📆 Friday, March 7
► European markets slip after Wall Street – which had its worst week since September – saw further losses yesterday as uncertainty over Trump's changing trade policy dampened risk appetite. The Stoxx 600 slid 0.7%, while the German DAX fell more than 1.7%, giving up the gains from its recent rally fueled by historic plans for defense spending (CAC 40 -0.9%). Luxury stocks led the losses after China imposed retaliatory tariffs on US and also European (!) goods, raising concerns about export demand. Meanwhile, the ECB cut interest rates by 25 basis points to 2.50%, but signaled a cautious stance on further cuts, citing persistent inflation risks. As a result, German Bund yields remained under pressure (-5 basis points at 2.83%). Economic data remained weak, with France's trade deficit persisting at -€5.6 billion and Spain's industrial production falling by 1% year-on-year, highlighting weak consumer demand and problems in the manufacturing sector.
► US markets remained choppy, with S&P 500 futures fluctuating ahead of February’s nonfarm payrolls report, a key gauge of labor market strength and potential Fed policy shifts. Investors remained on edge as Trump’s inconsistent trade policies created further uncertainty—25% tariffs on Mexico and Canada were imposed and then quickly suspended, while broader reciprocal tariffs remain in limbo. This drove US Treasury yields lower to 4.26%, reflecting fears that trade instability could hinder economic growth. Tech stocks were highly volatile, with Broadcom surging 11% in pre-market trading after posting strong earnings ($11.96B revenue, +34% YoY), an optimistic forecast and announcing a 10-for-1 stock split. Broadcom was one the strongest sold stocks in New York – we went the opposite direction – congratulations to the community! Broadcom's strong earnings report boosts the recently underperforming US chip sector. Investors are watching Fed Chair Jerome Powell’s speech later today for signals on how the Fed may navigate trade disruptions and broader economic uncertainty.
► Asian markets saw extended losses as trade war fears and weak economic data weighed on sentiment. Japan’s Nikkei plunged 2.26%, nearing a five-month low, while Hong Kong’s Hang Seng slid 0.57%, snapping a three-day winning streak. Speculation over a Bank of Japan rate hike intensified, pushing the JPY to 148/USD, a five-month high, as the government prepared to declare the official end of long-term deflation. Meanwhile, China’s trade surplus rose to $170.5B, exceeding expectations, but exports grew only 2.3% (vs. 5% expected) while imports slumped 8.4%, signaling weakening domestic demand. Tensions escalated as China took a hardline stance on trade, dismissing US tariff measures on fentanyl-related products. In Australia, the ASX 200 tumbled 1.81%, hitting a six-month low, dragged down by sharp declines in banking and commodity stocks. The AUD weakened toward $0.63, pressured by deteriorating market sentiment and falling demand for industrial commodities.
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