Morning wrap (19.03.2025)

9:39 am 19 March 2025

  • Asia-Pacific markets ended the day with slight gains, though the changes were not significant. Chinese stock indices rose between 0.10% and 0.30%, while Japan’s JP225 remained nearly flat (-0.04%). Meanwhile, Australia’s AU200cash gained 0.20%.

  • Futures for European indices indicate a mixed open for the cash session. CFD contracts are showing minor fluctuations of +/-0.05%. Germany’s DAX is down 0.05% after strong gains yesterday, while the UK100 is up 0.06%.

  • On the forex market, volatility remains low. The U.S. dollar index (USD) is up 0.20%, while EUR/USD is down 0.17%. Markets are awaiting today’s FOMC decision and Jerome Powell’s press conference, which will be the key event of the day and the week.

  • The Bank of Japan (BoJ) kept its interest rate at 0.5%, the highest level in 16 years, following the January rate hike. Further hikes may occur every six months, depending on economic conditions.

  • The BoJ statement emphasized economic uncertainty, particularly in the context of global trade policy. Core inflation is expected to reach the BoJ's target in the second half of the three-year forecast period. The USD/JPY rose slightly before the BoJ decision but stabilized afterward.

  • Japan’s seasonally adjusted industrial production index fell by 1.1% m/m in January, in line with expectations. However, on a yearly basis, the index rose 2.2% compared to January 2024.

  • Japan’s exports increased by 11.4% y/y in February, while imports declined slightly, leading to a trade surplus after two months of deficit. In February, Japan recorded a trade surplus of 584 billion yen, compared to a deficit of 415 billion yen a year earlier.

  • The export growth was partially driven by accelerated shipments ahead of upcoming U.S. tariffs, particularly in the automotive sector. Japan is concerned about potential new tariffs on cars that could take effect next month and is seeking an exemption from the U.S. administration.

  • President Donald Trump dismissed two commissioners from the U.S. Federal Trade Commission (FTC). The move was met with strong criticism from Democratic senators and antitrust groups, who fear that the decision was aimed at removing opposition within the agency.

  • China’s government stimulus efforts are helping rebuild confidence in the economy, but the effectiveness of these policies will depend on financial execution and reform implementation.

  • According to Goldman Sachs, the success of economic policies will hinge on how quickly the government channels support into the real economy. The main challenges for China remain weak demand in the real estate sector and uncertainties in global trade.

  • New Zealand’s Westpac-McDermott Miller Consumer Confidence Index fell to 89.2 in Q1 2025, down from 97.5 in Q4 2024. A reading below 100 indicates negative sentiment. The decline in confidence was driven by concerns over global trade wars and rising cost of living

  • Sentiment in the cryptocurrency market remains fragile. Bitcoin is attempting to rebound after yesterday’s declines, gaining 0.55% to $83,100.

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