Highlights
Trade policy uncertainty remained the focal theme for a week that saw the major U.S. stock indices, the S&P 500 and the Nasdaq, fall into negative territory on a year-to-date basis for the first time this year. Tuesday marked the deadline for President Donald Trump’s previously announced tariffs of 25% on Canadian and Mexican imports along with an additional 10% on Chinese imports. However, The Trump administration announced a slew of exemptions and delays for the tariffs later in the week. European markets fared a lot better than the U.S., supported by plans by European leaders to jointly borrow EUR 150Billion to spend on their militaries and Germany announcing plans to exempt defence spending above 1% of GDP from the constitutional borrowing limit while unveiling an off-balance sheet EUR 500Billion infrastructure fund.
Data highlights:
The U.S. Manufacturing PMI for February 2025 decreased to 50.3, down from 50.9 in January. Canada’s unemployment rate held steady at 6.6% in February while the U.S. non-farm payroll report showed an increase of 151k in February, falling slightly short of analysts’ expectations of 160k. Unemployment rate in the Eurozone remained unchanged at 6.2% in January coming in lower than expectations of 6.3% from the analysts. Meanwhile, the European Central Bank cut the main financing rate & the deposit rate by 25 basis points to 2.65 percent and 2.5% respectively. The GDP for Australia in the fourth quarter grew to 0.6% surpassing expectations of 0.5% and previous quarter GDP growth of 0.3%. Finally, Eurozone GDP grew by some 1.2%, higher than the 0.9% the analysts had pencilled in.
Week ahead:
Japan GDP Growth – Tuesday | U.S Consumer Price Index (CPI), Canada BoC Interest Rate Decision – Wednesday | U.S. Producer Price Index (PPI) – Thursday | U.K GDP Growth Rate & Goods Trade Balance – Friday
