Morning Brew March 13 2025

Dear all,

Yesterday was a fairly calm trading day despite a flurry of bearish and bullish news. US Inflation came in lower than expected but the trade war is escalating.

After the introduction of new tariffs on aluminum and steel, the EU and Canada retaliate.

A Reuters/Ipsos survey showed 70% of Americans believe tariffs will push prices higher and more than half of Americans find Donald Trump’s trade policies unsteady and only 32% were happy with his efforts on the cost of living.

The Dow ended the day lower at -0.20%, S&P 500 up 0.49% and the Nasdaq gained  1.2% Tesla and Nvidia were strong after the heavy losses earlier in the week, Nvidia rose 6.3% to 115.885 and Tesla 7.95% to 248. Rheinmetall reported earnings yesterday and could rise almost 10% on a strong result and a very optimistic (or bleak geopolitical) outlook. It sees a 25% increase in staff necessary.

Intel rose on a  new CEO and news  that  TSMC had pitched other chip makers to enter a a joint venture to operate the U.S. chip company's factories. The stock closed 4.55% higher and added 12.8% more after hours.

The US budget deficit was $307 billion, exceeding last year's $296.2 billion and surpassing the $303.2 billion forecast. Receipts rose 9% to a record $296 billion, while expenditures increased 6% to $603 billion.

US 10 Year Yields are trading at 4.30 while the EU 10 year is 2.87, the USD Index 103.65, EURUSD 1.0875 GBPUSD 1.2944 and USDJPY 147.70, and Bitcoin 83000. Gold and silver traded higher yesterday and are now 2938 and 33.05. Will gold reach 3’000 in this rise?

Ole took a look at Copper and Charu looked at navigating market downturns

Tariffs and the energy transition: Key short- and long-term drivers of copper demand

• Copper, a key industrial metal that has yet to be included in Trump's widening catalogue of tariff-hit products, continues to rally on the assumption that it is just a matter of time
• Developments that will underpin prices in the short term before a more long-term structural support emerges, driven by the energy transition—one of our commodity-supportive mega trends
• The US HG copper price is currently trading at a 44.5 cents/lb or 9% premium over the global benchmark price at the London Metal Exchange
• The major stockpile shifts to the US will leave copper stranded in the US while leading to a sooner-than-expected tightening of the global market.

Investor FAQ: Navigating the market downturn

Going forward we are watching trade policy, the Russian reaction to the suggested ceasefire and the US initial jobless claims and PPI.

The old German Government is meeting to discuss the constitutional change re the debt brake

G7 is meeting in Canada until tomorrow

Bear in mind that over the last year the average move in the Dax is app 250 points on average, the last few days it is twice that. This means you have twice the Profit or loss with the same position size.

This is also true for other instruments.

Thursday, March 13, 2025

• Eurozone: Industrial Production MoM/YoY (Jan).
• U.S.: Producer Price Index (PPI) Final Demand (Feb).

  Friday, March 14, 2025

• UK GDP
• U.S.: University of Michigan Consumer Sentiment Prelim (Mar).
• China: New Yuan Loans and Total Social Financing (Feb).