TOP 5 Market Highlights: Global Economic Trends & Trade Impact
3/3/2025 – US Manufacturing Stays Afloat, but Tariff Pressures Loom Large
Wall Street and the TSX saw their biggest drops in months after the U.S. confirmed 25% tariffs on Canada and Mexico. Emerging market currencies weakened, while the Euro and gold gained on economic concerns. European and Asian markets braced for volatility.
U.S. manufacturing showed strain as the ISM index fell to 50.3. Canada’s PMI dropped to 47.8, signaling factory sector weakness. Trump’s tariffs triggered backlash from Canada and Mexico, while U.S.-Ukraine tensions deepened, adding to market uncertainty.
The Euro rose on manufacturing recovery, while gold surged on inflation fears, and oil fell 2% on increased OPEC+ output.
Crypto markets spiked on Trump’s proposals before cooling and European defense stocks surged on military spending news.
4/3/2025 – Global Markets Roiled as Trade Tensions Surge: Nasdaq Corrects, Oil Prices Tumble
Markets reacted to escalating trade tensions, with the Nasdaq entering correction territory. Eurozone bond yields fell as Germany reformed its debt brake, signaling fiscal expansion. Oil declined due to OPEC+ output hikes, while the US dollar weakened and the euro hit a three-month high. Gold surged on trade war fears, while oil fell on oversupply concerns.
The US labor market stabilized, but inflation risks loomed. Canada, Mexico, and China retaliated against US tariffs, fueling economic and geopolitical uncertainty. Ukraine raised concerns over paused US military aid, while the Arab Summit backed Gaza reconstruction.
France aimed to replace US arms deliveries to Ukraine. China suspended US lumber and soybean imports, escalating tensions. Morgan Stanley predicted another ECB rate cut after April.
5/3/2025 – Weaker Dollar Lifts Gold Prices as Trade Uncertainty Persists, Oil Slumps on Surging U.S. Inventories
U.S. tariffs on Canada, China, and Mexico fueled volatility, weakening the dollar while the Euro hit a four-month high. Auto stocks rose on temporary tariff exemptions, but oil prices dropped due to rising U.S. crude inventories and OPEC+ output hikes.
The Fed’s Beige Book noted price hikes ahead of tariffs. South Korea’s forex reserves fell, and Germany prepared for fiscal stimulus. U.S.-Canada trade tensions escalated at the WTO, while Ukraine sought U.S. partnerships on minerals.
Gold surged amid trade uncertainties, while oil fell over supply concerns.
6/3/2025 – ECB Cuts Rates, Lowers Growth Forecast as Trade War Fears Linger
The Nasdaq entered correction territory amid U.S. trade policy uncertainty. Canadian stocks fell 1.2%, while the Mexican peso gained on tariff exemptions. European markets held steady, with the euro hitting a four-month high. U.S. 10-year Treasury yields rose to 4.294%.
The ECB cut rates and lowered its 2025 growth forecast to 0.9%. Canada’s trade surplus hit a 32-month high, while U.S. jobless claims fell. Canada delayed new tariffs but vowed a firm response, and the U.S. exited a climate pact. EU leaders struggled to agree on Ukraine aid.
Gold dipped as Treasury yields rose, while the euro climbed to $1.0854. Oil stayed below $70 per barrel due to oversupply concerns.
The FTC challenged a medical deal, the IMF urged Japan to raise rates, and Mexico’s president welcomed better U.S. trade relations.
7/3/2025 – U.S. Job Growth Slows, Inflation Concerns Persist
Wall Street closed higher but ended the week with losses. Emerging market currencies fell on tariff uncertainty, while Europe’s STOXX 600 snapped a 10-week winning streak. U.S. 10-year yields rose after Fed comments on rate policy.
The U.S. added 151,000 jobs in February, with unemployment rising to 4.1%. Canada’s stagnant job market fueled recession fears, while China’s trade data signaled weakening demand. Trump announced new Iran sanctions, and U.S.-Russia tensions persisted over Ukraine.
Gold gained on weak job data, while the dollar hit a five-month low against the yen. Copper fell on weak Chinese demand.
Brazil cut food import tariffs to curb inflation, and Canada pledged C$6 billion to offset U.S. tariff impacts on exports.
What to be on the lookout for next week?
