EXECUTIVE SUMMARY
Fig 1: USD BBDXY Index & 10yr Yield
Source: MNI - Market News/Bloomberg/Refinitiv.
UK
UKRAINE (BBC): “Sir Keir Starmer has told MPs that US President Donald Trump's commitment to achieving peace in Ukraine is "sincere". The prime minister said Europe would have to do "the heavy lifting" as part of a peace deal but reiterated that a peacekeeping force would need "strong US backing".”
EU
US/UKRAINE (BBG): “President Donald Trump ordered a pause to all military aid to Ukraine, turning up the heat on Volodymyr Zelenskiy just days after an Oval Office blowup with the Ukrainian president left the support of his country’s most important ally in doubt.”
UKRAINE (BBC): “A statement by Ukrainian President Volodymyr Zelensky saying a deal to end the war with Russia was "very far away" has drawn a furious response by Donald Trump. "America will not put up with it for much longer," the US president said in a social media post, before accusing Zelensky of not wanting peace.”
GERMANY (POLITICO): “Germany’s likely next chancellor said Monday that the bitter clash between Ukrainian President Volodymyr Zelenskyy and United States President Donald Trump in the Oval Office last week was a “deliberate escalation” by the latter.”
FRANCE (POLITICO): “French Prime Minister François Bayrou on Monday declared the alliance with the U.S. is seriously wounded and called President Donald Trump’s attitude toward Ukraine “an indecency.””
US
TARIFFS (WSJ): “The U.S. imposed 25% tariffs on Mexico and Canada early Tuesday morning, along with imposing an additional 10% tariffs on Chinese imports. The 25% tariffs will apply to all imports from Mexico and Canada, with the exception of energy products such as crude oil and natural gas, which will be tariffed at 10%."
FED (MNI BRIEF): Federal Reserve Bank of St. Louis President Alberto Musalem said Monday his baseline outlook is for further disinflation but risks are skewed to the upside.
FED (MNI BRIEF): Federal Reserve officials can afford to be patient about deciding what to do next on interest rates because economic growth is strong and inflation remains above target, St. Louis Fed President Alberto Musalem said Monday.
FED (MNI BRIEF): New estimates of the natural rate of interest or r-star show the measure has likely risen by a quarter or half percentage point since the pandemic, according to a blog co-authored by New York Fed President John Williams, published Monday. R-star is the real short-term interest rate expected to prevail when an economy is at full strength and inflation is stable.
UKRAINE (DW): “"If you want real security guarantees, if you want to actually ensure that Vladimir Putin does not invade Ukraine again, the very best security guarantee is to give Americans economic upside in the future of Ukraine," Vance said in the interview for the Fox News broadcaster.”
OTHER
JAPAN (MNI BRIEF): Combined capital investment by non-financial Japanese companies excluding software rose 0.5% q/q in Q4, slowing from 1.1% in Q3, a quarterly revised survey released by the Ministry of Finance Tuesday showed. The MOF survey, based on the demand side, is the key to calculating Q4 GDP revisions due March 11 and indicated that capex will be revised lower from the preliminary 0.5% estimate, based solely on supply side data.
CANADA (MNI BRIEF): Canadian Prime Minister Justin Trudeau said Monday night the government will almost immediately retaliate against U.S. tariffs if they come into force as President Donald Trump has indicated, opening up a trade war between two of the world's largest trading partners unseen since the 1930s.
AUSTRALIA (MNI BRIEF): Weaker inflation and wages, and less concern over the non-market job sector alongside uncertainty over U.S. government policies drove the Reserve Bank of Australia Board to cut the cash rate 25 basis points to 4.10% at the February meeting, the published minutes showed Tuesday.
NEW ZEALAND (MNI): A former RBNZ economist shares his OCR outlook. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA
US/CHINA (MOFCOM): “China will take countermeasures to safeguard its interests and hopes the U.S. can return to the right track of properly resolving differences via dialogue as soon as possible, said the spokesperson for the Ministry of Commerce, following the U.S. imposing an additional 10% tariff on Chinese goods starting Mar 4.”
