Global Summary News: 17 to 22 Feb 2025

United Stares (USD)

Tariffs & Trade Policy:

• Trump announced new 25% tariffs on steel and aluminium imports, adding pressure on global trade.

• Automobile tariffs expected by April 2, increasing uncertainty in the auto sector.

• The US is considering 25% tariffs on pharmaceuticals, semiconductors, and chips.

• Trump claimed Apple CEO Tim Cook was considering moving manufacturing from Mexico to the US.

Economic Growth & Inflation:

• Inflation rose to 3.0% in January (expected: 2.9%) due to rising egg prices and avian flu impacts.

• Consumer sentiment and housing data missed expectations, raising concerns over economic slowdown.

• Long-term inflation expectations hit their highest since 1995, leading to market volatility.

• Retail sales dropped 0.9% in January, the biggest decline in nearly two years.

Federal Reserve & Debt Securities:

• Fed policymakers remain divided on the impact of Trump’s tariffs on inflation.

• Fed Governor Michelle Bowman called for more transparency in banking supervision.

• The 10-year Treasury yield fell to 4.43%, marking its sixth consecutive weekly decline as investors anticipate a rate cut by September.

Stock Market:

• The S&P 500 fell 1.7%, its worst trading session of 2025, while Nasdaq dropped 2.1%.

• Tech stocks declined, especially after concerns about the impact of tariffs on semiconductors.

• Meta extended its rally for 20 sessions, and Intel had its best week since 2000.

Cryptocurrency & Commodities:

• Bitcoin fell 3.2% to $95,032, while Ethereum dropped 4%.

• WTI crude fell 3.1% to $70.25 per barrel, indicating weaker energy demand.

United Kingdom (GBP)

Economic Growth & Employment:

• The UK economy grew 0.1% in Q4 2024, outperforming expectations of a 0.1% contraction, providing a modest boost to Labour’s economic policies.

• Bank of England Governor Andrew Bailey warned that underlying economic growth remains weak, despite the positive GDP figures.

• A CIPD survey found that 25% of UK employers plan to make redundancies before tax hikes in April, with 40% expecting significant cost increases due to higher national insurance and minimum wage hikes.

Trade & Tariffs:

• The UK threatened retaliatory tariffs on US products such as whiskey, jeans, and motorbikes if Britain is not exempted from Trump’s 25% steel and aluminium tariffs.

Eurozone (EUR)

Economic Policy & Growth:

• The European Commission plans to limit certain US food imports to match Trump’s reciprocal trade policy, potentially targeting US soybeans grown with pesticides banned in the EU.

• ECB Governing Council member Fabio Panetta signalled that rate cuts are nearing, as inflation risks are now tilted to the downside.

Germany & France:

• German investor confidence improved the most in two years, boosted by optimism over upcoming elections and interest rate cuts.

• German GDP grew 2.8% in Q4, with business spending and net trade driving expansion.

• French unemployment fell to 7.3% in Q4 (Q3: 7.4%), showing resilience despite political instability and rising debt.

• French PM Bayrou survived another no-confidence vote, securing approval for a delayed 2025 budget.

Stock Market:

• European defence companies hit record highs as investors bet on increased military spending amid geopolitical tensions.

• European equities saw the highest inflows since the Ukraine war, driven by optimism over peace talks between Washington and Moscow.

Japan (JPY)

Economic Growth & Inflation:

• Japan’s GDP grew 2.8% in Q4, surpassing expectations (consensus: 1.1%) due to business investment and exports.

• Japanese PPI rose 4.2% YoY in January, driven by higher rice and agricultural product prices.

Monetary Policy & Bonds:

• Bank of Japan officials signalled further rate hikes to contain inflation risks, pushing 10-year JGB yields to 1.31%.

Australia & New Zealand (AUD/NZD)

Monetary Policy:

• The Reserve Bank of Australia (RBA) cut interest rates by 25bps to 4.1%.

• The Reserve Bank of New Zealand (RBNZ) cut rates by 50bps to 3.75%, marking its third consecutive rate cut.

Consumer Confidence & Business Sentiment:

• National Australia Bank’s business confidence index rose 6 points to +4 in January.

• New Zealand’s new home price decline eased for the fifth month, signalling potential stabilisation in the property market.

China (CNY)

Trade & Business Environment:

• China imposed $14 billion in retaliatory tariffs on the US, escalating the trade war.

• President Xi Jinping assured business leaders, including Alibaba’s Jack Ma, of continued private sector support.

• China resumed antitrust investigations into US tech firms, including Google and Nvidia, amid escalating tensions with Trump.

• Manufacturing activity declined for a second straight month, highlighting the need for more stimulus.

Property Market:

• China’s decline in new home prices eased for the fifth month, showing tentative signs of market recovery.

Artificial Intelligence (AI)

Investment & Industry Developments:

• Dell Technologies is finalising a $5 billion AI server deal with Elon Musk’s xAI to supply Nvidia GB200-powered systems.

• Apple’s iPhones in China will use Alibaba’s AI technology.

• OpenAI’s ex-CTO Mira Murati launched a new AI start-up called Thinking Machines Lab, aiming to make AI systems more widely customisable and understandable.

• Elon Musk’s xAI unveiled Grok-3, claiming it is ten times more powerful than its predecessor.

Environmental, Social & Governance (ESG)

• Climate & Regulation:

• EU policymakers scaled back tech regulations to encourage AI investment rather than restrict Big Tech.

• A new scientific study found that global warming may breach the Paris Agreement’s 1.5°C limit sooner than expected.

Key Takeaways

• US tariffs continue to disrupt global trade, with Trump targeting steel, aluminium, cars, semiconductors, and pharmaceuticals.

• Inflation and economic slowdown fears intensified, with US inflation rising to 3% in January, while retail sales fell 0.9%.

• The Federal Reserve remains cautious on rate cuts, while ECB signals easing is near.

• Japan’s economy exceeded growth expectations, while Germany’s outlook improved ahead of elections.

• China retaliated with $14 billion in tariffs, adding to US-China trade tensions.

• AI investments surged, with major deals involving Dell, xAI, OpenAI, and Alibaba.

• European defence stocks hit record highs, reflecting increased military spending expectations.

• Cryptocurrency markets struggled, with Bitcoin dropping 3.2% and Ethereum down 4%.

Overall, global markets are facing significant uncertainty as governments navigate trade wars, inflation, and geopolitical risks, while AI investments and monetary policy shifts shape economic forecasts.

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Global Summary of News -10 to 15 February 2025