Global News Summary: 17 to 22 March 2025

United States

  • Shutdown Averted: The Senate passed a stopgap spending bill after Democrats withdrew opposition, avoiding a government shutdown.

  • Consumer Sentiment: Fell sharply to 57.9 in March (vs 63.1 expected, Feb: 64.7), with long-term inflation expectations hitting a 32-year high, indicating growing unease over tariffs and economic direction.

  • Federal Reserve: Revised down GDP growth forecast to 1.7% and raised inflation forecast to 2.7%. The dot plot indicated two rate cuts this year, conditional on inflation trends. Powell stressed that while the economy remains resilient, uncertainty from tariffs remains a key downside risk.

  • Tariffs & Trade: The Trump administration sanctioned two Chinese petrochemical firms, invoked wartime powers to boost domestic minerals output, and reiterated the 2 April tariff deadline on allies and China.

United Kingdom

  • Monetary Policy: The Bank of England held its base rate at 4.5%, with Governor Bailey warning against premature easing due to persistent price pressures.

  • Social Policy: The government backed away from freezing disability benefits amid Labour MP backlash. It also tabled plans to cut welfare spending to shore up public finances.

  • Regulatory Reform: Ministers are introducing performance targets for regulators to expedite tech adoption in AI, autonomous vehicles, and lab-grown proteins.

Eurozone

  • ECB Outlook: Vice-President Luis de Guindos compared the uncertainty from US trade policies to COVID-era disruptions. ECB member Villeroy de Galhau warned the US could trigger the next financial crisis through its tolerance of cryptocurrencies and shadow banking.

  • Geopolitical Shift: France and Germany unveiled plans for Europe to assume greater defence responsibilities from the US over a 5–10 year period, in response to Trump's shifting NATO stance.

  • Debt Issuance: The EU’s latest bond offering drew over €95 billion in bids, while a UK inflation-linked issuance broke demand records—highlighting investor appetite despite global tensions.

Japan

  • Inflation & Policy: Core CPI slowed to 3.0% in February (Jan: 3.2%) due to resumed energy subsidies. The BoJ is expected to maintain its policy rate at 0.5% on 19 March, with Governor Ueda preparing for gradual rate hikes.

  • Household Liquidity: Cash holdings fell to ¥105.3 trillion, down 3.4% year-on-year, the steepest drop on record as households draw on savings amid rising living costs.

Canada

  • Rate Policy: The Bank of Canada held rates at 2.75%, citing inflation risks from the trade war.

  • Politics: New Prime Minister Mark Carney is set to call a snap election for 28 April, buoyed by a rise in popularity after retaliatory tariffs and strong rhetoric against Trump.

  • Trade Retaliation: Ontario imposed a 25% surcharge on US electricity exports, affecting over 1.5 million US customers.

China

  • Retail Sales: Grew 4% YoY in Jan–Feb, beating expectations and accelerating from 3.7% in December, suggesting resilient domestic demand despite escalating tariffs.

  • Tariff Retaliation: Imposed 10–15% tariffs on $22 billion worth of US goods, including agricultural and defence-linked exports.

Economic Growth

  • US: Growth forecast cut to 1.7% for 2025 by the Federal Reserve.

  • France: Banque de France downgraded 2025 growth to 0.7%, citing global trade headwinds.

  • Spain: Upgraded 2025 GDP projection to 2.7%, supported by consumption.

  • Australia: Q4 GDP rose 0.6% QoQ, aligned with expectations.

Jobs

  • US: February non-farm payrolls rose 151,000, but unemployment increased to 4.1%, reflecting labour market cooling.

  • UK: Wage growth held steady at 5.9% YoY, though job growth remained tepid.

  • Japan: Spring wage negotiations yielded strong pay hikes, supporting BoJ’s policy stance.

Debt Securities

  • Yields:

    • US 10-year: 4.25% (▲1 bp)

    • UK 10-year gilt: 4.71% (▲7 bps)

    • German Bund 10-year: 2.77% (▼2 bps)

  • High investor demand was evident in recent sovereign debt auctions, particularly in Europe.

Artificial Intelligence

  • Google DeepMind released Gemini Robotics, enabling real-world reasoning and adaptability in robots.

  • Nvidia announced hundreds of billions in US semiconductor investment over four years amid geopolitical pressures.

  • OpenAI and Oracle began fitting their massive Texas data centre with Nvidia chips for their $100bn Stargate venture.

  • Perplexity AI aims to raise its valuation to $18bn, while Anysphere seeks $10bn for its AI-powered code assistant.

  • Meta is preparing to launch Llama 4 with advanced voice capabilities.

ESG & Resources

  • Gold hit an all-time high above $3,000/oz, before settling at $3,020.28, reflecting safe-haven demand amid market and geopolitical volatility.

  • Oil (WTI) rose modestly to $68.22 per barrel.

  • US invoked wartime production powers to boost minerals output, reducing dependence on China.

Inflation

  • US CPI slowed to 2.8% YoY in February (Jan: 3.0%), providing room for the Fed to consider future cuts.

  • UK Inflation is forecast to rise to 3.7% this year, despite a 2% January reading, largely due to energy costs and wage settlements.

  • Japan’s price pressures eased to 3.0%, aided by subsidies, but wage growth is sustaining upward momentum.

Recession Watch

  • US Recession Risk: Warnings intensified as consumer sentiment declined and tariffs weighed on spending. Despite Powell’s reassurance, many fear Trump's trade policy and spending cuts could trigger a downturn.

  • Markets:

    • S&P 500 ended the week flat after losing over $5 trillion in value over 16 sessions.

    • Nasdaq 100 rose 0.4% on Friday amid retail investor optimism.

    • Bitcoin fell to $83,911 and Ethereum to $1,974 amid risk-off sentiment.

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