InvestMacro

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

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

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

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

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

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

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

At the end of Tuesday, the Dow Jones Index (US30) was up 0.37%. The S&P 500 Index (US500) was down 0.47%. The Nasdaq Technology Index (US100) fell by 1.24%. Investor sentiment continued to be pressured by geopolitical and trade tensions after President Trump confirmed the imposition of tariffs on Mexican and Canadian imports, previously delayed by a month. There were also reports that the US was tightening restrictions on China’s chip industry. The technology, communication services, and utilities sectors fared the worst, while real estate, materials, and consumer staples were the gainers.

Today, investors are awaiting Nvidia’s earnings report, which could be a new catalyst for the market. Nvidia, like other AI-related stocks, has recently come under pressure due to concerns over China’s DeepSeek project, raising doubts about the sustainability of the AI rally. Market participants are also awaiting the second estimate of fourth-quarter GDP growth at the end of the week, as well as the upcoming PCE Price Index report, which will provide key insights into the outlook for the economy and monetary policy.

BTC/USD fell below $88,000, its lowest in 3 months, as concerns over a slowing US economy, rising inflation, and Trump’s aggressive trade policies eroded investor confidence. Bitcoin has fallen about 20% since Trump’s inauguration in January as initial optimism over his digital-asset-friendly stance fades. Other major digital assets, including ETH and SOL, have also declined, and bitcoin ETFs saw record outflows of nearly $1 billion in February. Industry issues such as the $1.5 billion hack of Bybit also dampened sentiment.

Equity markets in Europe traded flat on Tuesday. Germany’s DAX (DE40) fell by 0.07%, France’s CAC 40 (FR40) closed down 0.49%, Spain’s IBEX 35 (ES35) added 0.80%, and the UK’s FTSE 100 (UK100) closed positive 0.11%. Eurozone wages were 4.12% year-on-year in the fourth quarter of 2024, slowing from the 31-year high of 5.43% recorded in the previous quarter. The data brought some relief to European Central Bank policymakers as they continue their efforts to contain inflation while supporting sluggish economic growth. The ECB recently announced its plans to continue easing monetary policy, with money markets anticipating at least two interest rate cuts before the end of December.

The formation of a new government coalition in Germany also remains in the spotlight. Conservative leader Friedrich Merz intends to strike an agreement with the SPD “in the near future,” while talks on increased defense spending continue. On the corporate front, shares of Siemens Energy and Infineon Technologies are down 7.3% and 2.6% respectively amid concerns over US restrictions on the Chinese technology sector and ahead of Nvidia’s earnings report.

WTI crude oil prices were trading near $69 a barrel on Wednesday, near their lowest level since last December, as US economic concerns and broader market uncertainty put pressure on the outlook for energy demand. President Trump’s foreign policy also put pressure on oil, with the prospect of a peace deal between Russia and Ukraine raising expectations of the lifting of Russian sanctions, which would pave the way for more Russian oil exports.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) fell by 1.39%, China’s FTSE China A50 (CHA50) lost 1.14%, Hong Kong’s Hang Seng (HK50) decreased by 1.32%, and Australia’s ASX 200 (AU200) was negative 0.68%. Hong Kong stocks rose by 2.3% on Wednesday, reversing a weak session the previous day amid strong gains across sectors. The mood was upbeat as the city’s Financial Secretary Paul Chan is due to unveil his plan to reduce Hong Kong’s deficit while mitigating the negative effects of a slowing Chinese economy and rising trade tensions with the US.

The Australian dollar fell below $0.633 on Wednesday, nearing two-week lows, as weaker-than-expected economic data fueled expectations of further interest rate cuts by the Reserve Bank of Australia (RBA). Australia’s monthly Consumer Price Index was unchanged at 2.5% in January, defeating expectations of a slight rise to 2.6%. On the external front, the Aussie faced additional pressure from US President Donald Trump’s tariff proposals, which could disrupt global trade and negatively impact export-dependent economies such as Australia.

