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.