North America News
US Stock Market Closes Higher Despite Volatile Week
Despite a turbulent week marked by Trump’s diplomatic tensions with Zelenskyy, US stocks rebounded on Friday:
Major Indices Performance
- Dow Jones: +600.49 pts (+1.39%) to 43,839.99.
- S&P 500: +92.82 pts (+1.58%) to 5,954.39.
- Nasdaq: +302.86 pts (+1.63%) to 18,847.28.
- Russell 2000: +23.40 pts (+1.09%) to 2,163.06.
Weekly Market Performance
- Dow Jones: +0.95%.
- S&P 500: -0.98%.
- Nasdaq: -3.47%.
- Russell 2000: -1.47%.
Despite Friday’s recovery, broader indices closed lower for the second consecutive week, reflecting ongoing market instability driven by trade policies and geopolitical tensions.
Atlanta Fed GDPNow Tracker Plunges to -1.5% for Q1
The Atlanta Fed Q1 GDP tracker has dropped sharply from +2.3% to -1.5%, marking one of its steepest declines.
Key factors driving the decline:
- Net exports’ contribution fell from -0.41% to -3.70%.
- Real personal consumption growth fell from 2.3% to 1.3%.
The data suggests a potential recessionary trend emerging in the US economy.
US January Core PCE Inflation Steady at 2.6%
Key highlights from the US PCE report:
- Core PCE (excluding food & energy) +2.6% y/y, as expected (prior +2.8%).
- Core PCE m/m: +0.3%, in line with forecasts.
- Headline PCE: +2.5% y/y, matching expectations.
- Personal income: +0.9% (expected +0.3%).
- Personal spending: -0.2% (expected +0.1%).
The data suggests inflation remains elevated, reinforcing the Fed’s cautious stance.
Meanwhile, spending on vehicles took a dive, like due to bad weather.
US Trade Deficit Surges to Record -$153.26B in January
According to Census Bureau data:
- Trade deficit widened from -$122.11B to -$153.26B, driven by a $34.6B surge in imports.
- Exports: $172.2B (+3.3B from December).
- Imports: $325.4B (+34.6B from December).
Trump’s anticipated tariffs on China have likely contributed to this jump.
US Advance Wholesale Inventories Increase 0.7%
- Wholesale inventories: +0.7% m/m, exceeding expectations (-0.5%).
- Retail inventories: Down 0.1%, though up 4.9% y/y.
Goolsbee Warns Against Overestimating Productivity Impact
Chicago Fed President Austan Goolsbee cautioned that expectations regarding productivity growth may be overly optimistic. He highlighted the potential challenge for the Federal Reserve if anticipation exceeds reality, signaling the need for cautious economic forecasting.
Trump-Zelenskyy Meeting Ends in Diplomatic Fallout
Former US President Donald Trump and Ukrainian President Zelenskyy held a tense meeting, leading to a diplomatic rift.
- Trump accused Zelenskyy of disrespecting the Oval Office, stating, “He can come back when he is ready for peace.”
- The minerals deal remained unsigned, and the scheduled press conference was canceled.
- Trump hinted at investigating fraud and waste in Ukraine, signaling a potential shift in US-Ukraine relations.
The fallout caused sharp movements in the euro and pound, as geopolitical risks escalated.
Fed’s Harker Signals Rate Policy Flexibility
Federal Reserve official Patrick Harker suggested that interest rates could move in either direction, depending on economic developments. Key takeaways:
- In December, he was debating between one or two rate cuts in 2025.
- Currently supports a wait-and-see approach due to economic uncertainty.
- Warned that inflation expectations must be carefully managed to avoid long-term instability.
- Emphasized that policy remains restrictive, and shelter inflation must come down before any major rate changes.
OpenAI’s Sam Altman Announces Major GPU Expansion
OpenAI CEO Sam Altman confirmed that the company will add tens of thousands of GPUs next week to support the rollout of GPT-4.5 to the Plus tier. Altman emphasized the need for increased computing power, stating, “We’ve been growing a lot and are out of GPUs.” GPT-4.5 is expected to be OpenAI’s largest and most advanced model to date.
Altman info via Twitter:
Trump Endorses Temporary Government Funding Bill Until September
Former U.S. President Donald Trump publicly endorsed a continuing resolution (CR) to extend government funding until September. In a social media post, he emphasized the urgency of passing the bill, stating, “We are working very hard with the House and Senate to pass a clean, temporary government funding bill to the end of September. Let’s get it done!”
