Today's Update 03-19-2025
Key Points and Metrics
Key Economic Indicators and Metrics:
US MBA Mortgage Applications (March 19):
Actual: -6.2%
Previous: 11.2%
Insight: Mortgage applications decreased significantly, indicating a potential slowdown in housing market activity.
US MBA 30-Year Mortgage Rate (March 19):
Actual: 6.72%
Previous: 6.67%
Insight: Mortgage rates edged higher, which might impact borrowing costs and demand for mortgages.
EIA Crude Oil Inventories
Forecast: 1 million barrels
Previous: 1.448 million barrels
Note: Awaiting release; changes can influence oil prices and energy sector dynamics.
EIA Gasoline Inventories
Forecast: -3 million barrels
Previous: -5.737 million barrels
Insight: Expected drawdown suggests increased gasoline consumption or decreased production.
EIA Distillate Inventories
Forecast: -0.5 million barrels
Previous: -1.559 million barrels
Insight: A decrease may affect heating oil and diesel markets.
US Interest Rate Decision
Forecast: 4.5%
Previous: 4.5%
Note: The Federal Reserve is expected to maintain current rates. Markets are keen on guidance from the FOMC statement and Chair Powell's press conference
New Zealand GDP QoQ
Forecast: 0.4%
Previous: -1.0%
Insight: Anticipated economic growth rebound after previous contraction.
Key Market News and Developments:
Global Markets Await Federal Reserve Decision:
Stocks recovered, bonds declined, and the US dollar strengthened as traders looked ahead to the Fed's policy decision amid recent market volatility and economic concerns.
Bank of Japan (BoJ) Keeps Policy Unchanged:
BoJ Governor Ueda acknowledged upward pressure on inflation and indicated that the central bank would continue to monitor global trade policies and their impact on Japan's economy.
US-Russia Relations and Ukraine Conflict:
US National Security Adviser Waltz engaged with his Russian counterpart to discuss efforts to end the war in Ukraine.
Russia and Ukraine conducted a prisoner swap, exchanging 175 prisoners each.
Ukraine's President Zelenskiy expressed hope for a ceasefire implementation and believes the war may end this year.
European Central Bank (ECB) Insights:
ECB's Villeroy stated that future rate cuts depend on economic data and that inflation is moving towards the 2% target.
ECB's de Guindos mentioned that the ECB does not have a predetermined rate path, emphasizing data dependency.
Bank of America CEO Comments on US Economy:
CEO Brian Moynihan noted that solid consumer spending bodes well for the economy, with spending rates surpassing last year's figures.
He expects the US economy to slow due to tariff impacts but remains optimistic overall.
UK Engages in Trade Talks to Avoid Tariffs:
The UK is in discussions with the US to prevent reciprocal tariffs related to the digital services tax, hoping to reach an agreement within 48 hours.
Energy Sector Updates:
A fire at Russia's Yaysk oil refinery was extinguished, potentially affecting short-term oil output.
China announced plans to reduce retail fuel prices starting March 20, which could influence global fuel markets.
Corporate Developments:
NVIDIA CEO Huang indicated that near-term tariff impacts would not be significant for the company.
BlackRock, Microsoft, and NVIDIA are collaborating on an AI infrastructure partnership.
Market Implications:
Currency Strength (as of 07:02 March 19):
Strongest to Weakest: USD, CHF, CAD, GBP, AUD, NZD, EUR, JPY
Equity Markets:
US equity futures edged higher, suggesting a potential rebound from previous losses.
Technology stocks showed positive momentum, with companies like Tesla and NVIDIA seeing gains in pre-market trading.
Bond Markets:
Bonds fell as investors shifted focus to risk assets ahead of the Fed's decision.
The Effective Federal Funds Rate remained at 4.33% as of March 18.
Commodities:
Gold prices reached a new record high, reflecting investor caution and demand for safe-haven assets.
Oil markets are attentive to EIA inventory data and geopolitical developments affecting supply.
Geopolitical Events:
US-China Trade Relations:
BoJ Governor Ueda highlighted the impact of US trade policies on global and Japanese economies.
Ongoing tariffs and trade negotiations continue to introduce uncertainties in international markets.
European Union Stance:
The EU plans to tighten steel import quotas starting April 1, aiming to reduce inflows by 15%.
German officials emphasized the importance of not creating an impression of decoupling from the US.
Middle East Tensions:
France's President Macron called for the resumption of negotiations over the Gaza crisis, stating there is no military solution.
Upcoming Events to Watch:
Federal Reserve Announcements
FOMC Rate Statement
FOMC Summary of Economic Projections
Chair Powell's Press Conference
Energy Reports:
EIA Crude Oil, Gasoline, and Distillate Inventories release
International Economic Data:
March 20:
Australian Employment Data
People's Bank of China Interest Rate Decisions
UK Unemployment Rate and Employment Change
FINAL THOUGHTS
Markets remain in a holding pattern as investors await the Federal Reserve's policy decision and updated economic projections. The key focus will be on the Fed's dot plot for clues about the pace and timing of rate cuts this year, especially given recent inflation data and growing concerns about Trump's tariff policies.
Geopolitical tensions continue to simmer with the Russia-Ukraine conflict showing tentative signs of diplomatic movement, though skepticism remains high. Corporate America appears resilient for now, but executives are increasingly factoring tariff impacts into their outlooks.
The divergence between US markets (which have seen significant outflows) and Asian markets (which continue to rally) highlights shifting global investment patterns as uncertainty about US economic policy grows.
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