Quarterly Outlook
Macro outlook: Trump 2.0: Can the US have its cake and eat it, too?
John J. Hardy
Global Head of Macro Strategy
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Morning Brew March 12 2025
Erik Schafhauser
Senior Relationship Manager
Summary: Ceasefire in Ukraine possible, Will the US CPI matter?
Good morning,
Insecurity about the massive economic and political shift remain in the forefront
US Indexes failed to achieve a strong recovery yesterday , they closed lower again: the Dow lost 1.14% the S&P -0.76% and the Nasdaq 0.18% in massive volumes (19 billion)
The Magnificent 7 traded mixed with Tesla the biggest gainer after the massive Monday selloff.
Headlines:
- Ukraine: Ukraine agreed to a 30 day ceasefire and the US resume military aid on the news, the Russian side still needs to agree.
- Tariffs US duty rate on steel, aluminum rises to 25% and took effect at midnight. DJT reiterated more tariffs may be coming and that the US Economy would benefit from them. Retaliation is swift with the EU already putting new tariffs on US goods in place.
- ECB Policy review: The ECB is conducting a largescale policy review that will be published in a few months.
US 10 Year Yields hold at 4.26 while the European 10 Years are below the key 3% resistance at 2.9%. An easy way to keep track of the EU Yields is to look at the Bund Future FGBLc1, it is the inverted yield.
EURUSD traded higher yesterday but corrected neat 1.0950 to now 1.0890, USDJPY is 148.30 and GBPUSD 1.2920.
The US CPI is the key economic release of the day, expected at 2.9% and the Core at 3.2%. Due to the 5 hour difference to New York, the number is being released at 13:30 CET.
Politics, especially any news on a ceasefire in Ukraine and tariffs will be closely watched.
Koen wrote a great explainer on the basics of Volatility, a topic that should not be ignored: Volatility for Investors eXplained: what's going on and should you be worried?
Market volatility has surged, with the VIX closing at 26.92 amid concerns over Trump’s tariff threats and geopolitical uncertainty. While short-term traders react to rising volatility, history shows that the VIX is mean-reverting, suggesting that long-term investors should stay focused on fundamentals rather than short-term fear.
Wednesday, March 12, 2025
- US CPI
Thursday, March 13, 2025
- Eurozone: Industrial Production MoM/YoY (Jan).
- U.S.: Producer Price Index (PPI) Final Demand (Feb).
Friday, March 14, 2025
- UK GDP
- U.S.: University of Michigan Consumer Sentiment Prelim (Mar).
- China: New Yuan Loans and Total Social Financing (Feb).
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