Today's Update 03-26-2025
Key Points and Metrics
Key Points and Metrics:
Economic Data Releases:
EIA Crude Oil Inventories (March 26):
Actual: -3.341 million barrels
Forecast: +1.977 million barrels
Previous: +1.745 million barrels
EIA Gasoline Inventories:
Actual: -1.446 million barrels
Forecast: -1.5 million barrels
Previous: -0.527 million barrels
EIA Distillate Inventories:
Actual: -0.421 million barrels
Forecast: -1 million barrels
Previous: -2.812 million barrels
EIA Crude Cushing Inventories:
Actual: -0.755 million barrels
Previous: -1.009 million barrels
Economic Indicators:
UK Consumer Price Index (CPI) Year-over-Year:
Actual: 2.8%
Forecast: 3.0%
Previous: 3.0%
Note: The Pound weakened following the release.
UK Debt Management Office (DMO) Announcement:
Gross Gilt Issuance Planned for 2025/26: £299.2 billion
Consensus Estimate: £304 billion
Impact: UK bond prices strengthened.
U.S. Durable Goods Orders (February Preliminary):
Headline Durable Goods Orders:
Actual: +0.9%
Forecast: -1.0%
Previous: +3.3% (Revised from +3.2%)
Core Durable Goods Orders (Excluding Transportation):
Actual: +0.7%
Forecast: +0.2%
Previous: +0.1% (Revised from 0.0%)
Federal Reserve Commentary:
Fed's Kashkari Statements:
Expressed uncertainty about the effects of tariffs on the economy.
Noted that the hit to confidence could be more significant than the tariffs themselves.
Suggested maintaining the current stance on interest rates due to mixed impacts.
Market Sentiment Indicators:
Fear and Greed Index:
Value: 30/100
Status: Fear
Crypto Fear and Greed Index:
Value: 47/100
Status: Neutral
International Trade and Relations:
China-U.S. Trade Relations:
China's Vice Premier He Lifeng had a video call with U.S. Trade Representative Greer.
China expressed serious concerns about U.S. tariffs and planned reciprocal tariffs.
Both parties had candid and in-depth discussions on key economic and trade issues.
European Union Stance on Russia:
EU Commission spokeswoman emphasized that sanctions are not targeting agricultural goods.
EU focuses on maximizing pressure on Russia to end its military actions in Ukraine.
UK Spring Statement Highlights:
Chancellor Reeves' Announcements:
The Office for Budget Responsibility (OBR) raised the GDP growth forecast:
2025/26: 1.9% (previously 1.8%)
Inflation is expected to return to the 2% target from 2027 onwards.
Public spending is projected to rise, with investments in defense and public services.
Plans to reform welfare systems and raise funds by tackling tax evasion.
Energy Sector Updates:
Dallas Fed Energy Survey:
Activity in the oil and gas sector increased slightly in Q1 2025.
Businesses expect the price of WTI crude oil to reach $68 per barrel by the end of 2025.
Costs among oilfield service firms increased at a faster pace compared to the previous quarter.
Russia Energy Developments:
Deputy PM Novak stated that the Nord Stream 2 undamaged link is in working condition.
Mentioned that repairs to the Sudzha gas station will depend on future energy deals with the EU.
Miscellaneous News:
U.S. Government Debt Ceiling:
The Congressional Budget Office estimates that without an increase in the debt ceiling, the U.S. could face default risk as soon as August.
OpenAI Developments:
Reports indicate that OpenAI is considering building its own data center for storage purposes.
Trump's Remarks:
Stated that Greenland is essential for international security.
Mentioned progress on Russia-Ukraine talks.
Market Movements:
Global Equities:
Stocks experienced a selloff due to concerns over economic impacts of a potential trade war.
Europe's Stoxx 600 Index fell by 0.5%.
U.S. stock futures showed slight declines; S&P 500 and Nasdaq 100 futures were down approximately 0.2%.
Forex Movements:
The British Pound weakened following lower-than-expected CPI figures.
Bond Yields:
UK 2-year bond yields fell nearly 6 basis points after the CPI release.
Company News:
GameStop Corporation:
Shares increased by 12% after the board authorized Bitcoin as a treasury reserve asset.
Other Significant Events:
Federal Reserve Activities:
Fed's Kashkari hosted a "Fed Listens" event discussing economic conditions.
Upcoming Events:
Fed's Musalem and ECB officials are scheduled to speak later.
EIA weekly petroleum status report released.
Market Impact:
A selloff in tech megacaps pushed stocks lower today, with concerns about the economic consequences of a potential trade war sapping market liquidity. The S&P 500 and Nasdaq 100 futures were down approximately 0.2% in early trading. GameStop bucked the trend, gaining 12% after announcing Bitcoin as a treasury reserve asset.
Minneapolis Fed President Kashkari made several notable comments about tariffs, stating: "It's conceivable that the hit to confidence could be a bigger effect than the tariffs themselves." He described the current shift in confidence as "the most dramatic in the last decade, save for the COVID era," adding that "a lot of the uncertainty shift is about tariffs." Kashkari also noted that "after 2018 tariffs, we saw less reshoring of manufacturing to the US than to other countries."
On monetary policy, Kashkari indicated that "in the next year or two, we ought to be able to reduce interest rates further," but also suggested there's "kind of a wash between the forces on interest rates from tariffs, so we should sit where we are."
The UK pound weakened following lower-than-expected inflation data, strengthening the case for BoE rate cuts. UK Chancellor Reeves presented the Spring Budget Statement, maintaining fiscal rules while forecasting GDP growth of 1.9% next year. The OBR warned that "if global trade disputes escalate to include 20 percentage point rises in tariffs between the USA and the rest of the world, this could reduce UK GDP by a peak of 1% and reduce current surplus in the target year to almost zero."
Oil prices found support after EIA data showed a larger-than-expected drawdown in crude inventories. The Dallas Fed Survey indicated that oil and gas activity edged higher in Q1 2025, with businesses expecting WTI oil price of $68 per barrel at year-end 2025.
In geopolitical news, Trump mentioned "making great strides on Russia, Ukraine talks" and expressed interest in Greenland, stating "we need Greenland for international security." Meanwhile, China and the US continue trade discussions, with China expressing "solemn concerns on US tariffs and planned reciprocal tariffs."
Final Thoughts:
Markets are clearly on edge regarding potential trade disruptions as Trump's April 2nd tariff deadline approaches. Fed's Kashkari's comments highlight a critical aspect of trade tensions – their impact on business and consumer confidence could potentially outweigh the direct economic effects of the tariffs themselves.
The stronger-than-expected US durable goods orders suggest underlying economic resilience despite these concerns. Meanwhile, the UK's inflation slowdown provides the BoE with more flexibility on monetary policy.
The Fear and Greed Index reading of 30 (Fear) reflects the market's current anxiety about trade policy uncertainty. Investors should closely monitor upcoming economic data points and Fed commentary, as the interplay between trade policy uncertainty, inflation trends, and central bank responses will likely drive market direction in the near term. A resolution of trade uncertainties, as Kashkari noted, could quickly restore confidence and potentially lead to a market rebound.
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