Canada Q4 GDP Surges 2.6% Annualized, Exceeding Forecasts
Canada’s economy showed resilience in Q4 2024, with GDP growing 2.6% (expected 1.8%).
- Monthly GDP: +0.2% m/m (expected +0.3%).
- Household spending and exports were key drivers.
This data suggests stronger-than-expected growth, possibly influenced by US trade trends ahead of potential tariffs.
Canada’s FYTD Budget Deficit at $21.72B, Slightly Improved
Canada’s fiscal year-to-date deficit stands at $21.72B, an improvement from $22.72B a year ago.
- December posted a $1B surplus, contrasting with a $4.71B deficit last year.
- The government’s HST holiday (sales tax relief) is expected to impact upcoming reports.
Commodities News
Gold Drops 3% Weekly as USD Strengthens Amid Recession Fears
- Gold declines 1% Friday, closing at $2,845.
- US Dollar hits 10-day high at 107.66, fueled by trade policy risks.
- Fed expected to cut rates by 70 bps in 2025, with the first cut projected for June.
Gold’s weekly drop of over 3% coincides with the USD’s surge, driven by Trump’s 25% tariffs on Mexico and Canada. Fed officials remain divided on monetary policy, with expectations for interest rate cuts firming up as recession concerns persist.
WTI Crude Oil Retreats from $70 Amid Trump’s Tariff Threats
- WTI crude falls to $69.20, reversing gains from Thursday’s $70 rebound.
- Trump’s new 10% tariff on China heightens global demand concerns.
- Upcoming Trump-Zelenskyy meeting to discuss minerals deal & Ukraine peace prospects.
Oil prices faced renewed selling pressure as Trump vowed to impose additional tariffs targeting China, Mexico, and Canada. Investors are closely watching developments from the US-Ukraine minerals deal meeting, which could shape broader economic and geopolitical dynamics.
Baker Hughes Rig Count: U.S. & Canada See Modest Increases
U.S. Rig Count
- Total rigs: +1 to 593.
- Oil rigs: -2 to 486.
- Gas rigs: +3 to 102.
- Miscellaneous rigs: Unchanged at 5.
- Year-over-year change: Down 36 rigs from 629 (Oil rigs down 20, Gas rigs down 17, Miscellaneous up 1).
- Offshore rigs: Down 1 to 13, marking an 8-rig decline year-over-year.
Canada Rig Count
- Total rigs: +4 to 248.
- Oil rigs: +3 to 177.
- Gas rigs: +1 to 71.
- Miscellaneous rigs: Unchanged at 0.
- Year-over-year change: Up 17 rigs from 231 (Oil rigs up 33, Gas rigs down 16, Miscellaneous unchanged).
Despite small weekly increases, the U.S. rig count remains lower year-over-year, reflecting ongoing adjustments in energy sector activity. Meanwhile, Canada continues to show growth, particularly in oil rigs, signaling a more resilient market north of the border.
Europe News
Germany’s February CPI Holds Steady at 2.3% y/y
Data from Destatis (February 28, 2025):
- CPI: +2.3% y/y (expected +2.3%, prior +2.3%).
- HICP: +2.8% y/y (expected +2.7%, prior +2.8%).
- Monthly CPI: +0.4% m/m (expected +0.4%).
The report aligns with expectations following regional inflation readings.
Germany’s February Unemployment Rises Less Than Expected
Data from the Federal Employment Agency (February 28, 2025) shows that Germany’s unemployment increased by 5,000, significantly below the expected 15,000.
- Unemployment rate remained steady at 6.2%, in line with expectations.
- The labour market remains weak, particularly in the industrial sector.
German Regional CPI Data Suggests Stable Inflation
Regional CPI data for February 2025 from Destatis:
- Bavaria: +2.4% y/y (prior +2.5%).
- Hesse: +2.3% y/y (prior +2.5%).
- Brandenburg: +2.3% y/y (unchanged).
- Saxony: +2.3% y/y (prior +2.4%).
- North Rhine-Westphalia: +1.9% y/y (prior +2.0%).
- Baden-Württemberg: +2.5% y/y (prior +2.3%).
These readings indicate that Germany’s national CPI should come in around 2.2%-2.3%, compared to 2.3% in January.
Germany’s January Retail Sales Show Modest Rebound
Retail sales in Germany grew by 0.2% m/m in January, slightly above the expected 0.0%.
- Food sales rose 1.5%, while non-food retail trade fell 0.2%.
