Daily Market Roundup

North America News

U.S. Stock Markets Reverse Gains, Close Lower Amid Late Selling

Markets initially attempted a recovery but fell sharply in the final trading hours.

• S&P 500: -1.2%
• Nasdaq Composite: -0.35%
• Russell 2000: -0.4%
• Dow Jones Industrial Average: -1.6%

The ongoing trade war, weak economic data, and Fed policy uncertainty kept investor sentiment cautious.

Target Warns of Slowdown in U.S. Consumer Spending

Retail giant Target reported soft sales in February, raising concerns over declining consumer confidence.

• “Our topline performance for the month was soft,” CFO Jim Lee stated.
• The company cited poor weather but also noted that weaker consumer sentiment impacted discretionary spending.
• Comp sales for 2025 are expected to remain flat, signaling no major rebound.
• Tariff uncertainty and rising costs are expected to create profit pressure in Q1.

Fed’s Williams: Uncertainty on How Tariffs Will Impact Economy

New York Fed President John Williams commented on the economic risks of tariffs:

• Tariffs will impact inflation and economic growth, though the extent remains unclear.
• Businesses may pull back on investment, while consumers could spend less.
• Inflation expectations remain stable, but UMich data will be key to watch.
• “I do factor in some effects of tariffs now on inflation and prices”, Williams noted.

U.S. Commerce Secretary Lutnick: Trade Policy Will Reset on April 2

U.S. Commerce Secretary Howard Lutnick emphasized that the April 2 trade policy reset is tied to reducing opioid deaths.

• “We need to see material reductions in opioid deaths.”
• Canada and Mexico have “abused the U.S. on autos” and need to prove they can stop fentanyl flow for tariffs to be lifted.
• The U.S. wants car manufacturing to return to Michigan and Ohio.
• Predicted interest rates will decline by 100–150 basis points over time.

Trump Threatens to Escalate Tariffs if Canada Retaliates

Trump warned Canada against retaliatory tariffs, stating on Truth Social:

“Please explain to Governor Trudeau, of Canada, that when he puts on a Retaliatory Tariff on the U.S., our Reciprocal Tariff will immediately increase by a like amount!”

Trump Plans to Announce Ukraine Minerals Deal During Congress Speech

Reuters reports that Trump wants to announce the Ukraine minerals deal during his speech to Congress tonight.

• The agreement reportedly includes infrastructure and ports.
• While Ukraine never said the deal was off the table, details remain unclear.

Goldman Sachs CEO Solomon says chance of a 2025 US recession is not zero

• Risks rising
• chance of a US 2025 recession is small but not zero
• fiscal spending to boost economy

The US has ‘paused’ all current military aid to Ukraine

• Bloomberg headline

Via Bloomberg:

• the official said all US military equipment not currently in Ukraine would be paused, including weapons in transit on aircraft and ships or waiting in transit areas in Poland
• Trump ordered Defense Secretary Pete Hegseth to execute the pause, the person said.

Trudeau Slams U.S. Tariffs, Warns of Economic Fallout

Canadian Prime Minister Justin Trudeau reacted strongly to Trump’s tariff decision, stating:

“Americans will pay more for groceries, gas, and cars, and potentially lose thousands of jobs.”

• He called the tariffs a violation of USMCA and a threat to U.S.-Canada trade relations.

Mexico to Announce Retaliatory Measures on Sunday

Mexican President Claudia Sheinbaum pushed back against U.S. tariffs, stating:

• Mexico took measurable steps to fight fentanyl, categorically denying White House criticism.
• Tariff and non-tariff measures will be announced Sunday.
• Mexico does not want a trade confrontation, but will defend its economy.

Ontario Imposes 25% Export Tariff on U.S. Electricity, Threatens Cutoff

Ontario’s Premier Doug Ford has placed a 25% tariff on electricity exports to the U.S., escalating trade tensions.

• Ontario supplies power to 1.5 million American homes.
• Ford warned that if Trump escalates tariffs on April 2, Ontario could cut off electricity exports entirely.
• Other Canadian provinces (Quebec, Manitoba, and British Columbia) are also considering non-tariff responses.

More at the link.

Trudeau: Canada Will Not Back Down, Prepares Massive Tariff Response

Canadian Prime Minister Trudeau reiterated:

• C$30 billion in retaliatory tariffs immediately.
• Additional C$125 billion in tariffs in 21 days if the U.S. does not reverse course.
• Legal challenges via USMCA and WTO are being prepared.
• Called Trump’s fentanyl pretext for tariffs “completely false”, accusing the U.S. of sabotaging its own economy.
• Warned Canadians to brace for economic hardship but promised support measures.

