Market Highlight: Central Bank Moves, Inflation Signals & Global Market Trends
17/3/2025 – Fed Nomination Signals Stability, While Europe Strengthens Fiscal Roadmap
Markets stay stable amid geopolitical and economic shifts. Bowman’s nomination as Fed Vice Chair signals steady U.S. monetary tightening, aiding bond and dollar stability. Germany’s upheld borrowing plans bolster Eurozone recovery, lifting the euro and European equities.
U.S.-Iran tensions rise as a U.S. drone retreats from Iranian jets, risking oil market disruptions. Trudeau’s Europe diplomacy strengthens Western alliances, impacting energy and trade.
18/3/2025 – Japan Holds Rates Steady as Geopolitical Tensions Simmer
Global markets remain stable despite geopolitical and economic shifts. Bowman’s nomination as Vice Chair for Supervision hints at steady U.S. monetary policy, supporting bond markets and the dollar. In Europe, Germany’s upheld borrowing plans bolster fiscal confidence, potentially lifting the euro and European equities.
U.S.-Iran tensions rose after a U.S. spy drone retreated from Iranian jets, risking oil market volatility. Trudeau’s European diplomacy underscores Western alliance-building, possibly affecting energy and trade, while Bowman’s nomination and Germany’s fiscal clarity may stabilize the dollar and euro.
19/3/2025 – Ukraine’s Zelenskiy Eyes Western Support as Ceasefire Talks Stall
Global markets face mixed central bank signals: Brazil’s 100 bps rate hike to 14.25% tackles inflation, while the Fed holds steady amid uncertainty, while the USD stays flat.
Ukraine’s stalled ceasefire talks and outreach in France highlight geopolitical risks affecting energy and sentiment, while gold stabilized amid rate expectations. Energy sector talks focus on deregulation to boost supply and curb inflation. The Fed’s cautious tapering reflects a balancing act for stability and inflation control.
20/3/2025 – Regulatory Testimonies in US Hint at Financial Sector Shifts
Global markets eye geopolitical risks and fiscal shifts. NATO’s pivot may boost European defense stocks, while Trump’s mineral policy could lift U.S. mining equities.
New Zealand’s trade surplus hit NZ$+510M, but a NZ$-6.51B deficit lingers
South Korea’s PPI eased to +1.5% YoY. NATO’s moves and North Korea’s missile test stir instability, impacting markets.
New Zealand’s NZ$+6.74B exports support the Kiwi. U.S. regulator testimonies could sway banking sentiment. Brazil’s 2025 budget targets a bigger surplus, aiding debt and emerging market appeal.
21/3/2025 – Dow Slump Signals U.S. Market Shifts
The Dow Transports index slump hints at US stock market instability as investors favor stable stocks amid uncertainty.
Chile’s central bank holds rates at 5.0% due to inflation risks despite positive data. Mozambique’s fiscal position weakens with rising spending, while Albania’s ‘BB’ upgrade reflects better debt management. S&P stresses prudent fiscal policies for stability in the global south.
Kim Jong Un deepens North Korea-Russia ties, discussing security and sovereignty support, raising tensions with potential energy and defense market impacts, while geopolitical unrest may drive investors to gold.
A U.S. court names Red Tree Investments the ‘stalking horse bidder’ for CITGO’s parent, signaling active restructuring and contrarian funds targeting undervalued assets
What to be on the lookout for next week?
24/3/2025 – HCOB Composite, Manufacturing, Services PMI (EU)
The Composite, Manufacturing, and Services PMIs, released monthly by S&P Global and HCOB, are key indicators of Eurozone private-sector activity, derived from executive surveys.
Ranging from 0-100, above 50 signals expansion (bullish for EUR), below 50 indicates contraction (bearish for EUR).
The Composite PMI (last: 50.2) reflects overall stability, while Manufacturing PMI (last: 47.6, forecast: 48) suggests ongoing challenges with slight improvement expected, and Services PMI (last: 50.6, forecast: 51) hints at modest growth.
These indices shape EMU economic sentiment and ECB policy, with markets anticipating cautious stability. Risks include economic shocks, geopolitical tensions, or inflation pressures, which could drive volatility if readings deviate significantly.
