InvestMacro

On Friday, the Dow Jones (US30) rose by 0.08% (week-to-date +1.27%). The S&P 500 Index (US500) gained 0.08% (week-to-date +0.57%). The Nasdaq Technology Index (US100) gained 0.39% (week-to-date +0.42%). The major US indices bounced off their lows in the afternoon session after President Trump showed some “flexibility” on tariffs. While President Trump mentioned “flexibility,” he emphasized that tariffs imposed before April 2 would be reciprocal, and countries imposing tariffs against the US would face similar charges in return. Among individual stocks, FedEx (FDX) fell more than 10% after cutting its full-year expectation, citing “continued weakness and uncertainty” in the economy. Nike (NKE) shares fell nearly 9% after warning of lower sales for the quarter. Meanwhile, Boeing shares are up more than 4% after winning a contract to design and build a next-generation fighter jet for the US military.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) was down 0.47% (week-to-date -0.46%), France’s CAC 40 (FR40) closed down 0.63% (week-to-date +0.11%), Spain’s IBEX 35 (ES35) added 0.33% (week-to-date +2.62%), and the UK’s FTSE 100 (UK100) closed down 0.63% (week-to-date +0.17%). European equity markets opened lower on Friday, extending losses from the previous session, as global economic and trade uncertainty continued to weigh on sentiment. German lawmakers approved a government borrowing reform aimed at boosting defense spending. Deutsche Bank economists then revised their projections, predicting German GDP growth of 1.5% in 2026 and 2.0% in 2027.

WTI crude oil prices added 0.3% on Friday to reach $68.3 per barrel for a second consecutive weekly gain of 1.64%, helped by new US sanctions against Iran and a new OPEC+ plan to cut production among the organization’s seven members. The US Treasury Department imposed new sanctions against Chinese refineries and ships involved in importing Iranian oil, intensifying Washington’s “maximum pressure” campaign to reduce Iran’s oil exports to zero. Analysts expect Iranian exports to fall by 1 million barrels a day due to the tightened sanctions.

Silver (XNG/USD) fell more than 1% to $33 an ounce on Friday, hitting a one-week low amid a rising US dollar. The dollar’s strength came after Federal Reserve Chairman Jerome Powell reiterated that the Central Bank is in no hurry to cut interest rates further, despite announcing two possible rate cuts this year. Powell pointed to weakening economic growth and labor market concerns but maintained a cautious stance due to uncertainty over US President Donald Trump’s tariff policy and its impact on inflation. Additional pressure on silver came from continued economic concerns in China, which lowered the outlook for industrial demand as Beijing announced new stimulus measures without providing specific details.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) was down 0.20%, China’s FTSE China A50 (CHA50) lost 2.10%, Hong Kong’s Hang Seng (HK50) decreased by 2.21%, and Australia’s ASX 200 (AU200) was positive +1.78%.

Singapore’s annualized inflation rate eased to 0.9% in February 2025 from 1.2% in the previous month, slightly below market expectations of 0.95%. On a monthly basis, consumer prices rose to 0.8% in February 2025, recovering from a 0.7% drop in the previous month. Meanwhile, the annualized core inflation rate fell to 0.6% from 0.8% in January 2025, the lowest since June 2021.

The New Zealand dollar hit a one-week low on Monday as concerns over the looming April 2 deadline for retaliatory US tariffs put pressure on the export-dependent currency. However, President Trump has said the tariff plans could be “flexible” and recent reports suggest their scope may be narrower than expected, which could exempt some industries from the full impact.

On Thursday, the Dow Jones (US30) Index was down 0.03%. The S&P 500 Index (US500) decreased by 0.22%. The Nasdaq Technology Index (US100) fell by 0.33%. The US stocks closed lower on Thursday, ceding some of the previous session’s gains as investors reassessed economic risks and the Federal Reserve’s response to potential inflation and slowing growth. Market sentiment remained cautious after the US Federal Reserve left rates unchanged but raised its inflation expectations while cutting its economic growth outlook.