- The improvement follows a -1.6% drop in December, suggesting a moderate recovery after a weak holiday season.
Germany’s January Import Prices Rise More Than Expected
Data from Destatis (February 28, 2025) reveals that Germany’s import price index increased by 1.1% m/m, exceeding the +0.7% expected.
- Even excluding energy prices (+4.1%), import prices still rose 0.8%.
- This marks the fourth consecutive monthly increase, pushing the index to 115.2, well above the 112.5 average in 2024.
France’s Q4 Final GDP Confirms Marginal Contraction
Data from INSEE (February 28, 2025) confirms France’s GDP contracted by -0.1% q/q in Q4 2024, unchanged from preliminary estimates.
- The contraction is largely attributed to inventory adjustments rather than a fundamental economic downturn.
- For 2024, GDP growth stood at 1.1%, matching 2023’s performance.
France’s February CPI Slows Sharply
French CPI data (INSEE – February 28, 2025) shows a significant slowdown in inflation:
- Headline CPI: +0.8% y/y (expected +1.0%, prior +1.7%).
- HICP: +0.9% y/y (expected +1.2%, prior +1.8%).
- The slowdown is largely due to energy price adjustments and service sector inflation falling from 2.5% to 2.1%.
Italy’s February Preliminary CPI Matches Expectations at 1.7%
Latest data from Istat (February 28, 2025) shows:
- Headline CPI: +1.7% y/y, in line with expectations (prior +1.5%).
- HICP: +1.7% y/y, slightly below the expected +1.8% (prior +1.7%).
- Core inflation held steady at 1.8%.
UK February Nationwide House Prices Beat Expectations
Latest data from the Nationwide Building Society (February 28, 2025) shows UK house prices rose by 0.4% m/m, surpassing the expected +0.2% and up from +0.1% in January.
UK Business Confidence Rebounds in February
The Lloyds Bank Business Barometer climbed to 49% in February, up from 37% in January, breaking a seven-month decline. Notable trends:
- Hiring confidence rose by nine points to 41%.
- Economic confidence surged 18 points to 42%, the largest jump since 2020.
- Two-thirds of firms plan to raise prices, potentially influencing the Bank of England’s future rate decisions.
Switzerland’s February KOF Leading Indicator Falls Slightly
Data from KOF (February 28, 2025) shows a drop in the leading indicator index to 101.7, slightly below the expected 102.0. However, an upward revision of the previous month to 103.0 suggests a stable trend in economic momentum.
BOE’s Ramsden: A Careful Approach Needed for Rate Cuts
Bank of England policymaker Dave Ramsden emphasized a gradual and cautious approach to rate cuts but acknowledged potential variations in pace:
- “There may be circumstances when it could be slower than expected, but there will also be times when conditions require the pace of rate cuts to quicken.”
- Risks to achieving 2% inflation are now two-sided, but the disinflationary trend remains intact.
- The labour market outlook is less certain compared to last year.
Asia-Pacific & World News
China’s Politburo Signals More Proactive Macro Policy Measures
China’s Politburo announced plans to implement more aggressive macroeconomic policies via state media:
- Expanding domestic demand.
- Stabilizing the housing and stock markets.
- Mitigating external risks.
- Supporting a sustained economic recovery.
The move suggests that China’s leadership remains committed to economic stabilization amid global uncertainties.
China Banks Reportedly Ordered by PBOC to Cut Dollar Deposit Rates
According to Reuters, citing two banking sources, the People’s Bank of China (PBOC) has instructed banks, regardless of size, to cut dollar deposit rates over the past few weeks. This move aims to discourage dollar holdings and encourage conversions into the yuan.
A banking source stated, “We’ve got the guidance from the superior that we need to lower the dollar deposit rates, and many of our peers have already done so.”
The policy reflects Beijing’s growing concerns over onshore dollar reserves. A potential upside is that Trump’s tariffs on China have been less severe than anticipated, supporting yuan consolidation since late January.
China Expected to Expand Municipal Special Debt Quotas at NPC Meeting
China’s National People’s Congress (NPC) next week is expected to approve a higher municipal special debt quota:
- Goldman Sachs projects an increase to 4.7 trillion yuan (from 3.9 trillion yuan in 2024).
- UBS estimates a slightly lower 4.5 trillion yuan.
The increased quota aims to boost local government spending and infrastructure investment while maintaining an employment target of ~5%.
