InvestMacro

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.

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.

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.

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.