The Mexican peso (MXN) weakened to more than 20.2 per US dollar, down from a four-month high reached on March 18, amid a rebound in the US dollar and the threat of tariffs that cast a shadow over Mexico’s growth prospects. The Organization for Economic Cooperation and Development warned that sustained US tariffs on Mexican products could trigger a recession, predicting the economy would shrink 1.3% in 2025 and 0.6% in 2026 if the duties remain unchanged.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) was down 1.24%, France’s CAC 40 (FR40) closed 0.95% lower, Spain’s IBEX 35 (ES35) Index was 0.76% cheaper, and the UK’s FTSE 100 (UK100) closed down 0.05%. The FTSE 100 index fell on Thursday as investors reacted to the Bank of England’s decision to keep interest rates at 4.5% and its cautious approach to future rate cuts. The Central Bank signaled it will continue to pursue a “gradual and cautious” strategy, maintaining its stance until further evidence of economic progress emerges.

The Swiss franc weakened to 0.88 per dollar after the Swiss National Bank (SNB) cut its key rate to 0.25%, the lowest level since September 2022. While the move was largely expected and the Central Bank refrained from committing to a specific policy path, the Central Bank noted that lower borrowing costs are appropriate to ensure that monetary conditions are consistent with low inflationary pressures. The move also prevents excessive appreciation of the franc as geopolitical risks, stable inflation in Switzerland, and uncertain economic policy in the US increase demand for the currency.

Sweden’s Riksbank kept the rate at 2.25% in March 2025, in line with expectations, citing virtually unchanged projections for inflation and economic growth. Policymakers said inflation is expected to remain above target through the end of the year but should stabilize around 2% in 2026.

The Reserve Bank of South Africa left the repo rate unchanged at 7.5% at its March 2025 meeting as risks to economic stability warrant caution. Inflation, although contained, has still risen, with goods inflation remaining low and services inflation rising. Inflation was steady at 3.2% in February, the highest in four months. The Central Bank expects core inflation to be 3.6% this year and 4.5% next year.

OPEC+ announced production cut plans for seven members, which will reduce output by 189,000-435,000 bpd monthly through June 2026. Production cuts by Kazakhstan, Iraq, and Russia are expected to offset the renewed production plans through next year.

Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was not trading yesterday, China’s FTSE China A50 (CHA50) fell by 0.98%, Hong Kong’s Hang Seng (HK50) lost 2.23%, while Australia’s ASX 200 (AU200) was positive 1.16%.

Hong Kong’s annual inflation rate eased to 1.4% in February 2025 from January’s four-month high of 2%. On a month-on-month basis, consumer prices fell by 0.1% in February, reversing a 0.4% rise in the previous month.

Malaysia’s annualized inflation rate eased to 1.5% in February 2025 from 1.7% in the previous two months, the lowest since January 2024 and in line with market estimates. Core Consumer Prices, excluding volatile fresh food and administrative costs, rose to 1.9% y/y, the highest in six months, after rising 1.8% in January. On a month-on-month basis, consumer prices rose by 0.5%, the sharpest pace in a year.

At Wednesday’s close, the Dow Jones Industrial Average (US30) was up 0.93%. The S&P 500 Index (US500) added 1.08%. The Nasdaq Technology Index (US100) jumped 1.41%. The Fed left the federal funds rate unchanged at 4.25-4.5% at its March 2025 meeting, extending a pause in the rate-cutting cycle that began in January and in line with expectations. Policymakers noted that uncertainty about the economic outlook has increased but still expect interest rates to fall by about 50 bps this year, the same as in the December prognosis. Meanwhile, GDP growth expectations for this year were revised downward to 1.7% from 2.1% in December.

Bitcoin (BTC/USD) traded near the $86,000 mark on Thursday, hitting its highest level in nearly two weeks during the session. Optimism is growing ahead of US president Donald Trump’s speech at the Blockwork digital asset summit later today. Trump will become the first sitting US president to speak at a digital asset conference, signaling his administration’s support for the industry. He has pledged to make the US the world’s capital of digital assets and recently created the Bitcoin Strategic Reserve and the US Digital Asset Reserve.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) was down 0.40%, France’s CAC 40 (FR40) closed up 0.70%, Spain’s IBEX 35 (ES35) added 0.40%, and the UK’s FTSE 100 (UK100) closed positive 0.02%. European equities rose for a fourth session on Wednesday, amid additional support from increased deficit spending as markets assessed the likelihood of a prolonged ceasefire between Russia and Ukraine. Meanwhile, Germany’s Bundestag approved an expected amendment to the debt brake that will boost budget spending on infrastructure and defense.