24/3/2025 – S&P Global/CIPS Composite, Manufacturing, and Services PMIs (UK)
The S&P Global/CIPS Composite, Manufacturing, and Services PMIs, released monthly, track UK private-sector activity via executive surveys. Ranging from 0-100, above 50 signals expansion (bullish for GBP), below 50 indicates contraction (bearish for GBP).
The Composite PMI reflects overall economic health, Manufacturing PMI (still below 50) suggests ongoing contraction with slight improvement expected, and Services PMI anticipates modest growth.
These indices guide UK monetary policy and market sentiment amid recovery challenges. Markets expect cautious stability, but risks include weaker-than-anticipated readings sparking economic concerns or stronger outcomes shifting Bank of England policy, potentially driving GBP and equity volatility.
24/3/2025 – S&P Global/CIPS Composite, Manufacturing, and Services PMIs (US)
The S&P Global Manufacturing and Services PMIs, released monthly, gauge U.S. private-sector activity via executive surveys. Ranging from 0-100, above 50 signals expansion (bullish for USD), below 50 indicates contraction (bearish for USD). Manufacturing PMI (last: 52.7, forecast: 51.9) may reflect a slowdown, while Services PMI (last: 51, forecast: 51.2) suggests slight growth.
Both are key for assessing economic health, influencing Federal Reserve policy on growth and inflation.
Markets anticipate cautious stability, but a sharper PMI drop could spark recession fears, while stronger readings might shift rate expectations, impacting USD and equities.
These metrics guide Bank of Japan policy, with sustained inflation near or above 2% potentially signaling tighter measures.
Markets expect stable inflation, but risks like commodity price shocks or consumer shifts could spark volatility in JPY, equities, and policy outlooks.
28/3/2025 – GDP & Retail Sales (UK)
The UK GDP (QoQ: 0.1%, YoY: 1.4%) and Retail Sales (MoM: last 1.7%, forecast -0.3%), released by the Office for National Statistics, measure economic activity and consumer spending.
GDP reflects total output, with steady QoQ and YoY growth signaling stability, while a sharp Retail Sales drop suggests weakening demand.
High readings boost the Pound Sterling (GBP), low ones weigh it down. These metrics guide Bank of England policy and market sentiment.
Markets expect stagnation, but risks include weaker GDP or sales sparking recession fears, or stronger data shifting rate expectations, impacting GBP and equities.
28/3/2025 – Core PCE Price Index
The Core PCE Price Index, released monthly by the US Bureau of Economic Analysis, tracks consumer price changes, serving as the Federal Reserve’s key inflation gauge.
The MoM (forecast: 0.3%) and YoY (last: 2.6%) readings, excluding volatile food and energy, signal inflation trends—high readings boost the US Dollar (USD), low ones weaken it. Stable at 0.3% MoM and 2.6% YoY, it suggests moderate inflation, supporting steady Fed policy.
Markets expect consistency, but risks include unexpected spikes prompting tighter policy or softer data easing rates, impacting USD, equities, and gold.
Q&A Section
What could a sharp decline in the UK Retail Sales (MoM) forecast for March 28, 2025, indicate, and how might it influence broader economic and market dynamics?
UK Retail Sales (MoM) for March 28, 2025, forecasts a drop from 1.7% to -0.3%, hinting at weaker consumer demand amid inflation and stagnant GDP (QoQ: 0.1%, YoY: 1.4%). This could spark recession fears, pushing the Bank of England toward looser policy, weakening GBP, and boosting gold demand. A surprise uptick could lift GBP and equities, signaling consumer resilience.
What key event on March 17, 2025, signaled potential stability for the U.S. dollar, and what broader implications might it have for monetary policy and global markets?
On March 17, 2025, Bowman’s nomination as Fed Vice Chair for Supervision signaled U.S. dollar stability, suggesting steady monetary tightening. This boosts bond markets and USD value, countering geopolitical risks like U.S.-Iran tensions. Globally, it may stabilize markets alongside Europe’s fiscal gains, but escalating shocks could pressure the Fed, affecting the dollar and risk assets.