At the end of Monday, the Dow Jones Index (US30) added 0.08%. The S&P 500 Index (US500) was down 0.50%. The Nasdaq Technology Index (US100) decreased 1.21%. Among individual stocks, Palantir, a key player in defense AI, fell sharply by 10.5% and is now down nearly 30% from its peak. Nvidia also fell by 3.1% as it prepares to release its earnings report on Wednesday, while Microsoft lost 1% amid concerns about slowing data center spending growth. On the other hand, Apple rose by 0.6% as it announced plans to invest $500 billion in the US over the next four years and plans to hire 20,000 new employees.

Bitcoin prices fell below $92,000, hitting their lowest level since last November. The collapse in risk assets began last week amid growing concerns about the outlook for the US economy, amplified by President Donald Trump’s escalating tariff threats and the Federal Reserve’s hawkish stance on interest rates. Meanwhile, MicroStrategy bought another 20,365 bitcoins worth nearly $2 billion, bringing the total number of bitcoins to 499,096 or roughly $33.1 billion.

Equity markets in Europe traded flat on Monday. Germany’s DAX (DE40) rose by 0.62%, France’s CAC 40 (FR40) closed down 0.78%, Spain’s IBEX 35 (ES35) added 0.47%, and the UK’s FTSE 100 (UK100) closed negative 0.01%. In Germany, Friedrich Merz’s conservatives won the election. Investors are closely watching for signs of Germany’s fiscal strategy, while economists remain divided on the government’s ability to enact significant economic reforms.

Ukraine and the United States are in the final stages of negotiating a mineral deal considered key to ending Russia’s three-year war in Ukraine. Kyiv and Washington are interested in US access to Ukraine’s underground wealth, but President Volodymyr Zelenskyy said any deal must include specific security guarantees. Zelenskyy refused to sign an initial draft of the agreement earlier this month, sparking displeasure at the White House.

WTI crude prices climbed above $71 a barrel on Tuesday, posting a second straight day of gains after the US imposed additional sanctions on oil trade from Iran, adding to fears of dwindling global supplies. On Monday, the US imposed sanctions on brokers, tanker operators, and shipping companies involved in the sale and transportation of Iranian oil, affecting 22 individuals and 13 vessels based in China, the UAE, India, and Hong Kong. This is the second round of sanctions as President Donald Trump seeks to zero out Iran’s crude oil exports to prevent the country from obtaining nuclear weapons.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.26%, China’s FTSE China A50 (CHA50) fell by 0.37%, Hong Kong’s Hang Seng (HK50) lost 0.58% and Australia’s ASX 200 (AU200) was up 0.14%. Hong Kong stocks fell 1.4% in Tuesday morning trading, marking a second session of sharp declines amid losses in the broad sector, especially consumer discretionary and technology. Traders retreated from risky assets after the US stepped up restrictions on Chinese investment and continued to impose tariffs on Canada and Mexico. Caution also intensified ahead of China’s official PMI data for February to be released over the weekend, with the reading expected to be lower due to the impact of the New Year’s Eve holiday break.

The offshore yuan remained weak around 7.26 per dollar as investors remained cautious amid escalating trade tensions between the US and China. President Donald Trump is reportedly planning to tighten controls on chip exports to China following a recent executive order to restrict Chinese investment in technology and other strategic US industries.

The Australian dollar traded near US$0.635 on Tuesday, remaining under pressure after falling for two consecutive sessions, driven by US President Donald Trump’s recent comments on tariffs that raised fears of a possible global trade war. On Monday, Trump said tariffs on Canada and Mexico “will be imposed” as soon as the one-month delay period ends next week. Domestically, investors are also awaiting Australia’s monthly inflation report on Wednesday, which is expected to provide crucial insight into the future direction of monetary policy.