Canada Confirms 25% Retaliatory Tariffs on U.S. Imports

In response to U.S. tariffs, Canada will:

• Impose 25% tariffs on U.S. imports worth C$30 billion starting Tuesday.
• Consider non-tariff measures if U.S. tariffs persist, with discussions ongoing with provinces and territories.

Canada Retaliates Against U.S. Tariffs with Nickel Export Ban

Ontario Premier Doug Ford announced that the province will completely halt nickel exports to the U.S., escalating trade tensions in response to Trump’s 25% tariff on Canadian goods.

• Nickel is a critical mineral used in EV batteries, aerospace, and steel production.
• This move could disrupt U.S. supply chains, particularly in the automotive and tech industries.
• The U.S. is expected to respond swiftly, with potential countermeasures on Canadian exports.

Commodities News

Gold Rises to $2,918 as Tariff War and Recession Fears Grow

Gold climbed 0.62% to $2,918, driven by:

• 25% U.S. tariffs on Canada and Mexico, 10% on China, fueling haven demand.
• Atlanta Fed GDPNow slashed Q1 2025 growth forecast to -2.8%, sparking recession fears.
• U.S. Treasury yields dropped, boosting gold’s appeal as markets price in 74bps of Fed rate cuts (up from 70bps last week).
• Traders now await ISM Services PMI, Jobless Claims, and Nonfarm Payrolls for further guidance.

Oil Stages a Comeback, Finishes Near Flat Despite OPEC+ Headwinds

WTI crude oil settled at $68.26, down 11 cents, after rebounding $1.40 from session lows of $66.77.

• The low tested key support levels from late last year.
• China’s upcoming fiscal policy measures could provide near-term demand support.
• OPEC+ confirmed the return of 2.2 million barrels per day over the next two years, though supply hikes remain “subject to market conditions”.

Silver Rises to $32 Amid Intensifying Global Trade War

Silver prices rose 0.5% to near $32.00, benefiting from:

• Retaliatory tariffs by China, Mexico, and Canada, escalating trade tensions.
• Weaker U.S. bond yields and a declining dollar, with the 10-year Treasury yield falling to 4.14%.
• Increased expectations for Fed rate cuts, with the CME FedWatch tool showing an 87% chance of a June cut (previously 71%).

Cocoa Prices Drop on Fading Supply Concerns

Cocoa fell nearly 11%, hitting its lowest level since November, as supply fears eased.

• The International Cocoa Organization projects a 142kt global surplus for the 2024/25 season.
• Production recovery and weaker demand—due to high prices—are contributing to the market shift.
• Australia’s bumper wheat harvest (+31% y/y) may also ease food inflation concerns.

Iron Ore Falls Below $100/t as China Reduces Steel Output

Iron ore dropped below $100/t for the first time since mid-January due to:

• Chinese steel mills cutting production to reduce pollution ahead of the National People’s Congress meeting.
• Speculation of further government-mandated capacity cuts.
• Weak domestic demand and trade tensions, which are affecting export prospects.

J.P. Morgan Maintains Bullish Gold Outlook, Sees Prices Near $3,000 by Late 2025

J.P. Morgan forecasts gold could approach $3,000 per ounce by Q4 2025, citing:

• Inflation hedging.
• Geopolitical uncertainty.
• Global monetary policy shifts.
• Central banks increasing gold reserves.

Europe News

European Equities Plunge After Record Highs

Markets in Europe sold off sharply, led by a steep decline in Germany.

• STOXX 600: -2.2%
• DAX (Germany): -3.5%
• CAC 40 (France): -2.1%
• FTSE 100 (UK): -1.3%
• IBEX 35 (Spain): -2.5%
• FTSE MIB (Italy): -3.25%

Eurozone Unemployment Rate Falls to 6.2% in January

The Eurozone’s unemployment rate came in at 6.2% (expected: 6.3%, *prior: 6.3% revised to 6.2%).

• The labor market remains resilient despite economic softness over the past year.

UK Retail Prices Set to Rise as Business Costs Increase

The British Retail Consortium (BRC) reported shop prices rose 0.4% m/m in February, reversing January’s decline.

• Food inflation hit 2.1%, with staples like butter, cheese, eggs, and bread seeing price increases.
• Retailers warn of further price hikes, citing:
  • A 7% increase in minimum wage costs.
  • New packaging levies.
  • Higher payroll taxes.
• The Bank of England expects inflation to reach 3.7% by Q3, adding pressure on households.

