week, more than double the expected decline, indicating strong demand.

Asian markets traded mostly up yesterday. Japan’s Nikkei 225 (JP225) rose by 0.65%, China’s FTSE China A50 (CHA50) added 0.44%, Hong Kong’s Hang Seng (HK50) gained 0.60%, and Australia’s ASX 200 (AU200) was positive 0.71%. Hong Kong stocks were up 1.4% in Thursday morning trading, strengthening for a second day amid broad-based gains. Sentiment strengthened after Wall Street banks turned bullish on Chinese equities. Morgan Stanley raised its 2025 target for mainland Chinese equities for the second time this year, while Goldman Sachs forecast further gains thanks to positive earnings revisions.

China significantly increased debt issuance in the first quarter of 2025 to boost growth and stabilize the bond market. The Ministry of Finance raised 1.45 trillion yuan through sovereign bonds, three times more than last year and a record. The surge indicates Beijing seeks to boost fiscal spending amid real estate concerns, deflation, and ongoing trade tensions.

S&P Global Ratings recently predicted that New Zealand and other regional economies will be less affected by US trade measures, which has provided some support for the Kiwi dollar. Domestically, however, expectations of further monetary easing by the Reserve Bank of New Zealand continue to weigh on the currency. Economists believe the RBNZ remains poised for additional rate cuts in April and May despite last week’s unexpectedly positive GDP data.

S&P 500 (US500) 5,712.20 −64.45 (−1.12%)

Dow Jones (US30) 42,454.79 −132.71 (−0.31%)

DAX (DE40) 22,839.03 −270.76 (−1.17%)

FTSE 100 (UK100) 8,689.59 +25.79 (+0.30%)

USD index 104.67 +0.48 (+0.46%)

News feed for: 2025.03.27

  • Australia Retail Sales (m/m) at 02:30 (GMT+2);
  • Norway Norges Bank Interest Rate Decision at 11:00 (GMT+2);
  • US GDP (q/q) at 14:30 (GMT+2);
  • US Initial Jobless Claims (w/w) at 14:30 (GMT+2);
  • US Pending Home Sales (m/m) at 16:00 (GMT+2);
  • US Natural Gas Storage (w/w) at 16:30 (GMT+2);
  • Mexico Interest Rate Decision (m/m) at 21:00 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
26 Mar

Australia’s inflation rate is at a 3-month low. Oil prices are approaching $70 again

By JustMarkets

At the end of Tuesday, the Dow Jones Index (US30) rose by 0.01%, the S&P500 Index (US500) gained 0.16%, and the Nasdaq Technology Index (US100) was up 0.46%. Stocks extended gains on hopes that the US’s upcoming retaliatory tariffs next week will be narrower than originally planned.

Options traders scaled back expectations for US rate cuts this year. With tariffs expected to weigh on economic growth — and force the Fed to step in to support the economy — any easing of tariffs should ease pressure on the Fed to cut rates over the next year.

Equity markets in Europe were mostly up on Tuesday. Germany’s DAX (DE40) rose by 0.13%, France’s CAC 40 (FR40) closed 1.08% higher, Spain’s IBEX 35 (ES35) added 1.21%, and the UK’s FTSE 100 (UK100) closed 0.30% yesterday. The latest Confederation of British Industry Distributive Trades survey showed that UK retail sales fell in March, marking the sixth consecutive decline. Ukraine and Russia agreed on a ceasefire in the Black Sea after separate talks with US officials in Saudi Arabia.

WTI crude prices rose above $69 a barrel on Wednesday amid supply concerns and a sharper-than-expected decline in the US crude inventories. On Monday, Trump signed an executive order imposing 25% tariffs on imports from countries that buy Venezuelan crude, which could disrupt supplies to key refineries, especially in China, India, and Spain. The Trump administration also extended the deadline for Chevron’s exit from Venezuela to May 27. Analysts estimate that the company’s exit could reduce production by 200,000 bpd. Meanwhile, API data showed that US crude inventories fell by 4.6 million barrels last week, beating market expectations for a 2.5 million barrel decline.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.46%, China’s FTSE China A50 (CHA50) jumped 0.61%, Hong Kong’s Hang Seng (HK50) fell by 2.35%, and Australia’s ASX 200 (AU200) was positive 0.07%.

Australia’s Consumer Price Index fell to a three-month low of 2.4% in February, defying expectations of no change from January’s 2.5% reading. Meanwhile, the Australian government announced two additional personal income tax cuts, scheduled for 2026 and 2027, totaling A$17.1 billion above forecast. On the monetary policy front, the Reserve Bank of Australia will meet next week, where interest rates are expected to remain unchanged.

Japan’s Index of Economic Indicators, which tracks output, employment, and retail sales, came in at 116.1 in January 2025, slightly below the initial forecast of 116.2 but up from a marginally revised 106.0 in the previous month. The figure was the highest since September 2019, helped by a moderate economic recovery amid improving employment and income and broader growth in private consumption.

S&P 500 (US500) 5,776.65 +9.08 (0.16%)

Dow Jones (US30) 42,587.50 +4.18 (+0.01%)

DAX (DE40) 23,109.79 +257.13 (+1.13%)

FTSE 100 (UK100) 8,663.80 +25.79 (+0.30%)

USD index 104.21 -0.05 (-0.05%)

News feed for: 2025.03.26

  • Australia Consumer Price Index (m/m) at 02:30 (GMT+2);
  • UK Consumer Price Index (m/m) at 09:00 (GMT+2);
  • UK Annual Budget Release at 12:00 (GMT+2);
  • US Durable Goods Orders (m/m) at 14:30 (GMT+2);
  • US Crude Oil Reserves (w/w) at 16:30 (GMT+2).

By JustMarkets

 

This article reflects a personal opinion and should not be interpreted as an investment advice, and/or offer, and/or a persistent request for carrying out financial transactions, and/or a guarantee, and/or a forecast of future events.

Economics & Fundamentals Financial News
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