Today's Update 03-27-2025
Key Points and Metrics
Key Points and Metrics:
U.S. Economic Indicators:
Gross Domestic Product (GDP):
GDP QoQ Final:
Actual: 2.4%
Forecast: 2.3%
Previous: 2.3%
GDP Price Index:
Actual: 2.3%
Forecast: 2.4%
Previous: 2.4%
Core Personal Consumption Expenditures (PCE) Prices Final:
Actual: 2.6%
Forecast: 2.7%
Previous: 2.7%
Labor Market Data:
Initial Jobless Claims:
Actual: 224K
Forecast: 225K
Previous: 225K (Revised from 223K)
Continued Jobless Claims:
Actual: 1.856M
Forecast: 1.886M
Previous: 1.881M (Revised from 1.892M)
Trade and Inventories:
Advance Goods Trade Balance:
Actual: -$147.9B
Forecast: -$139B
Previous: -$155.57B
Wholesale Inventories MoM Advance:
Actual: 0.3%
Forecast: 0.7%
Previous: 0.8%
Retail Inventories Ex-Auto Advance:
Actual: 0.1%
Previous: 0.5%
Housing Market:
Pending Home Sales Index:
Actual: 72.0
Previous: 70.6
Pending Home Sales Change MoM:
Actual: 2%
Forecast: 1%
Previous: -4.6%
Federal Reserve Rates:
Effective Federal Funds Rate (EFFR):
March 26: 4.33%
Secured Overnight Financing Rate (SOFR):
March 26: 4.35%
Energy Sector:
EIA Natural Gas Storage Report:
Natural Gas Change:
Actual: +37B cubic feet
Forecast: +34B cubic feet
Previous: +9B cubic feet
Oil Exports:
Iraq's February Total Oil Exports:
Actual: 95.148 million barrels
Manufacturing Data:
Kansas City Federal Reserve Survey:
Manufacturing Index:
Actual: 1
Previous: -13
Composite Index:
Actual: -2
Forecast: -5
Previous: -5
International Trade and Tariffs:
U.S. Tariffs on Automakers:
The U.S. imposed a 25% tariff on vehicle imports, raising concerns over a potential trade war.
President Trump threatened additional duties if the European Union (EU) cooperates with Canada against the U.S.
Global Responses:
European Auto Suppliers Association: Called the U.S. decision "misguided and harmful."
France's President Macron:
Expressed intent to support sectors hit by U.S. tariffs.
Plans to work with the EU on protective measures.
Mentioned that Trump's tariff policy is inflationary.
Mexico's President Sheinbaum:
Expressed concerns over auto tariffs.
Stated that tariffs should not exist within free trade agreements like USMCA.
Working on a thorough response to the tariffs.
Central Bank Updates:
European Central Bank (ECB):
ECB's de Guindos:
Highlighted high uncertainty on growth due to trade tensions.
Mentioned that a trade war is extremely detrimental to growth.
Optimistic about inflation converging towards target levels in the coming quarters.
Norwegian Central Bank:
Key Policy Rate:
Actual: 4.5%
Forecast: 4.5%
Previous: 4.50%
International Relations and Geopolitics:
Ukraine and Russia:
Ukraine's President Zelenskiy:
Addressed concerns over a minerals deal with the U.S.
Stated that Russian conditions for a Black Sea ceasefire are unrealistic.
Russia's Foreign Ministry:
No concrete agreements on the Black Sea deal.
China and EU Relations:
China's Vice Premier He Lifeng:
Met with EU Trade Chief.
Expressed willingness to strengthen dialogue and handle economic and trade disputes.
Economic Forecasts and Ratings:
International Monetary Fund (IMF):
U.S. Economic Outlook:
Current data signals the economy is slowing from a strong 2024.
A U.S. recession is not part of the baseline forecast.
Trade Impact:
Sustained tariffs could have a significant adverse effect on Canada and Mexico's growth.
Credit Ratings:
Moody's:
Warned that higher tariffs and tax cuts could boost deficits.
Edging closer to a potential U.S. credit downgrade.
Standard & Poor's (S&P):
Affirmed Japan's A+/A-1 ratings with a stable outlook.
Market Movements and Sentiment:
Stock Market:
Stocks recovered losses as several megacap companies rallied.
S&P 500 Futures: Remained mostly unchanged after the previous day's decline.
Currencies and Commodities:
Gold Prices: Rose amid economic uncertainties.
U.S. Dollar: Remained steady despite market fluctuations.
Investor Sentiment:
Fear and Greed Index:
General Market: 29/100 (Fear)
Crypto Market: 40/100 (Fear)
Additional Noteworthy Points:
ECB's Villeroy:
Mentioned the need for France to reduce its deficit to 3%.
European Union (EU):
Preparing a response to new import tariffs announced by the U.S.
Considering deploying the anti-coercion instrument as a retaliatory measure.
Credit Suisse Default Swaps:
Highlighted financial instability concerns in the banking sector (specific details not provided in data).
Upcoming Events to Watch
Trump signing executive orders (14:00)
Fed's Collins and Barkin speaking (16:30)
Tokyo Core CPI YoY data release (19:30)
UK GDP and Retail Sales data (March 28, 3:00)
Final Thoughts:
The markets are navigating a complex environment where stronger-than-expected US economic growth (2.4% GDP) is providing support for equities, while escalating trade tensions create uncertainty. Trump's threatened tariffs against multiple trading partners, particularly targeting the EU and potentially extending to emerging markets like Brazil and India, are creating volatility. The improved Kansas City Fed manufacturing data suggests regional economic resilience despite these headwinds. Financial institutions including the IMF, Moody's, and Fitch are warning about the economic impact of these trade policies, with Moody's noting the combination of higher tariffs and tax cuts will boost deficits, potentially moving closer to a US downgrade. Investors should closely monitor upcoming Fed speakers and economic data releases while preparing for potential market volatility as trade policy developments unfold.
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