Germany Announces €500 Billion Special Defense & Infrastructure Fund

Incoming Chancellor Friedrich Merz announced a €500 billion defense and infrastructure fund, sparking market speculation.

• The Bundesbank proposed reforms to Germany’s debt brake to prioritize investment spending.
• The move represents 12% of German GDP—one of the largest defense expansions in modern history.

ECB to Cut Rates by 25bps This Week, Signaling Future Easing Path

Deutsche Bank expects the European Central Bank (ECB) to lower its policy rate by 25 basis points to 2.50% on March 6.

• The total rate cuts so far would reach 150bps.
• Investors will watch ECB’s updated macroeconomic projections to assess policy outlook.
• A possible pause in April may be hinted at before resuming cuts later in the year.

Asia-Pacific & World News

China to Issue Policy Promoting Open-Source Chips

China is set to publish guidelines aimed at increasing the use of open-source RISC-V chips, according to Reuters.

• RISC-V chips are less powerful than Intel and AMD’s x86 chips but are used in smartphones and AI servers.
• The policy will push for cost-effective alternatives for Chinese AI models, particularly after the DeepSeek efficiency tests.
• Alibaba’s XuanTie division, which sells commercial RISC-V processors, is expected to benefit the most.
• The move reflects growing U.S.-China technological divergence.

China’s “Two Sessions” Meetings Begin, Set to Conclude on March 11

China’s annual parliamentary meetings are now underway, with key economic and policy decisions expected.

• The National People’s Congress and Chinese People’s Political Consultative Conference will outline 2025 economic priorities.
• The meetings are being closely watched for policy signals on trade, economic growth, and tech strategy.

China Says It Is Open to Dialogue on Tariffs, But Will Defend Sovereignty

A spokesperson for China’s National People’s Congress stated that:

• China is willing to resolve trade disputes with the U.S. through dialogue.
• Trade relations should be mutually beneficial and follow WTO rules.
• China will firmly defend its sovereignty and security and will not accept threats or oppression.
• Hopes for U.S.-China cooperation but emphasizes respect for major national interests.

China Announces Retaliatory Tariffs on U.S. Agricultural Goods

China will impose additional tariffs on U.S. imports, effective March 10:

• 15% tariffs on chicken, wheat, corn, and cotton.
• 10% tariffs on sorghum, soybeans, pork, beef, seafood, fruits, vegetables, and dairy.
• The move is a direct response to Trump’s latest tariff increase.

China Warns of “Necessary Countermeasures” to Trump’s Higher Tariffs

China’s Commerce Ministry strongly opposed the U.S.’s additional 10% tariffs on Chinese imports, set to take effect on March 4.

• Beijing vowed to take necessary countermeasures to protect its trade interests.
• Accused the U.S. of “unilateralism and bullying” in international trade.
• Details on China’s response remain unclear, but potential retaliation could impact U.S. exports.

PBOC sets USD/ CNY central rate at 7.1739 (vs. estimate at 7.2727)

• PBOC CNY reference rate setting for the trading session ahead.

PBoC injects 38.2bn yuan via 7-Day Reverse Repos at 1.5%

• 381.5bn mature today
• net drains 343.3bn yuan in Open Market Operations

Australia’s Retail Sales Rebound in January, Rising 0.3% m/m

Retail sales rose 0.3% in January (expected: 0.3%, prior: -0.1%), signaling resilient consumer demand.

• The Australian Bureau of Statistics (ABS) highlighted food-related spending as a key driver.
• Annual retail sales grew 3.8%, despite ongoing economic challenges.

RBA Minutes Reveal Rate Cut Driven by Downside Risks

The Reserve Bank of Australia (RBA) cut rates in February to 4.10%, citing:

• Downside risks to the economy and concerns over tight policy stifling growth.
• A slowdown in inflation and wages justified easing.
• Policymakers kept future rate cuts flexible, with no commitment to further reductions.
• Inflation remains above target, meaning rates could stay at 4.1% for an extended period if price pressures persist.

Australia’s Largest Bank CEO Expects Rate Cuts Later in the Year

The Commonwealth Bank of Australia CEO cautioned that:

• The RBA’s easing cycle will be “slower and shallower” than expected.
• Further rate cuts won’t arrive until later in 2025.
• Inflation remains a concern, meaning future rate decisions will depend on economic data.

Australia’s Q4 GDP Growth Expected to Stay Soft, 2025 Recovery in Focus

Analysts at National Australia Bank (NAB) forecast Q4 GDP growth at 0.5% q/q, bringing annual growth to 1.2% y/y.

