🛑 Market Report.
📉 On Monday, US stocks experienced their worst trading period, breaking their five-quarter winning streaks and suffering their heaviest three-month losses since 2022. The Nasdaq remains in correction territory. However, the tumult will continue as US President Donald Trump announced that reciprocal tariffs on “all countries” will start on Wednesday, despite some not seeing it as “liberation day.”
📊 Goldman Sachs expects aggressive new tariffs from the Trump administration to raise inflation, increase unemployment, and significantly slow economic growth. The firm sees the new trade actions having a broad, negative impact on the economy: Core inflation hitting 3.5% in 2025, well above the Fed’s 2% target, Q1 2025 GDP growth of just 0.2% and full-year 2025 growth of only 1% and unemployment rising to 4.5%. In response, Goldman expects the Federal Reserve to cut interest rates three times this year, rather than the two cuts previously forecast, to help offset the economic headwinds.
🚗 Tesla’s stock plummeted 36% in the first three months of 2025, its steepest drop since 2022 and third-biggest decline for any quarter on record. Tesla lost over $460 billion in market cap in the quarter, while Musk’s Department of Government Efficiency (DOGE) claims it has so far saved $140 billion in federal spending. Musk’s role in the White House is a factor weighing on Tesla’s stock, contributing to protests, boycotts, and attacks on Tesla stores and vehicles globally. Tesla also faces other headwinds, such as pressure to deliver on Musk’s promises for robotaxis while rivals extend their lead in the market. Musk remains optimistic about Tesla’s long-term prospects, stating that the current dip could be a “buying opportunity” for investors.
🇩🇪 German inflation fell more than expected in March, dropping to 2.3% from 2.6% in February. This is below the 2.4% forecast by analysts. The decline is attributed to falling oil prices and a sluggish economy, helping Germany’s inflation rate approach the European Central Bank’s (ECB) 2% target for price stability. The data suggests euro zone headline inflation will likely come in at 2.2% in March, slightly below expectations. This increases the likelihood that the ECB will cut interest rates again in April.
📉 Core inflation, which excludes volatile food and energy prices, also fell to 2.5% in March from 2.7% previously. This shows the slowdown was not just due to energy and food prices. The weak German economy, including the threat of U.S. tariffs on imported vehicles, is making it harder for companies to pass on higher labor costs to customers.
🤔 Several European Central Bank (ECB) officials are still undecided on whether to cut interest rates at their next meeting on April 17, suggesting the decision is more open than investors currently expect. Policymakers from both the hawkish and dovish camps are considering pausing on further rate cuts at the upcoming meeting. US President Donald Trump’s trade policies and Europe’s military spending surge are factors contributing to the wavering among ECB officials.
🇯🇵 Japan’s jobless rate decreased to 2.4% in February from 2.5% in January, according to government data. The jobs-to-applicants ratio also decreased to 1.24 from 1.26 in January.
🤝 Trump managed to unite China, Japan and South Korea: South Korea, China, and Japan held their first economic dialogue in five years on Sunday, seeking to facilitate regional trade as they brace for U.S. President Donald Trump’s tariffs. The ministers emphasized the need to strengthen the implementation of the Regional Comprehensive Economic Partnership (RCEP) and create a framework for expanding trade cooperation among the three countries. Trump’s announcement of 25% import tariffs on cars and auto parts last week may particularly hurt Asian automakers, who are among the largest vehicle exporters to the U.S.
🌍 Geopolitics:
🇫🇷 The French court decision barring far-right leader Marine Le Pen from running in the 2027 presidential election is causing turbulence in Paris, potentially undermining efforts to stabilize France’s public finances and boosting anti-establishment rhetoric. Le Pen criticized the ruling, claiming the rule of law had been violated. Donald Trump offered his backing, comparing Le Pen’s legal troubles to his prosecutions before retaking power. The decision also highlights Jordan Bardella, the untested 29-year-old candidate to replace Le Pen on the presidential ticket, who could potentially take control of the party she has shaped.
