📆 Thursday, March 13
► European markets edged lower on Thursday, with investors grappling with rising trade tensions and economic data releases across the region. The European Stoxx 600 traded near flat as uncertainty surrounding the U.S. President Donald Trump’s escalating tariff war dampened investor sentiment. Germany’s DAX and France’s CAC 40 declined, with automobile stocks under pressure as Trump signaled additional tariffs on EU goods. The European automotive sector slid over 1%, as new trade barriers could further disrupt supply chains and weigh on profitability. European banks also struggled, with the banking sector index down 0.7%, as worries about weaker economic growth outweighed the potential benefits of softer U.S. inflation data. Germany is set to debate a €500 billion ($543 billion) infrastructure and defense fund, which could help stimulate growth and modernize its economy. In the bond market, yields remained mostly stable, with Germany’s 10-year yield rising slightly to 2.89%, while U.K. government bond yields hovered at 4.73%. The fact that Russia rejects Washington's path to peace, including the 30-day ceasefire, is also weighing on sentiment.
► U.S. equity futures dropped as concerns over a possible government shutdown added to investor uncertainty. The shutdown risk comes amid an already fragile economic backdrop, with rising unemployment, job cuts in the federal workforce, and Trump’s escalating trade war with China, Canada, and the EU. Investors are also awaiting key U.S. economic data later today, including wholesale inflation (PPI) and initial jobless claims, which could provide further insight into the economy’s health. S&P 500 futures declined 0.4%, Nasdaq 100 futures fell 0.6%, erasing Wednesday’s gains that were fueled by a softer-than-expected inflation report. The USD remained steady, while treasury yields stabilized as traders braced for upcoming economic data, including wholesale inflation (PPI) and jobless claims reports. Market volatility remains, with some strategists warn that a growth slowdown could outweigh the benefits of easing inflation, JPMorgan suggests that credit markets indicate a lower risk of recession.
► Asian markets mirrored global sentiment, with relief over cooling U.S. inflation offset by renewed trade war concerns. Japan’s Nikkei 225 remained unchanged, while the JPY strengthened after Bank of Japan Governor Ueda signaled confidence in real wage growth and consumer spending. On the other hand, China’s Shanghai Composite (-0.39%) and Shenzhen Component (-0.99%) fell for the second consecutive session as investors questioned the government’s ability to meet economic targets. Hong Kong’s Hang Seng Index (-0.58%) extended losses amid weakness in tech and consumer stocks.
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