China’s February PMI Data to be Released This Weekend
China’s National Bureau of Statistics (NBS) is set to publish February PMI data over the weekend, with expectations of improvement in both manufacturing and service sectors.
- Manufacturing PMI: Forecasts indicate a return to expansion territory after January’s decline to 49.1.
- Non-Manufacturing PMI: January recorded a drop to 50.2 from 52.2 in December, reflecting a slowdown in services and construction growth.
The upcoming data will provide insights into China’s economic recovery momentum, especially post-Lunar New Year disruptions.
UK Energy Secretary to Visit China for Energy Cooperation Talks
UK Energy Secretary Ed Miliband is set to visit China from March 17 to 19 to revive UK-China Energy Dialogue discussions. The visit will focus on strengthening energy cooperation, attracting Chinese investors, and fostering bilateral agreements in the energy sector. The talks are expected to address renewable energy partnerships and technological collaboration.
info via Reuters.
PBOC sets USD/ CNY reference rate for today at 7.1738 (vs. estimate at 7.2873)
- PBOC CNY reference rate setting for the trading session ahead.
PBOC injects 284.5bn yuan via 7-day RR, sets rate at 1.5%
- 182.5bn yuan mature today
- net injection is 102bn yuan
Australia’s Private Sector Credit Growth Slows in January
Australia’s private sector credit rose 0.5% m/m in January, slightly below the previous month’s 0.6%, according to data from the Reserve Bank of Australia. However, year-on-year credit growth remained strong, signaling continued economic expansion.
New Zealand’s ANZ-Roy Morgan Consumer Confidence Rises to 96.6 in February
New Zealand’s ANZ-Roy Morgan Consumer Confidence index edged up to 96.6 in February from 96.0 in January. Key highlights:
- The proportion of households viewing it as a good time to buy major household items improved slightly to -15.
- Inflation expectations remained steady at 4.0%, indicating stability in price outlook.
Tokyo’s February Inflation Slows to 2.9% y/y
Tokyo’s headline CPI for February came in at +2.9% y/y, below the expected 3.2% and down from +3.4% in January. Core CPI (excl. fresh food) slowed to 2.2% (expected 2.3%, prior 2.5%), while CPI excluding food and energy remained stable at 1.9%.
Japan’s January Industrial Output Declines 1.1% m/m
Japan’s preliminary industrial output for January fell by 1.1% month-on-month, slightly better than the expected -1.2%. Year-on-year, output increased by 2.6% (expected -1.2%, prior +1.6%). Manufacturer forecasts for February indicate a strong rebound (+5.0%), followed by a potential contraction in March (-2.0%).
Japan’s January Retail Sales Increase 3.9% y/y
Retail sales in Japan rose 3.9% year-on-year in January, just shy of the expected +4.0% but higher than December’s +3.5%, reflecting resilient consumer demand despite economic headwinds.
Japan Housing Starts Decline in January
Japan’s housing starts for January 2025 recorded a year-on-year decline of 4.6%, falling short of the expected -2.6% and worsening from December’s -2.5%. The data reflects ongoing challenges in Japan’s real estate sector amid broader economic uncertainties.
Japan’s January Industrial Output Declines 1.1% m/m
Japan’s preliminary industrial output for January fell by 1.1% month-on-month, slightly better than the expected -1.2%. Year-on-year, output increased by 2.6% (expected -1.2%, prior +1.6%). Manufacturer forecasts for February indicate a strong rebound (+5.0%), followed by a potential contraction in March (-2.0%).
Japan Revises FY25/26 Budget, Cuts Government Bond Issuance
Prime Minister Ishiba’s administration has adjusted its FY25/26 budget plan, reducing it to JPY 115.2 trillion. The revised budget also includes a cut in new government bond issuance to 28.6 trillion yen. Additionally, the government plans to introduce higher household subsidies to support free school education and raise the threshold for tax-free income, leading to a tax revenue shortfall of 621 billion yen. The shortfall will be compensated through reserve funds and unutilized financial resources.
Bank of Japan Deputy Governor Uchida Affirms JGB Purchase Tapering
BoJ Deputy Governor Uchida reaffirmed the central bank’s stance on tapering Japanese Government Bond (JGB) purchases, despite fluctuations in yield levels. Key takeaways from his statement:
- BoJ will not comment on daily JGB yield movements.
- No change in short-term policy rate or JGB tapering strategy.
- Japan’s economy remains in a moderate recovery, though some weaknesses persist.
- Inflation continues to gradually approach the 2% target.