• Household consumption is the key driver, showing resilience despite cost-of-living pressures.
• Business investment and housing construction remain weak, weighed down by high borrowing costs and supply constraints.
• RBA’s policy stance unlikely to change immediately, but the bank will monitor how quickly economic momentum builds in 2025.

Australia’s Consumer Confidence Drops Amid Economic Uncertainty

The ANZ-Roy Morgan Australian Consumer Confidence Index fell to 87.7 (prior: 89.8), reversing its recent rebound.

• The survey has been in negative territory since early 2022, reflecting persistent economic pessimism.
• The drop suggests households remain cautious, which could weigh on future consumption growth.

New Zealand’s Building Permits Rebound in January

New Zealand’s January building permits rose by 2.6% m/m (prior: -5.6%), signaling a modest recovery.

• However, y/y permits remain down -7.2%, reflecting broader weakness in construction activity.
• The data suggests housing demand is stabilizing, but higher interest rates remain a headwind.

Japan’s Q4 Corporate Capex Falls 0.2%, Signals Tepid Domestic Demand

Japan’s corporate capital expenditure (capex) fell 0.2% y/y in Q4, marking the first decline in over three years.

• Q3 capex surged 8.1%, making Q4’s drop more notable.
• Corporate sales rose 2.5%, while recurring profits jumped 13.5%.
• Capex data will feed into revised GDP figures due on March 11.
• Japan aims to double annual corporate capex to 200 trillion yen by 2040, but rising global uncertainties are making firms cautious.

Japan Denies Yen Devaluation, Won’t Comment on Trump’s Remarks

Japan’s Finance Minister Shunichi Kato rejected claims that the country is deliberately weakening the yen, stating:

• “Japan is not pursuing a policy of devaluing the yen.”
• He confirmed discussions with U.S. Treasury Secretary Bessent on forex stability.
• Kato declined to comment on Trump’s accusations regarding currency manipulation.

Japan’s January Unemployment Rate Rises to 2.5%

Japan’s unemployment rate increased to 2.5% in January (expected: 2.4%, prior: 2.4%).

• Job-to-applicant ratio rose slightly to 1.26, indicating continued tight labor market conditions.

South Korea’s Industrial Output and Retail Sales Decline in January

South Korea’s economy showed signs of weakness as both industrial production and retail sales fell:

• Industrial output: -2.3% m/m (-4.1% y/y) (expected: -3.1% m/m).
• Retail sales: -0.6% m/m (prior: +0.2%).
• Service sector output: -0.8% m/m (prior: +1.1%).

The decline in manufacturing and consumption highlights the challenges facing South Korea, as global trade headwinds and weak domestic demand weigh on growth.

Crypto Market Pulse

Bitcoin Rallies $6,000 in Late U.S. Trading

Bitcoin surged $6,000 intraday, hitting $88,465, marking another volatile session in an already wild trading week.

• The move comes after $10,000 swings on Sunday and Monday, reinforcing heightened market uncertainty.

Crypto Market Drops Below $2.7 Trillion as Trump Tariff Fears Hit Sentiment

The cryptocurrency market lost 3.4% on Tuesday, as investors pulled capital amid escalating trade tensions.

• The Nasdaq filed documentation with the SEC to list a Hedera (HBAR) spot ETF.
• Bitcoin stabilized above $82,000 after a 13% drop from its $95,000 high post-Trump’s crypto strategic reserve announcement.
• $390 million in BTC long contracts were liquidated, making up 40% of the $1 billion in total market liquidations.

Altcoins See Heavy Losses as Capital Exits Risk Assets

• Privacy coins gained traction, with Pi Coin securing a major listing on CoinMarketCap.
• Investors withdrew over $400 billion from altcoins, following the announcement of U.S. tariffs on Mexico and Canada.
• Solana-based meme coins lost over 20%, as traders moved away from low-liquidity assets.
• U.S.-based cryptocurrencies lost 14.75%, translating to a $63 billion market cap decline.
• XRP remains above $2, as traders continue to defend key support levels.

Pi Coin Rallies on Major Exchange Listings

Pi Network, a privacy-focused mobile-mined cryptocurrency, saw increased demand after securing new listings.

• Trading was previously limited to P2P and OTC markets due to AML compliance concerns.
• Trump’s regulatory shift helped Pi Coin secure a Bitget listing, with Binance reportedly next.
• Pi Coin is up 2.3% at $1.74, making it the only top-20 crypto in profit amid the broader market downturn.