📊 According to an Ifop poll on 28th March, Le Pen’s party leads by 11 points in France, with 36% of the vote, exceeding 10 million votes.
🇪🇸 Spain has called on the European Union to kick off a discussion about seizing Russia’s frozen central bank assets, as the bloc explores ways to provide continued support to Ukraine. Foreign Minister Jose Manuel Albares stated that a debate on using these assets is “more than legitimate”, as the EU is already using the interest generated by them to help Kyiv. Spain wants the EU to consider legal options that would allow the use of the assets to support Ukraine militarily and provide compensation for the destruction caused by Russia’s three-year war.
❄️ The EU, G7 nations, and Australia have frozen about $280 billion of Russian central bank assets, with an additional estimated $58 billion in assets from prominent Russian individuals also frozen. Spain’s move breaks ranks with other Western EU members, including Germany and Belgium, who have warned of the legal and economic consequences of seizing the assets and the potential impact on the international role of the euro. The EU’s eastern members, such as Poland and the Baltic states, have long supported the idea of using the frozen Russian assets to aid Ukraine.
🇮🇱 Israeli Prime Minister Netanyahu is facing corruption charges over his alleged acceptance of lavish gifts from wealthy businessmen and attempts to secure favorable media coverage. The scandal has sparked mass protests in Israel, with thousands demanding his resignation. Despite the pressure, Netanyahu has vowed to fight the charges and remain in power. However, his political allies are starting to distance themselves from him, and calls within the Israeli parliament for him to step down are growing. The outcome of this scandal could have significant implications for Israeli politics and its relationship with the international community, as he has managed to weather numerous scandals and controversies.
💣 Iranian armed forces have called for a preemptive strike on the Diego Garcia military base in the Chagos Islands, a joint UK-US outpost, before the US can use it to target Iran. A senior Iranian official urged top commanders to launch preemptive strikes if US threats against Iran become more serious, citing the recent deployment of B-2 Spirit bombers to the base. The Iranian regime sees Diego Garcia as a potential launching point for US attacks on Iranian underground facilities, and some are suggesting firing missiles towards the island as a warning. Tensions between Iran and the US have escalated since President Trump returned to the White House, with Trump renewing his “maximum pressure” campaign on Iran and threatening “bombing the likes of which they have never seen before” if Iran rejects a nuclear deal. Iranian officials have instructed commanders to ensure missile launchers are prepared and nuclear sites are well protected.
📈 Market View:
🛑 A bad day for the US stock market. Mini S&P 500 futures attempted to recover some of the dramatic falls suffered on Friday, but the recovery was weak. The Mini S&P 500 managed to recover to 5,600 points, currently trading at 5,660. However, there is still great fear about the arrival of 2 April and the activation of tariffs.
📉 For their part, Nasdaq 100 futures also showed a very weak recovery yesterday and are currently at 19,375 points.
💵 The dollar index has risen again, currently standing at over 104.25 points. This has caused the EUR/USD pair to remain on the ropes, very close to losing the 1.08 level.
📉 In Europe, the stock market has also experienced a very weak recovery in the last few hours. The Eurostoxx 50 has lost almost 3% since Friday and is now at 5,200 points. Meanwhile, DAX 40 futures, which yesterday approached 22,200 points, have rebounded and are currently trading above 22,465 points.
🛢️ The crude oil market continues to rise, with a barrel of Brent reaching almost $75 in the last few hours. We recommend you take a look at our geopolitics section, where we explain the imminent tension between Iran and the United States. Iran could block crude oil export routes in the event of a military conflict.
🥇 Meanwhile, gold continues to break records. Yesterday, futures exceeded $3,175 per ounce, and are currently trading at $3,160.
💻 Bitcoin, meanwhile, remains in a lateralisation phase, oscillating between $82,000 and $84,000. It is currently at $83,130.
