Asian Stocks Rise on Cooling US Inflation; Trade War Woes Persist

Economic

Summary:

Most emerging Asian equities traded in positive territory on Thursday, following the release of cooler US inflation data for February, although an escalating global trade war continues to loom.

The MSCI's gauge for emerging Asian equities rose as much as 0.6%, rebounding from a 0.4% drop at close on Wednesday.

Data from the US showed that consumer prices increased less than expected in February, but investors fret that the improvement is likely temporary against the backdrop of aggressive tariffs on imports that are expected to raise the costs of most goods in the months ahead.

However, the upbeat sentiment from cooling US inflation supported a rebound in emerging Asia stocks and currencies, according to Poon Panichpibool, market strategist at Krung Thai Bank.

Stocks in Kuala Lumpur rose the most, advancing around 1.5% and snapping a five-session losing streak, while Thai equities climbed nearly 0.3%.

On the other side, as April approaches, concerns over reciprocal tariffs have surfaced, with US President Donald Trump continuing to impose tariffs on neighbouring countries. This could potentially have a negative impact on assets in emerging Asia, Poon warned.

"Countries such as India, Thailand, Philippines ... collect higher tariffs from the US when we compare to what the US collects from them ... we could definitely face reciprocal tariffs for sure, which could be quite negative for EM Asia," he said.

Stocks in Indonesia slipped, falling as much as 0.7% in early trade as a few large banks, including Bank Mandiri (Persero) and Bank Rakyat Indonesia (Persero), pulled the benchmark lower.

A nearly 30% drop in Indonesian government revenues in January, which comes as President Prabowo Subianto implements big spending plans, has raised concerns about fiscal sustainability and a potential jump in borrowing.

Meanwhile, equities in Taiwan fell the most, dropping around 1.4%, dragged by TSMC.

In currencies, the Indian rupee and the Philippine peso rose about 0.2% each.

On the other hand, the South Korean won and the Taiwan dollar slipped around 0.1% each.

A rise in global trade tensions and worries over US recession risks have rattled global markets and sparked huge volatility in the foreign exchange market, as traders see-saw between relief and angst over Trump's whipsawing policy changes.

Source: Theedgemarkets

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Warren Takunda

Stocks

London stocks nudged up in early trade on Thursday as investors continued to mull the impact of Trump’s trade war.

At 0855 GMT, the FTSE 100 was up 0.1% at 8,545.91.

Investors were mulling the latest twists and turns in Trump's trade saga, after the US President said he would impose more tariffs following retaliatory measures from the European Union and Canada.

Trump said on Wednesday that he would respond to the countermeasures. "Whatever they charge us with, we're charging them," he said.

Richard Hunter, head of markets at Interactive Investor, said: "In early trade, investor apathy was largely in evidence, while the technical Thursday headwind of stocks being marked ex-dividend resulted in those affected, such as NatWest, Endeavour Mining and Entain.

"Meanwhile, the UK economy will face its latest test tomorrow on the release of the GDP figures, with the overhang of the Budget measures potentially beginning to gain traction."

Looking ahead to the rest of the day, the US producer price index for February is due at 1230 GMT.

In equity markets, NatWest and Entain were the biggest losers on the FTSE 100 as they traded without entitlement to the dividend.

C&C Group tumbled as the Bulmers cider maker said full-year underlying operating profits would be "modestly below" target amid weaker consumer confidence and the impact of higher wages and employer taxes introduced in the Budget.

Trainline slumped as the online ticketing platform said fiscal year sales hit a record of almost £6bn and announced a new £75m share buyback, as full-year net ticket sales and revenues fell a little short of expectations.

Savills was weaker despite the real estate agency posting a large jump in annual earnings and saying that transaction volumes this year would be lifted by companies ordering staff to spend more time in the office.

Deliveroo fell even as it hailed its first ever year of profit and positive free cash flow despite an "uncertain" consumer environment, as it expanded its grocery and retail offering.

On the upside, Halma surged as it said it now expects an adjusted EBIT margin modestly above 21% for the full year to March 2025, compared to prior guidance of around 21%.

Bridgepoint and Volution also gained after results, while IG Group rallied as the online trading and investment firm posted a rise in third-quarter revenues as it benefited from stronger market conditions and an increase in active clients.

Source: Sharecast

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Michelle

Commodity

West Texas Intermediate (WTI) crude Oil price remains subdued after two days of gains, trading around $67.40 per barrel during early European hours on Thursday. However, crude Oil could face headwinds as traders shift their focus to escalating global trade tensions.

US President Donald Trump threatened additional tariffs in response to the European Union’s (EU) retaliatory measures against the United States (US). After the US imposed a 25% tariff on European steel and aluminum, the EU countered with tariffs on €26 billion worth of US goods in April. Trump's aggressive stance on tariffs has unsettled investors, weakened consumer and business confidence, and heightened fears of a US recession.

