Today's Update 03-20-2025
Key Points and Metrics
Key Points and Metrics:
Economic Data Releases:
United States:
Existing Home Sales (February):
Actual: 4.26 million units
Forecast: 3.95 million units
Previous: 4.08 million units
Change: +4.2%
Forecast Change: -3.19%
Previous Change: -4.9%
Leading Index Change Month-over-Month:
Actual: -0.3%
Forecast: -0.2%
Previous: -0.3%
Initial Jobless Claims:
Actual: 223,000
Forecast: 224,000
Previous: 220,000 (Revised to 221,000)
Continued Jobless Claims:
Actual: 1.892 million
Forecast: 1.8865 million
Previous: 1.870 million (Revised to 1.859 million)
Philadelphia Fed Business Index:
Actual: 12.5
Forecast: 9.0
Previous: 18.1
Current Account Balance (Q4):
Actual: -$303.9 billion
Forecast: -$330 billion
Previous: -$310.9 billion
United Kingdom:
Bank of England (BoE) Bank Rate:
Actual: 4.5%
Forecast: 4.5%
Previous: 4.50%
BoE Monetary Policy Committee (MPC) Votes:
Vote Unchanged: 8 (Forecast: 7, Previous: 0)
Vote Cut: 1 (Forecast: 2, Previous: 9)
Vote Hike: 0 (Forecast: 0, Previous: 0)
Gross Domestic Product (GDP) Growth Forecast (Q1):
Revised Up to: 0.25%
Previous Forecast: 0.1%
Canada:
Producer Price Index (PPI) Month-over-Month:
Actual: +0.4%
Forecast: 0.3%
Previous: 1.6%
Producer Price Index (PPI) Year-over-Year:
Actual: +4.9%
Previous: 5.8%
Switzerland:
Swiss National Bank (SNB) Interest Rate Decision:
Actual: 0.25%
Forecast: 0.25%
Previous: 0.50%
Eurozone:
Construction Output Month-over-Month:
Actual: +0.2%
Previous: 0.0%
Central Bank Communications:
European Central Bank (ECB):
President Christine Lagarde:
Emphasized the need for agility and clarity in policy amidst increased trade uncertainties.
Stated that the ECB must remain vigilant due to trade friction impacts on global growth and inflation.
Governing Council Members:
François Villeroy de Galhau: Not concerned about inflation; mentioned the ECB has room for rate cuts.
Klaas Knot: Indicated that interest rates are nearing neutral levels and that the inflation problem is being managed.
Madis Müller: Highlighted upside risks to inflation due to tariffs; expects gradual economic improvement.
Mario Centeno: Does not foresee significant price increases from trade wars but acknowledges growth impacts.
Bank of England (BoE):
Governor Andrew Bailey:
Noted considerable economic uncertainty.
Suggested that interest rates are on a gradually declining path.
Emphasized a cautious approach to easing monetary policy.
Monetary Policy Statement Highlights:
Domestic and wage pressures are moderating but remain elevated.
Inflation is expected to peak at 3.75% in Q3 2025.
No presumption that monetary policy is on a pre-set path; decisions will be data-dependent.
Swiss National Bank (SNB):
Chairman Thomas Jordan:
Acknowledged increased uncertainty about global economic development and inflation.
Expressed readiness to intervene in foreign exchange markets if necessary.
Noted that Swiss inflation is developing in line with expectations.
Vice Chairman Fritz Zurbrügg:
Highlighted downside risks to the inflation outlook.
Mentioned that developments abroad pose the main risk to Switzerland's economy.
Indicated that a more expansionary fiscal policy in Europe could provide medium-term stimulus.
Geopolitical and Trade Developments:
Russia-Ukraine Tensions:
Russia accused Ukraine of a drone attack on a Russian oil facility, calling it a provocation.
Kremlin officials expressed hopes for continued expert-level talks with the U.S. in the coming days.
Russian and U.S. representatives are expected to meet in Saudi Arabia on March 24.
Trade Policies:
The European Commission is considering delaying the first set of counter-tariffs against the U.S. until mid-April.
ECB officials expressed concerns about the negative impacts of tariffs on growth and inflation.
ECB's Lagarde stressed the detrimental effects of trade frictions on global growth and welfare.
Middle East Developments:
Hamas claimed responsibility for a rocket attack on Tel Aviv.
Iran indicated it will respond to a letter from the U.S. President in the coming days.
Market Updates:
Equity Markets:
U.S. stock futures declined amid concerns over the Federal Reserve's ability to lower interest rates due to potential inflation from trade tariffs.
S&P 500 and Nasdaq 100 futures dropped by at least 0.8%.
European Stoxx 600 Index fell by 1%, breaking a four-day winning streak.
Commodities:
Copper Prices: Surpassed $10,000 per tonne amid fears of increased tariffs affecting supply and demand dynamics.
Energy Markets: Geopolitical tensions and policy uncertainties continue to influence energy prices.
Currency Markets:
British Pound (GBP): Declined by nearly 0.5% after reaching its highest levels since November earlier in the week.
Swiss Franc (CHF): Remains strong; SNB maintains readiness to intervene to manage currency valuations.
Corporate News:
Apple Inc.:
Reported that streaming subscribers increased to 45 million last year.
Streaming service losses amounted to over $1 billion annually, according to industry reports.
Housing Market:
Despite an uptick in early-stage demand, near-record housing costs are constraining pending home sales in the U.S.
Summary:
The BoE kept rates unchanged but hinted at careful future easing, acknowledging persistent domestic pressures.
The ECB is vigilant about trade tensions' impact on growth and inflation, with members expressing varied views on inflation risks.
The SNB maintained its policy rate and expressed concerns over global uncertainties, particularly from abroad.
Geopolitical events, such as tensions between Russia and Ukraine, and trade policy developments between major economies, are adding to market uncertainties. Markets are reacting to these developments with cautious sentiment, reflected in declines in equity futures and fluctuating commodity prices.
FINAL THOUGHTS
The markets are showing mixed signals today with central banks maintaining cautious stances. The surprising strength in US housing data contrasts with the continued decline in the Leading Index, suggesting economic resilience amid slowing momentum.
Central banks are clearly monitoring trade tensions closely, with the ECB particularly concerned about tariff impacts on inflation and growth. The BoE's more hawkish-than-expected vote split indicates persistent inflation concerns, while the SNB's rate cut reflects growing economic uncertainty.
Investors should watch upcoming US jobless claims and EIA natural gas data, along with Nike's earnings after market close, for further market direction. Trade tensions and central bank divergence will likely remain key themes driving market volatility in the near term.
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
Hi Harry, just came across your page. So much insight! I think the problem the world could suffer with is a case of stagflation. Big firms not wanting to make important decisions regarding investment and consumer confidence lower growth will slow. Inflation expectations starting to creep once we see the effects of tariffs. Euro poised to go higher with the defense budget been approved alongside commercials long in the COT report.