Flowdesk Raises $102 Million to Expand Crypto Services

French crypto trading firm Flowdesk secured $102 million in funding to expand into:

• Tokenization and OTC derivatives.
• A crypto credit desk for institutional investors.
• A new office in the UAE to scale global operations.

Nasdaq Files 19b-4 for Grayscale’s Hedera (HBAR) Spot ETF

Nasdaq submitted a 19b-4 filing to the SEC to list a Grayscale Hedera (HBAR) spot ETF, signaling:

• Growing institutional interest in altcoin ETFs.
• A formal SEC review process upon Federal Register publication.
• Potential regulated exposure to Hedera for U.S. investors.

Aave Expands Lending Markets to Sonic in Layer-1 Integration

• Aave launched lending markets on Sonic, its first Layer-1 expansion of 2025.
• Sonic rebranded from Fantom, introducing fee monetization mechanisms.
• The move aligns with Aave’s shift away from the Polygon PoS chain, as it focuses on new Layer-1 integrations.

The Day’s Takeaway

Day’s Takeaway: Key Market Trends & Developments

U.S. Markets: Stocks Struggle as Trade War and Economic Fears Deepen

U.S. equities sold off late in the session, with investors reacting to tariff escalations, weak economic data, and Fed uncertainty.

• S&P 500: -1.2%
• Nasdaq Composite: -0.35%
• Russell 2000: -0.4%
• Dow Jones Industrial Average: -1.6%

Key Drivers:

• Target warned of a consumer spending slowdown, raising concerns about weak demand.
• Fed’s Williams acknowledged uncertainty over tariffs, noting their inflationary and growth risks.
• The Atlanta Fed GDPNow model slashed Q1 growth forecasts to -2.8%, fueling recession fears.
• Gold surged past $2,918, benefiting from weak U.S. data and trade war tensions.

Commodities: Gold, Oil, and Silver in Focus

Gold Surges on Economic Uncertainty

Gold prices rose 0.62% to $2,918, driven by:

• U.S. tariffs on Canada, Mexico, and China, increasing safe-haven demand.
• Weak U.S. economic data, with recession risks rising.
• Traders pricing in 74bps of Fed rate cuts, up from 70bps last week.

Oil Recovers After Hitting Key Support

WTI crude closed at $68.26, recovering from a low of $66.77.

• The market remains under pressure from OPEC+’s supply hike, but China’s upcoming stimulus could provide demand support.

Silver Strengthens to $32 as Trade War Intensifies

• Investors piled into silver amid escalating trade tensions.
• Falling U.S. Treasury yields and a weaker dollar supported the rally.

Europe: Stocks Plunge After Recent Highs

European equities tumbled sharply, erasing prior gains.

• STOXX 600: -2.2%
• DAX (Germany): -3.5%
• CAC 40 (France): -2.1%
• FTSE 100 (UK): -1.3%
• IBEX 35 (Spain): -2.5%
• FTSE MIB (Italy): -3.25%

Key Developments:

• Germany announced a €500 billion defense and infrastructure fund, shaking bond markets.
• The Eurozone unemployment rate fell to 6.2%, defying economic weakness.

Global: U.S.-Canada-Mexico Trade Tensions Escalate

• Canada imposed 25% retaliatory tariffs on U.S. imports.
• Ontario placed a 25% export tax on U.S. electricity, threatening a total cutoff.
• Mexico will announce further retaliatory measures on Sunday.
• Trump threatened to raise tariffs further if Canada retaliates.

Meanwhile, China responded with counter-tariffs, imposing:

• 15% duties on U.S. wheat, corn, and cotton.
• 10% duties on sorghum, soybeans, pork, and dairy.

China also signaled willingness to negotiate, but warned it would “not accept threats and oppression.”

Crypto: Market Selloff Continues as Bitcoin Recovers

The crypto market capitalization dropped below $2.7 trillion, losing 3.4% on the day.

• Bitcoin bounced back to $88,465, erasing some losses after a $6,000 surge in late trading.
• Investors pulled $400 billion from altcoins, with U.S.-based cryptos losing $63 billion.
• Privacy-focused Pi Coin outperformed, gaining 2.3% as it secured major exchange listings.
• Nasdaq filed to list a Grayscale Hedera (HBAR) ETF, signaling increased institutional interest.
• Aave expanded lending to Sonic, shifting away from Polygon PoS.

Final Thought:

Markets remain on edge as trade tensions escalate, economic growth slows, and Fed rate cut expectations fluctuate. Gold, silver, and crypto volatility reflect growing uncertainty, while stocks struggle under policy risks and consumer weakness.

With more tariff decisions looming and key economic data ahead, investors are bracing for another volatile session tomorrow.