Crypto Market Pulse
Ethereum Faces Heavy Selling Pressure as Whales and Retailers Exit
- Ethereum price: $2,200.
- Exchange reserves increased by 500K ETH in the past week.
- Whales offloaded over 620K ETH in five days.
- Key support at $2,200 under threat, with potential downside to $1,500.
Ethereum’s long-term holders (LTHs) and whales have joined retailers in selling, contributing to a sustained bearish trend. Dormant circulation and mean coin age indicators confirm this shift, suggesting large-scale portfolio adjustments.
Meanwhile, the Ethereum Foundation (EF) launched the Silviculture Society, an initiative aimed at incorporating core community voices into strategic decision-making.
Dogecoin Drops Below $0.19 as Retail Traders Panic
- DOGE plummets 12.4%, reaching its lowest level since Trump’s re-election.
- Retail traders offloading holdings, as daily active addresses surge above 88,000.
- Elon Musk’s government role sparks uncertainty.
Dogecoin’s post-election surge has collapsed, mirroring a broader crypto market downturn. Increased tariffs from Trump on Mexico and Canada (25%) have intensified market fears, accelerating the sell-off. With technical indicators in oversold territory, DOGE remains under bearish pressure, needing institutional support for recovery.
Bitcoin Breaks Key Support Level, Falls Below $80,000
Bitcoin has dropped over 27% from its January highs, now breaking below the 200-day moving average. Key technical developments:
- Price fell under $80,000, erasing half of its advance since October.
- The 50.0% Fibonacci retracement level ($79,204) might offer temporary support, but a further decline toward $70,000 is possible.
- Selling pressure has intensified due to Ethereum’s recent struggles, particularly linked to the ByBit hacking fallout.
While history suggests Bitcoin has rebounded from similar pullbacks, traders are advised to monitor broader market sentiment.
The Day’s Takeaway
Day’s Takeaway: Key Market Trends & Developments
United States: Economic & Market Insights
- US PCE Inflation: Core +2.6% y/y (expected), with personal spending falling -0.2%.
- Trade Deficit Hits Record -$153.26B: Imports surge amid Trump’s tariff policies.
- Atlanta Fed GDPNow Plunges to -1.5%: A sharp decline from +2.3%, signaling economic contraction.
- Stock Market Recovers But Ends Week Lower:
- Dow Jones: +600 pts to 43,839.99 (weekly +0.95%).
- S&P 500: +92 pts to 5,954.39 (weekly -0.98%).
- Nasdaq: +302 pts to 18,847.28 (weekly -3.47%).
- Russell 2000: +23 pts to 2,163.06 (weekly -1.47%).
Commodities: Oil, Gold & Energy Markets
- WTI Crude Falls to $69.20: Trump’s new 10% tariff on China raises demand concerns.
- Gold Down 3% Weekly to $2,845: Strengthening USD fuels sell-off; Fed expected to cut rates by 70bps in 2025.
- Baker Hughes Rig Count:
- US Rigs: +1 to 593 (Oil -2, Gas +3).
- Canada Rigs: +4 to 248 (Oil +3, Gas +1).
Europe: Economic Stability & Inflation Trends
- Germany’s February CPI +2.3% y/y: In line with forecasts, signaling steady inflation.
- France’s GDP Contracts -0.1% in Q4: Inventory shifts drive marginal economic downturn.
- UK House Prices +0.4% m/m: Nationwide reports continued modest price growth.
- BOE Ramsden Cautions on Rate Cuts: Inflation risks are now two-sided, requiring careful policy adjustments.
Rest of the World: China, Crypto & Geopolitics
- China’s PBOC Orders Dollar Deposit Rate Cuts: Aimed at supporting the yuan and discouraging dollar holdings.
- Ethereum Down to $2,200 Amid Sell-Off: Whales & long-term holders liquidate holdings, raising bearish risks.
- Dogecoin Drops Below $0.19: Retail panic selling drives a 12.4% decline, amplified by Trump tariffs & Musk controversies.
- Trump-Zelenskyy Meeting Ends in Tension: Failure to secure a minerals deal fuels geopolitical uncertainty.
Final Thoughts
Markets are navigating a complex mix of economic data, geopolitical risks, and central bank policy shifts. The US trade deficit surge, Fed’s rate path, and China’s currency policies remain key themes shaping investor sentiment going forward. Meanwhile, crypto markets face sustained pressure, and commodities remain volatile amid geopolitical developments and trade policy shifts.
