Morning Brew March 31 2025

Good morning,

The sour mood among stock traders worsened on Friday and remains low - unless we see a massively positive shift, this quarter will not be a good one for US Indexes.

Spark for the bad mood was an ugly combination from the University of Michigan: The Inflation expectation soared to the highest this century while Consumer sentiment declined substantially, fears of an escalating trade war is adding further fuel

The S&P is down more than 5% year to date, the Dow -2.6, Nasdaq 100 -almost 9%, the magnificent 7 are all negative with Meta the strongest at -1.5%, Tesla the worst at nearly -35%

In contrast, the Dax and the SMI are more than 10% in the green, Rheinmetall is up more than 110% this year – what a rotation.

The USD Index shed nearly 5% with EURUSD up 4.6%, Cable +3.4%, and USDJPY 4.7% lower.

Gold and Silver are huge winners of the insecurity brought by team Trump up around 18%.

This morning, the Nikkei is trading 3.5% lower and index futures for the US and Europe point lower as well.

Yields are falling globally, US 10 Years to 4.20, EU to 2.72 and UK 4.70 all down app 10 basis points. The USD index is trading at 103.852 with EURUSD at 1.0835, GBPUSD 148.98, GBPUSD 1.2956.

Gold is at new all-time highs above 3100 and Silver 34.30. The Reddit-Silver squeeze group became active again and will try to put shorts under pressure today, that could cause some additional volatility.

Bitcoin is at 82100 and Ethereum 1800.

I expect the week to be a volatile one:

• Tariffs will likely take effect April 2^nd, news on who will be affected to which degree will be key, expect a lot of last minute adjustments comments and uncertainty. Jacob wrotea great summary on the tariffs and how to navigate the matter: Trump’s “Liberation Day” tariffs: how investors can navigate the storm ahead
• Key Data with international PMI and US Jobs-Data the likely highlights but I expect all backward-looking data to take the backseat behind tariffs and looming changes.
• Middle East the largest demonstrations Turkey has seen in more than a decade.

  Headlines:

• Trump yesterday said he was 'Pissed off' at Putin, and threatened tariffs on Russian oil, he also lashed out against Iran
• The Chinese PMI was the best in a year
• Goldman Sachs predicts a massive impact from the tariffs and cuts it`s economic forecast to 1% from 3.5% and unemployment to rise to 4.5%

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.