On Friday, the Dow Jones Index (US30) declined by 1.69% (for the week -2.89%). The S&P 500 Index (US500) fell by 1.71% (down -1.67% for the week). The Nasdaq Technology Index (US100) was down 2.06% (week-to-date -1.93%). The US stocks fell on Friday as economic data heightened concerns about a slowing US economy and persistent inflation, prompting investors to seek safer assets. Consumer sentiment also suffered, with the University of Michigan Index falling to 64.7, reflecting growing concerns about inflation, which consumers expect to rise to 4.3% next year. Meanwhile, S&P Global’s US manufacturing PMI rose to 51.6 in February 2025 from 51.2 in January, beating market expectations of 51.5, preliminary estimates showed. This is the highest reading since June 2024, indicating the sector’s continued recovery.

Mexico’s GDP contracted by 0.6% in Q4, the sharpest contraction since Q3 2021, underscoring the weakness in the economy. Nevertheless, strong remittances, fiscal discipline and Mexico’s attractiveness for asset transactions are supporting the peso, while dollar softness is generally adding to its resilience.

In Canada, a 0.4% decline in January retail sales, the first in seven months, points to a slowdown in consumer spending after a boom in December, raising concerns about domestic market dynamics. In addition, lingering uncertainty over US tariff threats targeting a significant portion of Canadian exports has dampened the outlook for loonie demand. Conversely, strong inflationary pressures have highlighted the Bank of Canada’s challenge in balancing growth and price controls.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) fell by 0.12% (week-to-date -1.34%), France’s CAC 40 (FR40) closed up 0.39% (week-to-date -0.33%), Spain’s IBEX 35 (ES35) lost 0.12% (week-to-date +0.06%), and the UK’s FTSE 100 (UK100) closed negative 0.04% (week-to-date -0.84%). European equities closed slightly higher, retreating from record highs reached earlier in the week. Markets were assessing the latest PMI data and corporate reports, and positioned ahead of the German elections. Friedrich Merz announces his victory in the German elections, while Scholz concedes defeat. Friedrich Merz, the leader of Germany’s conservative opposition, is expected to form a coalition government aimed at fiscal reforms. Also, Friedrich Merz actively supported Ukraine and condemned the Russian invasion during the election campaign. On February 24 (the anniversary of Russia’s invasion of Ukraine), many heads and officials of European countries will come to Kyiv to discuss the situation on the further settlement of the bloody conflict. In turn, the British prime minister will travel to the United States on Monday to present his plan for a settlement of the conflict.

Iraq’s oil ministry announced that it has completed all necessary procedures to resume oil exports through the Iraqi-Turkish pipeline, signaling a possible resolution to the nearly two-year dispute that has disrupted regional crude flows. Traders also continue to keep an eye on talks to end the war in Ukraine, as a peace deal could lead to an easing of sanctions on Russian oil, potentially boosting global supply. Meanwhile, in the Middle East, the Gaza ceasefire is facing problems, with Hamas accusing Israel of jeopardizing a five-week truce by delaying the release of Palestinian prisoners. The first phase of the truce ends in early March, and details of a planned follow-up phase have yet to be agreed.

Asian markets traded flat last week. Japan’s Nikkei 225 (JP225) was down 0.81%, China’s FTSE China A50 (CHA50) added 2.83%, Hong Kong’s Hang Seng (HK50) increased by 3.18%, and Australia’s ASX 200 (AU200) was negative 2.82%.

Singapore core consumer prices in January 2025 came in at 0.8% y/y on an annualized basis, down sharply from a revised 1.7% y/y in the previous month and below market estimates of 1.5% y/y. This is the lowest core inflation rate since June 2021, mainly due to lower inflation in almost all major categories.

The New Zealand dollar rose to around $0.577 on Monday, rebounding from the previous session’s losses and trading at a more than two-month high after domestic data showed strong retail sales. New Zealand’s Q4 2024 retail sales rose by 0.9% quarter-on-quarter, the biggest increase in three years, following a revised figure for the previous period. This supported expectations of a slower pace of rate cuts, consistent with the RBNZ’s statement last week that future cuts are likely to be smaller and that the easing cycle is nearing completion.