📆 Friday, February 28
► European markets fell sharply in the last session and during Asian/European trading when Trump confirmed new tariffs on China (+10%), Canada/Mexico (+25%) starting March 4. The Stoxx 600 saw smaller losses and is currently down 0.3%, with auto, mining and tech stocks leading the declines. The German DAX (-0.45%) and French CAC 40 (-0.4%) recovered slightly from steeper earlier losses but remain in negative territory. French inflation hit a four-year low of 0.8%, fuelling expectations of an interest rate cut by the ECB. Italian inflation was in line at 1.7% YoY. European auto stocks remain under pressure as they are affected by US tariff threats. Allianz (-0.8%) fell after the earnings while BASF (1.2%) rose on a higher net profit after an initial fall. European bonds gained with the 10-year German Bund yield falling to 2.38% as markets braced for a potential economic slowdown. European markets may be positively influenced by signs of progress in the peace talks, as Ukrainian President Zelensky visits U.S. President Trump in Washington today, where he is expected to sign the minerals deal, which basically sells half of the revenues from the country's natural resources to the U.S. Nevertheless, the agreement could be received positively and Trump could use this opportunity to “sell” progress, according to Robert Lindner, chief analyst at SmartTrader.
► US stock futures saw slight gains (-1.1% for the S&P 500, wiping out the gains from 2025) after the sharp sell-off on Thursday, as investors braced themselves for the PCE inflation report – the Fed's preferred inflation indicator. The S&P 500 (+0.2%) and Nasdaq (+0.3%) are showing signs of stabilizing after yesterday's sell-off. Treasury yields fell, with the 10-year falling to 4.25% (-4 basis points), as investors reassessed the impact of Trump's protectionist policies on economic growth. AI stocks remain volatile, with Nvidia (+0.5%) slightly up after a mixed earnings report and yesterday's crash, and the important Nasdaq 100 stock Apple (+0.3%)is currently trading slightly higher. Consumer sentiment weakened as pending home sales in the US fell by 4.6%, raising growth concerns.
► Asian markets plunged, reflecting Wall Street's losses and escalating trade war fears. Japan's Nikkei (-2.9%) hit a five-month low despite retail sales rising at the fastest rate in 11 months. China's Shanghai Composite (-1.98%) and Shenzhen (-2.89%) fell as Trump's new China tariffs added to CNY weakness (7.29/USD). Hong Kong's Hang Seng (-3.28%) plunged, led by a 5% drop in tech stocks. India's Sensex (-1.43%) hit its lowest level since June 2024, while Australia's ASX 200 (-1.16%) slid to a two-month low as weak personal loan growth heightened expectations of an interest rate cut.
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