GDP (JP)
Japan’s Gross Domestic Product (GDP), released quarterly by the Cabinet Office, measures economic activity. A high GDP reading is bullish for the Japanese Yen (JPY), while a low reading is bearish.
This report is key to assessing Japan’s growth trends and can influence monetary policy and interest rate decisions.
The upcoming March 11, 2025, GDP release (forecast: 0.7%, previous: 0.7%) signals stable growth. Any deviation could impact investor sentiment and policy expectations in forex, equities, and gold markets.
A steady 0.7% GDP growth supports current policies. A lower reading may signal an economic slowdown, yen depreciation, and potential Bank of Japan easing measures.
CPI M.o.M & Y.o.Y (US)
The Consumer Price Index (CPI) measures inflation by tracking the price changes of a basket of goods and services, excluding food and energy in some cases for clearer trends. CPI data, released monthly by the U.S. Department of Labor Statistics, is crucial for assessing inflation and shaping monetary policy. A high CPI generally strengthens the USD, while a low reading can weaken it.
The U.S. Federal Reserve aims to keep inflation around 2% to maintain price stability and employment. With inflation elevated due to supply-chain issues, the Fed has been taking aggressive measures, which will be influenced by CPI trends.
The upcoming CPI report, with a forecasted decline from 3% to 2.9% YoY, signals potential easing inflation. If inflation is higher or lower than expected, it could shift Fed policy, impacting market sentiment in currencies, equities, and gold.
Markets expect modest inflation easing, which could support equities and a stable Fed outlook. However, significant deviations from expectations could lead to aggressive Fed actions, either tightening or easing policy, with consequences for borrowing costs and economic growth.
Core CPI M.o.M & Y.o.Y (US)
The Consumer Price Index (CPI) measures inflation by tracking price changes in a basket of goods and services. The CPI Ex Food & Energy excludes volatile components like food and energy for a clearer view of price pressures. A high CPI is bullish for the USD, while a low reading is bearish.
The CPI is key for the Fed’s inflation control and interest rate decisions. With inflation running high, the Fed has acted aggressively to curb it.
The upcoming CPI report, with a forecasted drop from 3.3% to 3.2% Y.o.Y, will be crucial for assessing inflation trends and potential Fed policy shifts.
Markets expect slight easing in inflation. A higher-than-expected CPI could trigger hawkish Fed action, while a lower reading might fuel optimism about rate cuts.
Interest Rates (CAD)
The Bank of Canada (BoC) announces interest rate decisions eight times a year, with this round on 12/3/2025, adjusting rates to manage inflation. A rate hike is bullish for the CAD, while a cut is bearish.
This decision influences monetary policy, inflation control, and market sentiment regarding Canada’s economic stability.
With a forecasted rate drop from 3% to 2.75%, markets anticipate easing measures to support growth. A lower rate could boost the CAD but may signal economic concerns.
A smaller-than-expected cut could strengthen the CAD and increase market volatility. Unexpected economic data may also shift policy expectations.
PPI (US)
The Producer Price Index (PPI) ex Food & Energy, released by the Bureau of Labor Statistics on 13/3/2025, measures price changes in the U.S. excluding volatile food and energy. A high reading is bullish for the USD, while a low reading is bearish.
The PPI ex Food & Energy reflects inflation trends and helps guide Federal Reserve decisions on monetary policy.
The PPI influences expectations for inflation and interest rates. If inflation remains high, the Fed may raise rates, strengthening the USD and adding volatility to markets.
A high reading may prompt a hawkish Fed stance, while a lower-than-expected PPI could support risk assets and boost consumer confidence, impacting market stability.
Q&A Section:
Q1: What caused the volatility in global markets this week?
A1: The surge in trade tensions, particularly with U.S. tariffs on Canada, Mexico, and China, triggered significant volatility. The Nasdaq entered correction territory, oil prices dropped, and emerging market currencies weakened. Additionally, the U.S.-Ukraine tensions and retaliations from Canada and Mexico added to the uncertainty, with gold surging on inflation fears and the Euro gaining strength.
Q2: How did the ECB’s actions impact European markets?
A2: The ECB’s rate cut and lowered growth forecast sent ripples through European markets. While the euro hit a four-month high, stocks were mixed, with some sectors like defense seeing a boost. The ECB’s actions signal ongoing
