General Market Analysis – 28/03/25

Stocks Tumble on More Tariff Concerns – Nasdaq Down 0.5%

Global stock markets fell in trading yesterday as investors continued to digest more tariffs from President Trump and potential counter-tariffs from those targeted. The three major US stock indices all fell: the Dow dropped 0.37%, the S&P 0.33%, and the Nasdaq led the way lower again, losing 0.53% by the close. The dollar took a hit, with the DXY down 0.36% to 104.28, and USDJPY noticeably pushing back to monthly highs above 151.00. US Treasury yields had a mixed day, the shorter end falling off—the 2-year down 2.7 basis points to 3.990%—while the longer-term yields pushed back to monthly highs, the benchmark 10-year up 0.7 basis points to close at 3.359%. Oil prices pushed higher again on supply concerns, Brent up 0.35% to $74.05 and WTI up 0.39% to $69.92 a barrel, whilst gold surged to another new high on the back of more market uncertainty, closing the day up 1.25% at $3,059.55 an ounce.

Gold Continues to Shine in Uncertain Markets

Gold prices surged to yet another new high in trading yesterday as market uncertainty over tariffs and a potential global trade war again pushed funds towards the world’s favourite haven product. Tariffs on automobiles from the US to a raft of countries have been the main catalyst for the move this time around, and counter-tariffs could see an escalation to a full global trade war, which could see the precious metal drive even higher. The next major hurdle for further top-side moves is tonight’s key US Core PCE data, with a higher print than the expected 0.3% increase likely to lead to some dollar buying, which could see gold levels pull back along with Fed rate cut expectations. However, the opposite is also true, and a weaker number—which could bring expectations of a Fed cut closer—could combine with geopolitical uncertainty to push gold higher faster and challenge the next big figure up at $3,100 an ounce in relatively short order.

Inflation Data in Focus Again Today

There is some major inflation data due out across the trading sessions again today, but the jury is still out on whether it will supersede the impact of geopolitical updates in the current market environment. The focus in the Asian session today will be on Japanese markets, with the release of the closely monitored Tokyo Core CPI numbers due out early in the session. Market expectation is for the year-on-year data to show a 2.2% increase, and anything significantly off this print will see strong moves in the yen. The focus will be back on UK markets at the European open, with retail sales numbers (exp -0.3% m/m) the highlight of the morning data drop. However, the major focus for the day will come early in the New York session with the release of the Fed’s favoured inflation indicator, the Core PCE Price Index. Expectation is for a 0.3% month-on-month increase, and anything off from this print will see big moves in the market. Canadian GDP numbers and revised University of Michigan data are also due out during the session, but expect the impact of the US inflation numbers to dominate sentiment.

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