Today's Update 03-04-2025

Key Points and Metrics

Key Points and Metrics

• US Redbook YoY:

  • Actual: 6.6%

  • Previous: 6.2%

  • Indicates a continued increase in retail sales, reflecting strong consumer spending.

• Upcoming Events:

  • US House Speaker Johnson speaks.

  • US Democratic Senator's press conference.

  • Fed's Williams speaks.

  • US API Stock Changes (Tentative)

    • Distillate Stock Change:

      • Previous: -1.109 million barrels

    • Cushing Stock Change:

      • Previous: 1.182 million barrels

    • Crude Oil Stock Change:

      • Previous: -0.64 million barrels

    • Gasoline Stock Change:

      • Previous: 0.537 million barrels

• Australian Economic Data:

  • Services PMI Final: 51.4

  • Composite PMI Final: 51.2

  • Reflects moderate expansion in the services sector.

  • AIG Manufacturing Index:

    • Previous: -22.7

  • AIG Construction Index:

    • Previous: -20.0

• South Korean GDP (Revised):

  • GDP YoY:

    • Forecast: 1.2%

    • Previous: 1.2%

  • GDP QoQ:

    • Forecast: 0.1%

    • Previous: 0.1%

• Australian GDP Forecasts:

  • Real GDP YoY:

    • Forecast: 1.3%

    • Previous: 0.8%

  • Real GDP QoQ:

    • Forecast: 0.6%

    • Previous: 0.3%

• Asian PMI Data:

  • Japanese Services PMI:

    • Actual: 53.1

    • Indicates solid expansion in Japan's services sector.

  • Hong Kong S&P PMI:

    • Actual: 51.0

    • Shows modest growth in business activity.

• Chinese Caixin Services PMI:

  • Forecast: 50.7

  • Previous: 51.0

• Singapore Retail Sales:

  • Retail Sales YoY:

    • Forecast: 2.05%

    • Previous: -2.9%

  • Retail Sales MoM:

    • Previous: -1.5%

• Swiss CPI Data:

  • CPI YoY:

    • Forecast: 0.2%

    • Previous: 0.4%

  • CPI MoM:

    • Forecast: 0.5%

    • Previous: -0.1%

• European PMI Data:

  • French Industrial Production MoM:

    • Forecast: 0.4%

    • Previous: -0.4%

  • Spanish Services PMI:

    • Actual: 55.5

    • Previous: 54.9

    • Continued expansion in the services sector.

  • Italian Services PMI:

    • Actual: 51.0

    • Previous: 50.4

    • Indicates modest growth.

  • Italian Composite PMI:

    • Actual: 50.0

    • Previous: 49.7

  • French Services PMI:

    • Actual: 44.5

    • Previous: 44.5

    • Signifies contraction in the services sector.

  • French Composite PMI:

    • Actual: 44.5

    • Previous: 44.5

  • German Services PMI Final:

    • Actual: 52.2

    • Previous: 52.2

    • Steady expansion in Germany's services sector.

Market Sentiment

• S&P 500 stocks declined due to concerns about US trade tariffs impacting economic growth

• US Redbook YoY: 6.6% (Previous: 6.2%) - showing stronger retail sales growth

Trade Tensions

• Trump announced new tariffs on Mexico, Canada, and China

• Mexico planning retaliatory tariffs to be announced Sunday (March 10)

• US Commerce Secretary Lutnick called April 2nd a "trade reset"

Geopolitical Developments

• Putin reportedly tapped by Trump to broker Iran nuclear talks

• US Senate Majority Leader Thune indicated a Ukraine deal will eventually be signed

Economic Data Calendar

• Key upcoming releases: Australian GDP, Swiss CPI, Chinese Caixin Services PMI

• Fed's Williams speaking later today

• API crude oil inventory data

Energy Markets

• Russian Finance Ministry sees average oil price in 2025 at closer to $60

• Kazakhstan reaffirmed commitments to OPEC+ deal

• Oil weakened on news about potential Iran nuclear talks

Central Bank Activity

• ECB bond holdings under PEPP at €1.58 trillion

• Effective Fed Funds Rate steady at 4.33%

• Bundesbank proposing to raise government borrowing capacity to 1.4% of GDP from 0.35%

My Thoughts

The markets are clearly reacting to escalating trade tensions, with Trump's tariff announcements triggering concerns about global economic growth. The 10% tariffs on Mexico and Canada represent a significant shift in North American trade relations, potentially undermining the USMCA agreement. Mexico's planned retaliatory measures signal we're entering a period of trade conflict that could disrupt supply chains and increase consumer prices.

The stronger-than-expected Redbook retail sales (6.6% vs previous 6.2%) suggests US consumer spending remains resilient despite these headwinds, but this strength could be tested if tariffs lead to higher prices. The reported involvement of Putin in Iran nuclear talks is particularly noteworthy as it could impact oil markets if it leads to increased Iranian oil exports.

Investors should watch Fed's Williams' comments today for any hints about the pace of rate cuts, especially as the Fed balances inflation concerns against potential economic damage from trade tensions. The Bundesbank's proposal to increase Germany's borrowing capacity could signal a shift toward more fiscal stimulus in Europe's largest economy, potentially supporting European growth.

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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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Harry