Today's Update 03-13-2025
Key Points and Metrics
Key Points and Metrics:
Economic Data Releases:
United States:
Producer Price Index (PPI) Month-over-Month (Feb):
Actual: 0%
Forecast: 0.3%
Previous: 0.4% (Revised from 0.6%)
Insight: Indicates that wholesale inflation was unchanged in February, suggesting easing price pressures.
EIA Natural Gas Storage Change (Week Ending Mar 13):
Actual: -62 billion cubic feet (Bcf)
Forecast: -50 Bcf
Previous: -80 Bcf
Insight: The drawdown was larger than expected, which could impact natural gas prices.
Upcoming Releases for March 14:
United Kingdom:
Manufacturing Production Month-over-Month:
Forecast: 0%
Previous: 0.7%
GDP Estimate Year-over-Year:
Previous: 1.5%
GDP Estimate Month-over-Month:
Forecast: 0.1%
Previous: 0.4%
GDP Estimate 3-Month Average:
Forecast: 0.2%
Previous: 0.1%
Industrial Production Month-over-Month:
Forecast: -0.1%
Previous: 0.5%
Services Output Month-over-Month:
Forecast: 0.1%
Previous: 0.4%
Construction Output Month-over-Month:
Forecast: -0.2%
Previous: -0.2%
Germany:
Harmonized Index of Consumer Prices (HICP) Final Year-over-Year:
Forecast: 2.8%
Previous: 2.8%
Consumer Price Index (CPI) Final Year-over-Year:
Forecast: 2.3%
Previous: 2.3%
Wholesale Price Index Year-over-Year:
Previous: 0.9%
Wholesale Price Index Month-over-Month:
Previous: 0.9%
Sweden:
Unemployment Rate Not Seasonally Adjusted:
Previous: 10.4%
Unemployment Rate Seasonally Adjusted:
Forecast: 8.9%
Previous: 9.7%
France:
Consumer Price Index (CPI) Year-over-Year Non-Seasonally Adjusted:
Forecast: 0.8%
Previous: 0.8%
Market News and Developments:
Inflation and Market Response:
The U.S. PPI remained flat at 0% in February, below the forecast of 0.3%.
Impacts:
Dollar Weakness: The lower-than-expected PPI suggests easing inflation, reducing pressure on the Federal Reserve to raise interest rates.
S&P 500 Strength: Stock futures reduced losses on hopes of a less aggressive monetary policy.
Trade Tensions:
President Trump announced intentions to impose a 200% tariff on EU wine if existing EU tariffs are not removed immediately.
Impacts:
Euro Weakness: Heightened trade tensions could negatively affect the euro and European markets.
Political Developments in Germany:
Green Party Official Hasselmann stated there is no progress in talks with conservatives/SPD on debt plans.
Impacts:
Euro Weakness: Political uncertainty may weigh on the euro.
U.S. and Middle East Relations:
The U.S. proposed a ceasefire extension between Israel and Hamas to facilitate more hostage releases and resume humanitarian aid to Gaza.
Source: Axios report citing individuals familiar with the matter.
Comments from U.S. Treasury Secretary Bessent:
Focused on:
Protecting strategic industries and jobs.
Blaming Democrats for potential government shutdown.
Observing that inflation may be getting under control.
Confidence in the progression of the Trump tax bill.
Willingness to increase sanctions on Russia if necessary.
Noting natural adjustments in currency markets regarding the weakening dollar.
European Commission Initiatives:
Considering introducing European preference in public procurement for strategic defense sectors.
Proposing measures to deepen the single market for defense, including regulatory simplification and harmonization.
Plans to propose a defense omnibus simplification regulation by June 2025.
Russia's Response to Sanctions:
The Russian Foreign Ministry expanded its sanctions list in response to the EU's 16th sanctions package.
Commodity Updates:
Energy Sector:
EIA Natural Gas Report:
A larger-than-expected decrease in natural gas storage levels could support natural gas prices.
U.S. Treasury Sanctions:
Sanctions updated on Iran-related entities, potentially impacting energy markets.
Key Takeaways:
Easing Inflation in the U.S.: Flat PPI suggests less inflationary pressure, which might influence Federal Reserve policy decisions.
Trade Uncertainties: Rising tensions between the U.S. and EU over tariffs could impact currency markets and international trade.
Political Developments: Ongoing political negotiations in Germany and the U.S. may have implications for fiscal policies and market stability.
Energy Markets: Changes in natural gas inventories and geopolitical developments are key factors to watch.
FINAL THOUGHTS
Market sentiment appears cautiously optimistic following the better-than-expected PPI data, suggesting inflation pressures are moderating. However, this is counterbalanced by escalating trade tensions with Trump's EU tariff threats. Treasury Secretary Bessent's comments indicate the administration is focused on tax reform while acknowledging market volatility. Energy markets remain sensitive to both storage data and geopolitical developments in the Middle East. The European defense sector could see increased activity following Commission proposals for deeper market integration. Investors should monitor upcoming economic data releases including UK GDP and manufacturing production, German inflation figures, and US bond auctions for further market direction.
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