WTI crude oil prices traded near $67 per barrel amid rising US crude inventories and economic concerns weighing on prices despite geopolitical tensions. The latest EIA report showed a larger-than-expected 1.75 million barrel increase in nationwide inventories, although inventories in Cushing, Oklahoma, declined and fuel stocks fell.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) was down by 0.25%, China’s FTSE China A50 (CHA50) rose by 0.75%, Hong Kong’s Hang Seng (HK50) added 0.12%, and Australia’s ASX 200 (AU200) was positive 1.07%.

The Australian dollar fell below $0.635 on Thursday, marking the third consecutive decline, as traders reassessed the Reserve Bank of Australia’s (RBA) monetary policy outlook following weaker-than-expected employment data. Australia’s unemployment rate was unchanged at 4.1% in February, but the number of jobs unexpectedly fell, raising concerns about labor market softness. Market expectations for the next RBA rate cut continue to diverge, with some analysts predicting it will happen as early as May, while others expect it in July or August.

The New Zealand dollar fell to as low as 0.579 dollars on Thursday, even after data showed that the country’s economy came out of recession. New Zealand’s economy grew by 0.7% quarter-on-quarter in Q4, exceeding analysts’ expectations of 0.4% and the Reserve Bank’s expectations of 0.3%, after a revised 1.1% contraction in Q3. At the same time, annual GDP fell to a positive 1.1%, slightly better than the 1.4% decline expected. Despite the improvement, economic challenges remain and external factors, in particular escalating trade tensions, continue to pose risks. Expectations for policy easing remain firm, with markets expecting a rate cut of around 60 bps, equivalent to two or three rate cuts before the end of the year.

In March 2025, the PBOC kept key lending rates unchanged for the fifth consecutive month, in line with market expectations. The one-year prime rate, which is the benchmark for most corporate and home loans, was 3.1%, and the five-year prime rate, which guides real estate mortgages, remained unchanged at 3.6%. Both rates remain at historic lows after declines in October and July 2024. However, the PBOC noted that it will lower interest rates and adjust the bank’s reserve requirement rate at an appropriate time.

At the end of Tuesday, the Dow Jones Index (US30) fell by 0.62%. The S&P 500 Index (US500) was down 1.07%. The Nasdaq Technology Index (US100) lost 1.66%. Tesla shares fell by 5.3% after RBC Capital Markets lowered its price target, citing increasing EV competition. Alphabet shares fell by 2.3% after news that Google will acquire cloud security company Wiz for $32 billion. Other tech giants including Nvidia and Palantir also fell in price by 3.4% and 4% respectively. Investors are on edge ahead of Wednesday’s Federal Reserve decision, with markets generally expecting rates to remain unchanged. Meanwhile, a stronger-than-expected rise in housing starts contrasted with inflation concerns over pressure on import prices, adding to market uncertainty.

Equity markets in Europe rose steadily yesterday. Germany’s DAX (DE40) rose by 0.98%, France’s CAC 40 (FR40) closed 0.50% higher, Spain’s IBEX 35 (ES35) gained 1.58%, and the UK’s FTSE 100 (UK100) closed positive 0.29%. Germany’s outgoing parliament approved a significant increase in government borrowing, including a major overhaul of the country’s debt rules. The deal, negotiated by the election-winning conservative CDU/CSU bloc, as well as the SPD and Greens, exempts defense spending from debt limits and sets out a €500 billion infrastructure investment plan. As for monetary policy, traders have lowered expectations for ECB rate cuts this year and are now only looking at two cuts, likely in April and June. In addition, interest rates are not expected to fall below 2%.

WTI crude oil prices fell to $66.9 a barrel on Tuesday, wiping out gains over the past two sessions as the market is pressured by oversupply concerns. Oil demand is slowing due to weakening global trade and shipping, exacerbated by the ongoing trade war unleashed by US President Donald Trump, which continues to weigh on major economies and reduce growth. In addition, OPEC and its allies are set to increase production by 138,000 barrels per day, the first increase since 2022, leading to an expected surplus. Meanwhile, hopes for a ceasefire in Ukraine have led to speculation that sanctions on Russian oil could be lifted, potentially leading to a rebound in supplies.

The US natural gas prices (XNG/USD) rose more than 2% to $4.1 per mmbpd on Tuesday on record LNG exports and lower daily production. Output fell to a three-week low of 104.1 bcf/d, although the monthly average remains above February’s record.

Asian markets were mostly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 1.20%, China’s FTSE China A50 (CHA50) fell by 0.16%, Hong Kong’s Hang Seng (HK50) gained 2.46%, and Australia’s ASX 200 (AU200) was positive 0.08%. Mainland Chinese stocks retreated from multi-month highs as investors booked profits following a strong rally in Chinese technology and artificial intelligence-related stocks. The sector was also pressured by a renewed sell-off in shares of US tech giants.