DEPOSIT RATES (SECURITIES DAILY): “A number of small and medium-sized banks have started reducing deposit interest rates to shore up their profitability, with some cutting their rates by up to 50 basis points, Securities Daily reported on Tuesday.”
CHINA MARKETS
MNI: PBOC Net Drains CNY280.3 Bln via OMO Tuesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY38.2 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net drain of CNY280.3 billion after offsetting the maturity of CNY318.5 billion today, according to Wind Information.
MNI: PBOC Sets Yuan Parity Lower At 7.1739 Tues; -1.30% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1739 on Tuesday, compared with 7.1745 set on Monday. The fixing was estimated at 7.2782 by Bloomberg survey today.
MARKET DATA
UK FEB. BRC SHOP PRICE INDEX -0.7% Y/Y; EST. -0.6%; JAN. -0.7%
AUSTRALIA JAN. RETAIL SALES +0.3% M/M; EST. 0.3%; DEC. -0.1%
AUSTRALIA Q4 NET EXPORTS +0.2% PTS TO GDP; EST. -0.1%; Q3 +0.1%
AUSTRALIA Q4 CURRENT ACCOUNT DEFICIT A$12.5B; EST. -A$12.0B; Q3 –A$13.9B
AUSTRALIA Q4 PUBLIC SECTOR DEMAND TO CONTRIBUTE 0.2%-PT TO GDP; Q3 +0.7%
NEW ZEALAND JAN. BUILDING PERMITS +2.6% M/M; DEC. -5.6%
JAPAN Q4 CAPITAL SPENDING -0.2% Y/Y; EST. 5.0%; Q3 +8.1%
JAPAN Q4 COMPANIES' SALES +2.5% Y/Y; EST. +3.0%; Q3 +2.6%
JAPAN Q4 COMPANIES PROFITS +13.5% Y/Y; EST. +0.3%; Q3 -3.3%
JAPAN JAN. JOBLESS RATE 2.5%; EST. 2.4%; DEC. 2.5%
JAPAN JAN. JOB-TO-APPLICANT RATIO 1.26; EST. 1.25; DEC. 1.25
JAPAN MONETARY BASE FEB. -1.8% Y/Y; EST. -1.8%; JAN. -2.5%
SOUTH KOREA JAN. INDUSTRIAL OUTPUT -2.3% M/M; EST. -3.1%; DEC. +3.9%
SOUTH KOREA JAN. INDUSTRIAL OUTPUT -4.1% Y/Y; EST. -2.0%; DEC. +4.4%
SOUTH KOREA JAN. CYCLICAL LEADING INDEX -0.3 PT M/M; DEC. -0.1
SOUTH KOREA FEB. S&P GLOBAL MFG PMI 49.9; JAN. 50.3
MARKETS
US TSYS: Tsys Curves Steepen, 10yr At Four-Month Low Following Tariffs
JGBS: Early Gains Reversed After Poor 10Y Auction, BoJ Dep Gov Speech Tomorrow
JGB futures are weaker, -10 compared to settlement levels, after gapping lower in early afternoon trade following today’s 10-year auction results.
AUSSIE BONDS: Richer But Off Bests, Q4 GDP Tomorrow
ACGBs (YM +6.0 & XM +5.0) are stronger but off session bests.
NZGBS: Richer But Off Bests & Underperformed $-Bloc
NZGBs closed 3bps richer but in the middle of today’s ranges.
ASIA STOCKS: Equities Track Wall Street's Sell-Off Following Tariffs Headlines
Asian equities fell sharply as trade tensions escalate, doubling tariffs on Chinese imports to 20% and imposing 25% levies on Canada and Mexico. This sparked fears of a broader trade war, with Japan's Nikkei and Hong Kong’s Hang Seng leading declines. Indian equities extended their selloff, with the NSE Nifty 50 Index nearing a record 10-day losing streak as global funds continued to pull out. Auto and chip stocks were hit hardest, particularly in Japan and South Korea, while Chinese EV makers slumped following BYD’s large share placement. Investors are closely watching China’s National People’s Congress for potential stimulus measures and trade responses.