Oil prices may also face downward pressure after the Organization of the Petroleum Exporting Countries (OPEC) reported a significant rise in February crude output, led by Kazakhstan. This increase highlights challenges for OPEC+ in maintaining adherence to agreed production targets, according to Reuters.

On the other hand, Oil found support on Wednesday as US data pointed to strong domestic demand and slowing inflation, easing investor concerns. Government figures showed US gasoline inventories dropped by 5.7 million barrels—far exceeding analysts' expectations of a 1.9 million-barrel decline—while distillate stocks also fell more than anticipated. This sharp decrease in gasoline inventories bolstered expectations for a seasonal demand surge in spring.

According to Reuters, JP Morgan analysts highlighted signs of robust US demand, along with Ukraine’s deployment of 377 drones targeting Russian energy infrastructure and military sites, as factors supporting Oil prices. "As of March 11, global Oil demand averaged 102.2 million barrels per day, growing by 1.7 million barrels per day year-over-year and exceeding our projected monthly increase by 60,000 barrels per day," they noted.

Source: FXSTREET

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Justin

Economic

Forex

USD/CAD regains positive traction and draws support from a combination of factors.

Fed rate cut bets continue to undermine the USD and cap the upside for the major.

The mixed technical setup warrants caution before placing aggressive directional bets.

The USD/CAD pair attracts some dip-buyers in the vicinity of mid-1.4300s during the Asian session on Thursday and reverses a part of the previous day's losses. Spot prices climb to the 1.4400 neighborhood in the last hour, though a combination of factors might keep a lid on any meaningful upside.

The Canadian Dollar (CAD) continues to be weighed down by the Bank of Canada's (BoC) seventh consecutive interest rate cut on Wednesday and the escalating US-Canada trade war. Apart from this, the lack of follow-through buying around Crude Oil prices undermines the commodity-linked Loonie and acts as a tailwind for the USD/CAD pair. However, the underlying bearish tone around the US Dollar (USD), amid bets that the Federal Reserve (Fed) will cut rates several times this year, caps the upside for the currency pair.

From a technical perspective, the USD/CAD pair, so far, has been struggling to find acceptance above the 1.4500 psychological mark and the subsequent slide warrants caution for bullish traders. That said, positive oscillators on the daily chart suggest that any further decline is likely to find decent support near the 100-period Simple Moving Average (SMA) on the 4-hour chart, currently pegged around the 1.4345 area. A sustained break below, however, might prompt aggressive selling and pave the way for deeper losses.

The USD/CAD pair might then weaken further below the 100-day SMA, around the 1.4215 area, the 1.4200 mark, towards testing the year-to-date low, around the 1.4150 region set on February 14. Spot prices could eventually drop to the 1.4100 round-figure mark.

On the flip side, a sustained strength beyond the 1.4500 mark could allow the USD/CAD pair to test the monthly swing high, around the 1.4540-1.4545 region. Some follow-through buying could lift spot prices to the 1.4600 round figure en route to the 1.4670 region and the 1.4700 mark. The momentum could extend further towards the 1.4800 neighborhood, or the highest level since April 2003 touched last month.

USD/CAD 4-hour chart

Source: FXSTREET

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Justin

Economic

Stocks

The models are the brains behind Gemini, Google’s rival to ChatGPT and DeepSeek

Shares of Google parent company Alphabet (NASDAQ:GOOG) popped by close to 2% on Wednesday following the unveiling of Gemma 3, the tech giant’s new advanced AI models.

The FANG stock’s market price was up more than 1.8% by Wednesday afternoon, recovering from a drop-off in early morning trading and rising steadily throughout the day.

The bounce represents somewhat of a correction for Alphabet, with the stock having begun the day roughly 4% down from the same time last week.

Gemma 3 is an update on the models used to run Google’s Gemini AI chatbot, which was launched in 2024. They are intended to be used by developers in creating AI-powered applications. The technology is capable of analyzing text, video and images, with support across 35 languages.

The company is describing the new version of Gemma as “the world’s best single-accelerator model”, outperforming similar models created by DeepSeek, OpenAI, and Meta.

Google is also calling Gemma 3 “the most capable model you can run on a single GPU or TPU”.

Crucially, Google’s Gemma models are open-souce, meaning they are publicly accessible for anyone to use and modify.

Market favoring low-hardware AI tech

Google’s share price jump following the unveiling of Gemma 3 is consistent with recent market trends, which appear to favor AI technology with lower hardware requirements.

Chinese newcomer DeepSeek is perhaps the most stark example of this. The firm launched its R1 model in January and caused immediate disruption, posing a threat to U.S. AI firms whose models rely on high-end chips and considerable computing power.

Indeed, the launch of R1, which reportedly cost less to develop than ChatGPT, promptly sent the NASDAQ 100 and S&P 500 down 4% and 2.5%, respectively.

The emergence of DeepSeek has also coincided with rising tensions between the U.S. and China, with President Donald Trump continuing to threaten hefty tariffs on Chinese exports.

