RECAP
On Friday, markets experienced a sense of calm after a turbulent week dominated by tariff discussions. The lack of new tariff announcements from President Trump was interpreted by investors as a positive sign, with the absence of news being seen as beneficial for market stability.
The risk sentiment also received a boost from Germany, where Chancellor-in-waiting Friedrich Merz gained support from the Greens to revise the country’s debt brake, paving the way for a massive fiscal package valued at approximately 1 trillion euros—the largest since 1990.
Meanwhile, the British pound dipped following a surprising contraction in the UK economy, as revealed by January’s GDP data. Chancellor Reeves remarked that the country was “feeling the consequences” of a shifting global landscape.
The US dollar experienced a temporary decline after the release of the latest Michigan Consumer Sentiment report, which showed a drop to its lowest level since November 2022. The report also highlighted a sharp rise in inflation expectations, adding to concerns.
US Treasury Secretary Bessent commented on the recent decline in US equities during a TV interview, describing the falling stock prices as a healthy correction, although he did not rule out the possibility of a recession. President Trump, speaking over the weekend, reiterated that reciprocal tariffs will take effect on April 2. Market attention now shifts to today’s US Retail Sales data, with expectations for a recovery after last month’s disappointing numbers.
