Morning Brew March 18 2025

Good morning,

Despite rather bleak data, equities traded friendly yesterday, the Dow closed up 0.85%, the S&P 500 0.64%, the Nasdaq 0.31%, the GER40 is above 23k again at 23255. Tesla was the outlier at -5% on a downgrade by Mizuho.

The Atlanta Fed GDP Now Forecast sees US GDP to contract by 2.1% based on yesterdays data.

Investors reacted positively to China's "special action plan" aimed at boosting domestic consumption, with measures to increase incomes, stabilize markets, promote births, and support tourism.

Gold is at record highs, please see Ole`s morning comment on commodities:

• Gold hit a new record above USD 3,017 an ounce amid rising Middle East tensions and US economic concerns. Bullion rose after Israel's military strikes on Hamas in Gaza threatened a fragile truce, while Trump has increased pressure on Iran to control the Houthis. For silver to keep up with gold it needs to attract fresh momentum demand above USD 34.10. Also look out for a break in XAUXAG below 87.85.  
• Crude rose for a third day as traders scaled back bearish bets related to demand concerns, and instead focused on renewed Middle East tensions that ultimately could see production suffer, especially from Iran as the Trump administration tightens sanctions against Tehran.  
• Sugar futures climbed 4% on Monday to the highest in almost three weeks due to scaled-back production estimates in the world’s top growers, Brazil and India. The sweetener has seen wild price swings during the past couple of months, in part caused by wrong-footed speculators. 
• HG copper futures in New York nearly touched $5 overnight for the first time since May, supported by China growth initiatives and not least a continued tariff related widening of the premium above London to 50 cents or 11%.  

Yields remain calm ahead of the US rate decision with the US 10-year yield at 4.29 an the EU at 2.81. The USD Index falls to 103.50 as EURUSD rises to 1.0915 and GBPUSD 1.2977, USDJPY is 149.75.

The day is likely to be news-driven with focus on the Trump/Putin call but there is also a significant risk from the German parliamentary vote on the debt ceiling. Any surprise in the economic releases will be watched.

• President Donald Trump will speak with Russian President Vladimir Putin today in an attempt to convince his counterpart to accept a ceasefire. This is presented as a test of Donalds ability to achieve deals.
• Israeli conducted air strikes in Gaza killing 200 people acc to Palestinian health authorities said
• Germany`s Bundestag will vote on a massive surge in borrowing to boost Europe's largest economy and stimulate growth across the region
• Foreign CEOs will visit Beijing this month for a flagship development conference

Tuesday, March 18, 2025

• Eurozone: ZEW Economic Sentiment Index (Mar).
  US Import Prices
•  Canada CPI

• US Industrial Production
• Earnings: StoneCo, Maravai LifeSciences, Waldencast, HealthEquity, Surf Air Mobility, Inovio Pharmaceuticals, OmniAb, ZTO Express, Absci

  Wednesday, March 19, 2025

• Japan: BoJ Interest Rate Decision.
• Indonesia: Interest Rate Decision.
• US Rate decision
• Earnings: General Mills, Williams-Sonoma, Signet Jewelers, Five Below, Kingsoft Cloud, Tencent

• Thursday, March 20, 2025
  China, Sweden, Switzerland UK Rate decisions

• U.S.: Initial Jobless Claims (Mar 15), Philadelphia Fed

• Nike, Accenture, FedEx, Micron Technology, Pinduoduo

• Sweden Riksbank Rate decision

Friday, March 21, 2025

• Japan CPI