- March 28, 2025
- Posted by: Melanie Scott
- Category: Market News
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Market Update: Week in Review
Monday
- US: The economy showed mixed signals as a resilient services sector offset renewed weakness in manufacturing. Flash Manufacturing PMI slipped into contraction at 49.8 (vs. 51.9 expected), while Flash Services PMI surged to 54.3 (vs. 51.2), marking its strongest expansion in months. The data underscores ongoing concerns about uneven growth, with businesses citing soft demand and policy uncertainty as headwinds.
- Canada: Q4 GDP grew 0.6%, reflecting modest economic momentum. However, a drop in the business opening rate to 4.7% (matching closures) signals weakening business confidence.
- France: Despite an uptick in both Manufacturing PMI (48.9 vs. 46.2 expected) and Services PMI (46.6 vs. 46.3), the French economy remains in contraction for a seventh consecutive month. Weak demand and rising job losses continue to weigh on sentiment, pushing business confidence to a five-year low.
- Germany: Manufacturing PMI climbed to a 31-month high at 48.3 (vs. 47.1), suggesting tentative stabilization, while Services PMI stagnated at 50.2 (vs. 52.3). Encouragingly, business activity posted its fastest growth in 10 months, and manufacturing output expanded for the first time in nearly two years—offering a glimmer of hope for Europe’s largest economy.
- UK: The divergence between manufacturing and services widened. Manufacturing PMI tumbled further to 44.6 (vs. 47.3), as export orders saw their steepest drop since August 2023, weighed down by global uncertainty and potential US tariffs. In contrast, Services PMI jumped to 53.2 (vs. 51.2), the fastest expansion since August 2024, reflecting strong domestic demand.
Tuesday
- Australia: Monthly CPI slowed to 2.4% YoY in February (vs. 2.5% prior), reinforcing the view that inflation is cooling within the RBA’s target range. With the next rate decision approaching, markets are pricing in a steady hand from policymakers, though they remain wary of sticky service inflation.
Wednesday
- UK: Inflation relief arrived as CPI eased to 2.8% YoY in February (vs. 3.0% prior), marking further progress toward the Bank of England’s 2% target. This decline strengthens the case for a rate cut later in 2025, though policymakers may remain cautious given persistent wage growth pressures.
- US: President Trump set markets on edge with cryptic remarks ahead of his anticipated tariff announcement, stating, “People will be pleasantly surprised on April 2”. However, he confirmed a 25% tariff on autos not manufactured in the US, heightening trade war concerns as investors brace for potential retaliatory measures.
Thursday
- US: The economy maintained solid momentum in Q4, with GDP expanding at a 2.4% annualized pace, largely driven by a year-end surge in consumer spending. However, the labor market showed signs of resilience, as initial jobless claims edged down to 224K, reflecting ongoing tightness. The data paints a picture of an economy still holding up but facing potential turbulence from higher rates and trade policy risks.
Friday Morning
- UK: Retail sales volumes rose 1.0% in February, following a 1.4% gain in January (revised down from 1.7%). The rebound suggests that consumers remain relatively upbeat despite cost-of-living pressures, though spending may moderate as higher borrowing costs bite.
- Canada: GDP expanded 0.4% in January, accelerating from December’s 0.3% gain. Growth was broad-based, with 13 of 20 industries posting gains, signaling a steady start to the year.
- US: Core PCE inflation—widely watched by the Fed—came in at 0.4% MoM (vs. 0.3% expected), a reminder that inflationary pressures remain sticky. With growth slowing and inflation running hot, concerns about stagflation continue to creep into market conversations.
Current Market Conditions:
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