Weekly Recap

United States (US)

The US Services PMI rose to 53.5 in February, indicating continued expansion in the services sector. However, input prices increased due to newly implemented tariffs, which have sparked inflation concerns.

On March 4, 2025, the US imposed a 25% tariff on Canada and Mexico and increased tariffs on China to 20%. These measures are part of ongoing trade tensions and will likely impact economic dynamics.

In response, Canada imposed retaliatory tariffs on US goods, with Mexico expected to announce its countermeasures by March 9, 2025. Meanwhile, China criticized the US tariffs, deeming them a violation of WTO rules, and imposed up to 15% retaliatory tariffs on US agricultural goods, signaling a potential trade war.

The ADP National Employment Report revealed that 77,000 jobs were added in the US private sector, well below the expected 148,000. This marks the smallest job growth since mid-2024, hinting at a possible economic slowdown exacerbated by tariff-related uncertainties.

US initial jobless claims totaled 221,000, which was lower than the expected 235,000, indicating a somewhat stable labor market despite broader economic concerns.

The US international trade balance for January showed a deficit of —$131.4 billion, worse than the expected —$127.4 billion. This reflects challenges in the trade sector amid rising tariffs and trade tensions.

President Donald Trump introduced a plan for a strategic cryptocurrency reserve for the US, aimed at enhancing the nation’s role in global digital finance. This reserve would include leading cryptocurrencies like Bitcoin, Ethereum, and others such as XRP, Solana, and Cardano. The plan has sparked mixed reactions, with proponents seeing it as a boost for the crypto sector, while critics point to the instability of digital currencies and potential financial risks.

Analysts forecast a 150,000 job increase for nonfarm payrolls for February 2025, a drop from prior months due to trade policy and tariff uncertainties, hinting at employer caution. The unemployment rate is expected to remain at 4.0%, signaling labor market steadiness. These stats will shed light on job market health and may sway Federal Reserve expectations amid trade tensions.

Eurozone

The Eurozone Composite PMI remained at 50.2 in February, reflecting stagnant growth. The services sector expanded slightly, while manufacturing remained weak, signaling a sluggish economic environment.

The Eurozone Consumer Price Index (CPI) increased by 0.5% MoM and 2.4% YoY, driven by rising food prices, particularly in Spain and Italy, while energy prices remained stable.

The European Central Bank (ECB) cut its key interest rates by 25 basis points, marking the sixth consecutive rate cut. This aims to boost economic activity and align inflation with the ECB's target of 2%.

Expectations for further ECB rate cuts have been reduced. Analysts now anticipate two rate cuts in 2025, contributing to a rally in the EUR/USD exchange rate.

Germany’s Federal Statistics Office revealed that industrial orders dropped by 7% month-over-month in January 2025, far exceeding the 2.8% decline forecasted by analysts. This sharp fall in orders indicates persistent difficulties in Germany’s manufacturing industry, which could ripple through the broader economy.

Nevertheless, the government’s recent deal to revise state borrowing limits, enabling increased defense funding and a €500 billion commitment to infrastructure over the next ten years, could offer a buffer for economic growth moving forward.

China

China opposed the US tariffs, calling them a violation of WTO rules. In retaliation, China imposed up to 15% retaliatory tariffs on US agricultural products. This escalation in trade tensions has raised concerns about a potential trade war between the two largest economies in the world.

China’s response is likely to have broader economic implications, particularly in the agricultural sector, and could further dampen global trade activity, contributing to global uncertainty.

Mexico & Canada

Both Canada and Mexico are taking retaliatory actions in response to the new tariffs imposed by the US. Canada has already implemented tariffs on US goods, and Mexico is expected to announce its countermeasures on March 9, 2025. These retaliatory measures could strain economic relations and trade flows between these nations and the US.

Japan

The yield on the 10-year Japanese government bond increased to 1.51%, its highest level since 2009, indicating a shift in Japan’s bond market dynamics. This change suggests a potential shift in economic and interest rate expectations in Japan, although the country remains focused on stimulating domestic economic growth.