OIL: Crude Continues Decline On OPEC Plans & Upcoming US Tariffs
Oil prices fell sharply on Monday after reports that OPEC will surprisingly go ahead with its output normalisation from April. They have continued declining during today’s APAC session. The IEA is forecasting a global oil surplus in 2025 even if OPEC left its production unchanged. The market is also worried about the impact of US tariffs and retaliatory measures on global demand.
Gold Consolidates Last Night’s Gains
FOREX: Yen and CNH Outperform, AUD/USD Back Sub 0.6200
The USD BBDXY index is little changed in the first part of Tuesday dealings, with the index last near 1293. This has masked some divergent trends, with yen and to a lesser extent CHF outperforming higher beta plays, particularly the AUD.
UP TODAY (TIMES GMT/LOCAL)
Date | GMT/Local | Impact | Country | Event |
04/03/2025 | 0700/1500 | ![]() | Chinese People's Political Consultative Conference | |
04/03/2025 | 1000/1000 | ** | ![]() | Gilt Outright Auction Result |
04/03/2025 | 1000/1100 | ** | ![]() | Unemployment |
04/03/2025 | 1355/0855 | ** | ![]() | Redbook Retail Sales Index |
04/03/2025 | 1630/1130 | * | ![]() | US Treasury Auction Result for Cash Management Bill |
04/03/2025 | 1920/1420 | ![]() | New York Fed's John Williams | |
05/03/2025 | 2200/0900 | * | ![]() | S&P Global Final Australia Services PMI |
05/03/2025 | 2200/0900 | ** | ![]() | S&P Global Final Australia Composite PMI |
05/03/2025 | 0030/0930 | ** | ![]() | S&P Global Final Japan Services PMI |
05/03/2025 | 0030/0930 | ** | ![]() | S&P Global Final Japan Composite PMI |
05/03/2025 | 0030/1130 | *** | ![]() | Quarterly GDP |
05/03/2025 | 0100/0900 | ![]() | National People's Congress opens | |
05/03/2025 | 0145/0945 | ** | ![]() | S&P Global Final China Services PMI |
05/03/2025 | 0145/0945 | ** | ![]() | S&P Global Final China Composite PMI |
05/03/2025 | 0730/0830 | *** | ![]() | CPI |
05/03/2025 | 0745/0845 | * | ![]() | Industrial Production |
05/03/2025 | 0815/0915 | ** | ![]() | S&P Global Services PMI (f) |
05/03/2025 | 0815/0915 | ** | ![]() | S&P Global Composite PMI (final) |
05/03/2025 | 0845/0945 | ** | ![]() | S&P Global Services PMI (f) |
05/03/2025 | 0845/0945 | ** | ![]() | S&P Global Composite PMI (final) |
05/03/2025 | 0850/0950 | ** | ![]() | S&P Global Services PMI (f) |
05/03/2025 | 0850/0950 | ** | ![]() | S&P Global Composite PMI (final) |
05/03/2025 | 0855/0955 | ** | ![]() | S&P Global Services PMI (f) |
05/03/2025 | 0855/0955 | ** | ![]() | S&P Global Composite PMI (final) |
05/03/2025 | 0900/1000 | *** | ![]() | GDP (f) |
05/03/2025 | 0900/1000 | ** | ![]() | S&P Global Services PMI (f) |
05/03/2025 | 0900/1000 | ** | ![]() | S&P Global Composite PMI (final) |
05/03/2025 | 0930/0930 | ** | ![]() | S&P Global Services PMI (Final) |
05/03/2025 | 0930/0930 | *** | ![]() | S&P Global/ CIPS UK Final Composite PMI |
05/03/2025 | 1000/1100 | ** | ![]() | PPI |
05/03/2025 | 1000/1100 | * | ![]() | Retail Sales |
05/03/2025 | 1000/1000 | ** | ![]() | Gilt Outright Auction Result |
05/03/2025 | 1000/1000 | ** | ![]() | Gilt Outright Auction Result |
05/03/2025 | 1200/0700 | ** | ![]() | MBA Weekly Applications Index |
05/03/2025 | 1315/0815 | *** | ![]() | ADP Employment Report |