Morning Wrap (21.03.2025)

Asian stocks stumble as global outlook clouds with Hong Kong tech stocks sliding around 3% after a recent rally and HK.cash 1.6% lower. A broader index of Chinese stocks headed for its steepest two-day drop since November, while shares in Indonesia and Taiwan also fell. Japanese stocks edged higher, and US futures remained largely steady.

Global markets brace for Trump tariffs set to come into force on April 2. The US President confirmed both broad reciprocal tariffs and additional sector-specific tariffs will be implemented, injecting "a wave of uncertainty" into markets according to Principal Asset Management.

Corporate earnings signal economic headwinds as FedEx slashed its profit outlook citing higher costs and weakening demand. Nike also pointed to tariffs and geopolitical tensions impacting earnings, while PDD Holdings acknowledged growing global uncertainty despite beating expectations.

Central bank signals create more questions than answers after policy meetings by the Federal Reserve, Bank of Japan and Bank of England. All three pointed to tariffs as obscuring economic outlooks, worsening investor sentiment that markets are "flying blind" into April 2.

EU delays whiskey tariff on American imports and signals readiness to talk with Trump before making further decisions on retaliatory measures, according to Ireland's deputy prime minister.

Trump repeats calls for Fed rate cuts in social media posts claiming egg and gasoline prices have fallen. Fed Chair Powell indicated the central bank is "not going to be in any hurry to move" amid tariff uncertainties, maintaining projections of two quarter-point cuts this year.

OPEC+ announces new cut plan for seven members to reduce output further to compensate for overproduction. The plan represents monthly cuts between 189,000-435,000 bpd until June 2026.

Dollar strengthens against major currencies with the dollar index rising 0.21% to 104.01 after strengthening 0.36% on Thursday. The euro slipped 0.18% to $1.0831, while USD/JPY rose 0.42% to 149.40 despite stronger Japanese inflation data.

Gold retreats from record highs falling 0.5% to $3,029.61/oz under pressure from a stronger dollar, though prices remained above the $3,000 milestone as safe haven demand persists.

Oil prices climb on supply concerns with Brent up 0.3% to $71.75 and WTI rising 0.4% to $68.38, heading for second consecutive weekly gains of about 2% each.

Germany to vote on economic growth package with the Bundesrat expected to approve a 500 billion euro fund for infrastructure and defense spending. The vote is the final hurdle before the legislation is signed into law.

Bitcoin edges lower falling 1.7% to $84,424.5 as broader crypto prices retreat amid economic uncertainty. XRP shows relative strength after the SEC dropped its case against Ripple.