The Bank of Japan left interest rates unchanged at 0.5%, as expected. The Central Bank maintained its expectations that Japan’s economy is likely to continue growing above potential but acknowledged some signs of weakness. Policymakers also favored giving more time to assess the impact of rising global economic risks, particularly higher US tariffs. Meanwhile, the monthly Tankan survey showed Japanese manufacturers were pessimistic in March amid concerns over US tariffs and a slowdown in China’s economy. Separate data showed Japan’s trade balance turned into a surplus in February, helped by strong exports.

The Australian dollar stabilized near $0.636 on Wednesday after a volatile start to the week as investors continued to assess the Reserve Bank of Australia’s monetary policy outlook. On Tuesday, RBA assistant governor Sarah Hunter said the February interest rate cut was aimed at easing restrictive policy, but emphasized that the board remains more cautious than markets about further rate cuts.

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%.

At the end of Wednesday, the Dow Jones (US30) fell by 0.20%. The S&P 500 Index (US500) was up 0.49%. The Nasdaq Technology Index (US100) added 1.13%. Stock indices mostly rose on Wednesday, although the Dow Jones Industrials Index fell to a 6-month low. Stocks found support on Wednesday amid easing price pressures after the February US Consumer Price Index rose less than expected. The February US CPI rose by 0.2% m/m and 2.8% y/y, which was weaker than expectations of 0.3% m/m and 2.9% y/y. February CPI excluding food and energy rose by 0.2% m/m and 3.1% y/y, weaker than expectations of 0.3% m/m and 3.2% y/y. Stock gains were limited by escalating trade tensions. On Wednesday, the European Union imposed tariffs on up to $28.3 billion worth of goods from the US, including soybeans, beef, and poultry, in response to US tariffs on steel and aluminum imports.

The Canadian dollar is holding near 1.44 per dollar, near a one-month low of 1.45 hit on March 3, as Canada imposed retaliatory tariffs of 25 percent on $21 billion worth of US goods after Trump’s duties on steel and aluminum took effect. The move raises costs for US manufacturers and increases trade uncertainty. Meanwhile, the Bank of Canada cut rates by 25 bps to 2.75%, marking a 225 bps easing from June 2024 to counter an expected slowdown in the economy. The Bank of Canada warned that the change in US tariff policy is eroding confidence in the economy and dampening domestic demand, and companies are already struggling to borrow as a weaker loonie drives up the cost of imports. Markets are predicting another rate cut before the end of the year.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 1.56%, France’s CAC 40 (FR40) closed higher by 0.59%, Spain’s IBEX 35 (ES35) fell by 0.57%, and the UK’s FTSE 100 (UK100) closed positive 0.53%. The US imposed 25% tariffs on European steel and aluminum, prompting the EU to announce retaliatory tariffs on US goods, resulting in the EU announcing retaliatory duties on €26 billion worth of US goods in April. Market sentiment improved on optimism about a possible ceasefire in Ukraine after Kyiv said it was willing to accept a US-brokered proposal, and after Washington restored military aid and resumed intelligence sharing with Ukraine.

WTI crude oil prices rose more than 2% to above $67.7 a barrel on Wednesday, extending gains for a second session as US data showing strong domestic demand and easing inflation boosted market sentiment. US consumer prices rose at the slowest pace in four months, raising hopes for a more patient Federal Reserve. Crude oil inventories rose by a smaller-than-expected 1.5 million barrels, according to government data.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.07%, China’s FTSE China A50 (CHA50) gained 0.25%, Hong Kong’s Hang Seng (HK50) fell by 0.76% and Australia’s ASX 200 (AU200) was negative 1.32%.

Caution prevailed in China after the end of the ‘two sessions’, with economists warning that the 5% growth target would be difficult to achieve due to intensifying domestic and external factors, as well as Beijing’s modest pledges to boost consumption and reduce overcapacity.

Australia’s Prime Minister said Australia will not impose retaliatory tariffs against the US. Instead, the government will continue to seek an exemption, warning that retaliatory measures could increase consumer spending and lead to higher inflation. Meanwhile, Australia’s consumer inflation expectations for the next 12 months fell to 3.6% in March from 4.6% in February, indicating that price pressures in the economy are easing.