Morning Brew March 28 2025

Good morning,

As Europe switches to daylight savings time on Sunday, Monday US Equities will trade from 5:30 again, FX Option Expiry will be at 16:00 again.

Today we are expecting the US PCE, the favorite inflation measure of the Fed, expected at 2.5 and the core at 2.7%, the interesting question is if traders will care? Susan Collins said tariffs will drive up U.S. inflation but it is unclear how persistent that upward pressure will be.

With “Liberation Day” as Trump calls is coming up, tariffs will be in the center of attention. Also worth noting is that while the tariffs are the short term market mover, the longer term implications of the current US politics are likely to be more important- Mark Carney stated very clearly yesterday that he sees the close ties between the US and Canada at an end due to the unreliability of the US.

The Tariffs on cars rattled automakers across the globe, Tesla was the only large car maker that ended the day in the green, GM lost  7.3%, Ford 3.9%, the German car makers between 2.6% and 1.5% the S&P 500 lost 0.33%, the  Nasdaq 0.53%, the Dow 0.37% and the Dax 0.8%.

Yields were little changed with the US 10 year at 4.33, EU at 2.77 and UK at 4.78, the USD Index is also relatively calm at 104.33. EURUSD is 1.07878, GBPUSD 1.2940 and USDJPY 150.80.

Gold is at absolute record at 3080 and Silver 34.40 – will this strong rise hold into the close or will we see one of those volatile Fridays again?

Headlines:

• Russian President Vladimir Putin suggested Ukraine be placed under a form of temporary administration
• Core inflation in Japan's capital accelerates, stays above BOJ targe
• China's President Xi Jinping met with global CEOs in Beijing
• Robert F. Kennedy Jr. announced cutting 10,000 employees
• JD Vance is visiting Greenland as Vladimir Putin said he would send more troops to the arctic
• The US have halted their fee payments to the WTO acc to Reuters,
• In Germany the coalition talks are entering the final stage, apparently app 500 billion EUR are missing to finalize the planned measures.

Be extremely cautious the next few day, markets seem too complacent for the paradigm shift we are experiencing.

John Hardy commented on EURUSD:

EURUSD set to rally again after fresh Trump tariff barrage?

Friday, March 28

• Germany Unemployment Rate: Labor market health in Europe’s largest economy[5].
• UK GDP
• France Inflation
• Japan Inflation Data: Critical for Bank of Japan policy outlook[7].

Monday, March 31, 2025

• China NBS Manufacturing PMI: Key indicator of factory activity (01:30 AM CST).
• China NBS Non-Manufacturing PMI: Reflects service sector performance (01:30 AM CST).
• US Chicago PMI: Insight into business conditions in the Midwest (01:45 PM ET).
• US Dallas Fed Manufacturing Index: Measures manufacturing activity in Texas (02:30 PM ET).
• Christine Lagarde (ECB President): Speaking at a conference on monetary policy and inflation outlook in Frankfurt (10:00 AM CET).
• Philip R. Lane (ECB Executive Board Member): Remarks on digital euro developments at a university event in Dublin.

   

   Tuesday, April 1, 2025

• Australia Retail Sales (February): A gauge of consumer spending (12:30 AM AEST).
• Eurozone Inflation Rate (March): Preliminary data on price pressures in the EU (11:00 AM CET).
• US ISM Manufacturing PMI: A key indicator of economic health in manufacturing (10:00 AM ET).

   

   Wednesday, April 2, 2025

• Germany Retail Sales (February): Reflects consumer demand trends (08:00 AM CET).
• US ADP Employment Change: A preview of labor market conditions ahead of the NFP report (08:15 AM ET).
• US EIA Crude Oil Stocks Change: Key for energy markets (10:30 AM ET).
• Federal Reserve Chair Jerome Powell: Addressing U.S. economic conditions and monetary policy at the Economic Club of Chicago (12:30 PM ET).

   

   Thursday, April 3, 2025

• Eurozone Unemployment Rate (February): Labor market update for the EU (11:00 AM CET).
• US Initial Jobless Claims: Weekly labor market data (08:30 AM ET).
• US ISM Services PMI: Insights into the service sector's health (10:00 AM ET).
• Andrew Bailey (BoE Governor): Speaking on financial stability and inflation risks at a London forum.

   

  Friday, April 4, 2025

• Germany Industrial Production (February): A measure of industrial activity in Europe’s largest economy (08:00 AM CET).
• US Non-Farm Payrolls & Unemployment Rate (March): The most closely watched labor market report globally (08:30 AM ET).
• Tiff Macklem (BoC Governor): Discussing trade dynamics and monetary policy implications in Toronto.