Global News Summary: 10-14 March 2025

United States (USD)

Economic Growth & Trade

Trump’s Trade War Escalates

• Tariffs on Canada and Mexico were confirmed at 25%, leading to retaliatory measures from both countries.

• China imposed an additional 10% in tariffs on $22bn worth of U.S. goods, targeting agriculture exports and rural states.

• Investors fear Trump’s trade policies will prolong market volatility and economic uncertainty.

Stock Market Volatility & Recession Fears

• The S&P 500 lost over 8% from its recent peak, showing heightened concerns over growth and tariffs.

• Despite a 2.1% rebound on 14 March, sentiment remains weak due to geopolitical uncertainty and interest rate expectations.

Federal Reserve & Inflation Outlook

• Inflation slowed to 2.8% in February (Jan: 3%), increasing expectations for rate cuts.

• Fed Chair Jerome Powell reassured investors, stating the economy remains in “good shape” despite uncertainty.

• Markets still anticipate rate cuts later in 2025, but recession risks linger.

U.S. Government Shutdown Threat

• House Republicans passed a spending bill to keep government agencies funded until 30 September.

• The Senate rejected the Republican stopgap bill, bringing the U.S. closer to a shutdown by 15 March.

Debt & Bonds

• U.S. 10-year Treasury yields rose to 4.31% as markets reassessed inflation risks and fiscal uncertainty.

Canada (CAD)

Political Shift & Trade War Response

• Former Bank of England governor Mark Carney replaced Justin Trudeau as Canadian Prime Minister.

• Canada maintained retaliatory tariffs on U.S. goods and introduced a 25% surcharge on electricity exports to U.S. states including Michigan, Minnesota, and New York, costing $400,000 daily for affected businesses.

Bank of Canada Cuts Rates

• BoC reduced interest rates to 2.75%, the lowest since 2022, warning that the trade war with the U.S. will slow economic growth.

United Kingdom (GBP)

Economic Growth & Policy

Government Aims to Boost Growth Through Technology

• The UK introduced new performance targets for regulators to accelerate innovation in areas such as AI, delivery drones, and lab-grown proteins.

• Ministers pushed employment law reforms to regulate zero-hour contracts, unfair dismissal, and sick pay.

Inflation & Consumer Trends

• Annual food inflation rose to 2.1% in February (Jan: 1.6%), increasing cost-of-living pressures.

• Retail sales grew just 1.1% YoY in February, down from 2.4% in January, indicating weak consumer demand.

Government Response to U.S. Tariffs

• PM Keir Starmer was “disappointed” by Trump’s tariffs on UK steel and aluminium but refrained from retaliation, opting for trade negotiations instead.

Eurozone (EUR)

Economic Growth & Inflation

Inflation Slows, ECB Cautious on Rate Cuts

• Eurozone inflation fell to 2.4% in February (Jan: 2.5%), with core inflation also easing to 2.6%.

• ECB Executive Board member Isabel Schnabel warned that inflation risks remain “tilted to the upside”, delaying rate cuts.

Germany’s Economic Shift

• Friedrich Merz’s CDU/CSU party won national elections, forming a coalition to boost military and infrastructure spending.

• German bond yields surged to 2.79% on expectations of higher government borrowing.

Trade War Retaliation Against U.S.

• EU imposed countermeasures against Trump’s tariffs, affecting €26bn worth of U.S. goods.

• France revised its 2025 growth forecast down to 0.7% (Dec: 0.9%) due to global trade war risks.

Japan (JPY)

Currency & Inflation Trends

• Japanese yen strengthened amid risk aversion and higher wage growth (+3.1% in Jan, the highest since 1992).

• Tokyo inflation slowed to 2.2% YoY in February (Jan: 2.3%), though the Bank of Japan remains on track to raise interest rates.

Interest Rate Expectations

• BoJ Deputy Governor Uchida signalled gradual rate hikes, expecting the 2% inflation target to hold.

• The BoJ is expected to keep rates unchanged in March, with a hike likely later in 2025.

China (CNY)

Economic Growth Concerns

• China’s economy grew at 5% in 2025, but deflation concerns remain as consumer inflation fell below 0% for the first time in 13 months.

• China announced fresh tariffs of up to 15% on U.S. agricultural goods in retaliation for Trump’s levies.

Currency & Trade

• China let the yuan strengthen as U.S. economic concerns provided temporary relief from currency pressures.

Australia (AUD)

Consumer Confidence & Growth

• GDP grew 0.6% QoQ in Q4 2024, with household spending up 0.4% QoQ and 0.7% YoY.

• Consumer confidence improved in March, reaching 95.9, as inflation eased.

Artificial Intelligence (AI)

Big Tech AI Developments

• Meta is launching voice AI features in Llama 4, enhancing its open-source model.

• Microsoft built new AI models to rival OpenAI, showing greater independence despite its $13bn investment.

• OpenAI and Oracle to build a $100bn AI infrastructure venture, starting with a Texas data centre powered by Nvidia chips.

AI Start-Up Investment Booms

• Anthropic raised $3.5bn, tripling its valuation to over $60bn, as competition with OpenAI and DeepSeek intensified.

• Wayve (UK-based autonomous driving start-up) secured over $1bn for international expansion.

Environmental, Social & Governance (ESG)

Oil Prices Drop as OPEC+ Plans Supply Boost

• WTI crude fell to $67.02 per barrel after OPEC+ announced plans to revive halted production in April.

Green Bonds & European Defence Spending

• The EU raised over €95bn in green bonds, as the bloc plans to boost defence spending amid geopolitical uncertainty.

Key Takeaways

Economic Growth Concerns & Trade War Risks:

• Global economies face pressure from rising tariffs, with retaliatory measures from Canada, the EU, and China escalating tensions.

Inflation & Rate Cuts:

• U.S. inflation slowed to 2.8%, Eurozone inflation fell to 2.4%, but Japan and China remain cautious about deflationary risks.

• The Bank of Canada cut rates to 2.75%, while the ECB and Fed are expected to cut later in 2025.

Markets Volatile Amid Political Uncertainty:

• S&P 500 rebounded 2.1% on 14 March but remains in correction territory due to trade and recession fears.

AI Investment Surging:

• Meta, Microsoft, OpenAI, and Anthropic are leading new AI infrastructure and software investments, fuelling a $100bn+ industry boom.