Today's Update 03-03-2025

Key Points and Metrics

Key Points and Metrics:

1. United States Economic Data:

   • ISM Manufacturing PMI:

     • Actual: 50.3

     • Forecast: 50.7

     • Previous: 50.9

   • ISM Manufacturing Prices Paid Index:

     • Actual: 62.4

     • Forecast: 56

     • Previous: 54.9

   • ISM Manufacturing Employment Index:

     • Actual: 47.6

     • Forecast: 50.1

     • Previous: 50.3

   • ISM Manufacturing New Orders Index:

     • Actual: 48.6

     • Forecast: 54.6

     • Previous: 55.1

   • Construction Spending MoM:

     • Actual: -0.2%

     • Forecast: -0.1%

     • Previous: 0.5%

   • S&P Manufacturing PMI Final:

     • Actual: 52.7

     • Forecast: 51.6

     • Previous: 51.6

   • Effective Fed Funds Rate (Feb 28): 4.33%

   • Secured Overnight Financing Rate (SOFR, Feb 28): 4.39%

2. Canadian Economic Data:

   • Manufacturing PMI:

     • Actual: 47.8

     • Previous: 51.6

3. Eurozone Economic Data:

   • CPI YoY Flash Estimate:

     • Actual: 2.4%

     • Forecast: 2.3%

     • Previous: 2.5%

   • Core CPI YoY Flash Estimate:

     • Actual: 2.6%

     • Forecast: 2.5%

     • Previous: 2.7%

   • CPI MoM Flash Estimate:

     • Actual: 0.5%

     • Forecast: 0.4%

     • Previous: -0.3%

   • Manufacturing PMI Final:

     • Actual: 47.6

     • Forecast: 47.3

     • Previous: 47.3

4. United Kingdom Economic Data:

   • Manufacturing PMI Final:

     • Actual: 46.9

     • Forecast: 46.4

     • Previous: 46.4

   • Mortgage Approvals:

     • Actual: 66,189

     • Forecast: 65,500

     • Previous: 66,526

   • Mortgage Lending:

     • Actual: £4.207B

     • Forecast: £3.5B

     • Previous: £3.568B

   • BoE Consumer Credit:

     • Actual: £1.74B

     • Forecast: £1.2B

     • Previous: £1.045B

   • M4 Money Supply: Actual: 1.3%; Previous: 0.1%

5. Germany Economic Data:

   • Manufacturing PMI Final:

     • Actual: 46.5

     • Forecast: 46.1

     • Previous: 46.1

6. France Economic Data:

   • Manufacturing PMI:

     • Actual: 45.8

     • Forecast: 45.5

     • Previous: 45.5

7. Italy Economic Data:

   • Manufacturing PMI:

     • Actual: 47.4

     • Forecast: 46.7

     • Previous: 46.3

8. Spain Economic Data:

   • Manufacturing PMI:

     • Actual: 49.7

     • Forecast: 51.4

     • Previous: 50.9

9. Japanese Economic Data:

   • Manufacturing PMI:

     • Actual: 49

     • Previous: 48.9

10. Australian Economic Data:

    • Current Account Balance:

      • Actual: -14.1B

      • Previous: -14.1B

    • Gross Company Profits:

      • Actual: 5.9%

      • Forecast: 1.8%

      • Previous: -4.6%

    • Business Inventories:

      • Actual: 0.1%

      • Forecast: 0%

      • Previous: -0.9%

    • Manufacturing PMI Final:

      • Actual: 50.4

      • Previous: 50.6

11. Chinese Economic Data:

    • Caixin Manufacturing PMI:

      • Actual: 50.8

      • Forecast: 50.4

      • Previous: 50.1

12. Turkish Economic Data:

    • CPI MoM:

      • Actual: 2.27%

      • Forecast: 2.9%

      • Previous: 5.03%

    • CPI YoY:

      • Actual: 39.05%

      • Forecast: 39.9%

      • Previous: 42.12%

13. Market Movements:

    • US Stock Futures: Indicated gains with S&P 500 futures up 0.5% and Nasdaq 100 futures up 0.7%.

    • European Equities and Euro: Rallied on expectations of increased defense spending.

    • German and French Bonds: Fell amid expectations of more debt issuance.

    • Crypto Markets: Surged following recent statements regarding strategic reserves.

14. Geopolitical Developments:

    • US Tariffs: Potential tariffs on Canada, Mexico, and China set to go into effect.

    • Mexico's Response: President Sheinbaum stated that Mexico is prepared to retaliate if the US imposes tariffs.

    • Ukraine-Russia Conflict: President Zelenskiy mentioned that ending the war is "very, very far away."

    • European Defense Spending: Germany and EU leaders discussing significant increases in defense budgets.

    • China's Stance: China reiterated it will defend its interests in response to US tariffs.

Final Thoughts

The manufacturing sector is showing concerning signs despite the headline S&P PMI reaching a 32-month high. The ISM data paints a more troubling picture with employment and new orders both contracting, while prices paid surged significantly to 62.4. This combination suggests potential stagflation risks.

The divergence between the S&P and ISM manufacturing indices is notable and creates uncertainty about the true state of US manufacturing. The sharp rise in prices paid coupled with declining new orders is particularly worrisome as it could pressure corporate margins.

Impending tariffs remain the market's primary concern, with both Mexico and Canada preparing retaliatory measures. This trade tension could further exacerbate inflation at a time when price pressures appear to be reaccelerating.

The Eurozone inflation came in hotter than expected at 2.4%, which may complicate ECB rate cut expectations. Meanwhile, Canada's manufacturing sector has slipped into contraction territory, potentially limiting the Bank of Canada's policy flexibility.

Markets appear to be in a holding pattern ahead of Trump's tariff announcement, with investors weighing the inflationary impact against potential economic slowdown. This creates a challenging environment for central banks globally as they navigate between inflation concerns and growth risks.

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Disclaimer: This article is for informational purposes only and does not constitute investment advice. Always do your own research and consider your financial situation before making investment decisions.

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