📆 Friday, March 28
► European markets are trading mixed on Friday as investors digest fresh inflation data and rising trade tensions. The Stoxx 600 is down about 0.25% currently, extending its weekly decline after earlier steep losses, though auto stocks rebounded modestly following Thursday’s sharp selloff. France’s CAC 40 dropped more than 0.4%, Germany’s DAX declined again strong at -0.6%, while the UK’s FTSE 100 trades little changed for the day benefiting from upbeat retail sales data. Inflation prints from France (0.9%) and Spain (2.2%) came in below expectations, reinforcing bets on ECB rate cuts. Markets are now pricing in 60 basis points of easing this year. Regional bond yields moved lower, and ECB Vice President de Guindos confirmed that the disinflation trend remains intact.
► U.S. equities closed lower yesterday after President Trump signed a 25% tariff on auto imports, (to be phased in gradually – or maybe not, because no one can predict what the Trump administration will actually do or implement in the end), reigniting fears of a deepening trade war. The S&P 500 fell 0.2%, while the Nasdaq 100 is currently trading about 0.35% lower, weighed down by extended losses in automakers and chip stocks – both sensitive to concerns about China business. Stronger-than-expected GDP growth (2.4%) and slowing core PCE inflation QoQ (both yesterday; Core inflation QoQ 2.6%) failed to offset trade-driven concerns. Short-dated Treasuries outperformed, with the 10-year yield retreating to 4.27%. Investors now turn their focus to Friday’s PCE inflation report ♦️ (MoM & YoY reading) for further clues on the Fed’s policy path.
► Asian markets ended mixed as investors reacted to the fallout from (potentially) escalating U.S. trade actions. Japan’s Nikkei 225 sank 1.99%, posting its worst daily drop in weeks, led by continued losses in automakers. Toyota, Honda, and Nissan extended declines, with nearly $20 billion in market value erased from Japan’s top three carmakers this week. China’s Shanghai Composite lost 0.67%, though tech and metals stocks helped cushion broader losses. Hong Kong’s Hang Seng Index declined 0.62%, mirroring regional risk-off sentiment.
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