Source: FXSTREET

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Glendon

Economic

Forex

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against its six major peers, remains steady after registering gains in the previous session, trading around 103.60 during the Asian hours on Thursday. However, the technical analysis of the daily chart indicates a persistent bearish bias, with the index moving downwards within a descending channel pattern.

The US Dollar Index is trading below the nine- and 50-day Exponential Moving Averages (EMAs), indicating a weakening short- and medium-term trend. However, the 14-day Relative Strength Index (RSI) remains below 30, suggesting oversold conditions and the potential for an upward correction.

On the downside, the US Dollar Index may test its primary support at the four-month low of 103.34, recorded on November 6, followed by the lower boundary of the descending channel at 103.00. A break below this critical support zone could strengthen the bearish outlook, pushing the index toward the five-month low of 100.68.

The DXY may encounter initial resistance at the nine-day EMA at 104.34. A break above this level could strengthen short-term price momentum, pushing the index toward the 50-day EMA at 106.44, followed by the upper boundary of the descending channel at 106.70.

US Dollar Index: Daily Chart

Source: FXSTREET

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ING

Economic

The Monetary Policy Council did not change the interest rates, while the statement is in our driven by somewhat unrealistic inflation fears. The statement indicates that Thursday's press conference will also maintain a hawkish tone.

The Monetary Policy Council (MPC) kept all interest rates unchanged today. The debate was heated, as the decision was announced much later (1 hour and 45 minutes later than in February and 42 minutes later than in January). This signals growing differences of opinion within the MPC, which is also evident in public interviews with Council members. The reference rate remains at 5.75%.

We perceive the tone of the official statement after the MPC meeting as hawkish, even more so than in previous months. This is evidenced by:

The National Bank of Poland (NBP) still presents a bleak scenario for energy prices and an average CPI in 2025 at 4.9% year-on-year, in line with the mini-projection presented by the governor in February. Also, we have not seen an alternative projection with flat energy prices in the fourth quarter of 2025 (as signalled by the ministry), which also presents a hawkish bias.The statement with the view on future CPI includes a section on persistently high core inflation was additionally supplemented by the context of "further economic recovery, with a marked increase in domestic demand," also indicating heightened concerns of the Council about inflation rising this year.The CPI projection for 2026 is higher than the last November projection, which also assumed an increase in electricity prices in the fourth quarter.

The next to watch by investors will be Thursday's press conference by Governor Glapiński. Interestingly, the the previous months hawkish comments by the NBP governor are still not reflected in market valuations. The rates market is pricing in around 90 basis points of NBP rate cuts by the end of 2025, and these expectations have slightly increased compared to the February meeting.

We expect the NBP governor to strongly emphasise inflation risks, including regulated price increases and the (low probability) scenario of a spike in energy prices in the fourth quarter (the Minister of Climate signals that energy prices should not rise). Glapiński will also place significant emphasis on high wage dynamics and persistent service price inflation. At the same time, we believe he will pay little attention to factors driving low inflation, such as the strong złoty (especially against the dollar) or falling oil prices. He will likely balance this with arguments about ongoing economic recovery and fiscal expansion.

In our opinion, the current level of interest rates is increasingly impacting the economy through the credit channel and the strong złoty. Demand for credit remains weak, and businesses, analysing the cost of credit, compare it to the last decade of super-low interest rates. The strong PLN also has a cooling effect on exporters. The declared profitability exchange rate for exports is 4.00/€, but it has significantly shifted downwards along with the current rate. For the first time in many years, the current €/PLN rate is so close to the profitability exchange rate for exports. This, combined with still weak economic conditions in Germany, discourages exporters from investing, who have shown above-average investment expenditures in the past.

Persistently high core inflation suggests caution in reducing interest rates, but our models indicate that core inflation will start to decline in 2026.

Taking all factors into account, we see room for slight fine-tuning and reduction in the restrictiveness of monetary policy and rate cuts of 50-100 basis points. A change in the MPC's stance is possible only in mid-2025, after the CPI peak and when we know the results of the electricity tariff revision, which we believe will stabilise household electricity prices, rather than the spike currently assumed by the NBP.

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Asian Stocks Rise on Cooling US Inflation; Trade War Woes Persist

Source: Theedgemarkets

London Open: FTSE Nudges Higher as Trade War Ramps Up

Source: Sharecast

WTI Remains Below $67.50 as Escalating Trade Tensions Overshadow Potential Demand Boost

Source: FXSTREET

USD/CAD Price Forecast: Advances to 1.4400 Neighborhood; Lacks Bullish Conviction

Source: FXSTREET

Google Stock Bounces as “world’s Best” Ai Model Unveiled

Source: FXSTREET

US Dollar Index Price Forecast: Tests Immediate Support at 103.50 Near Four-Month Lows

Source: FXSTREET

National Bank of Poland Rates on Hold and a Hawkish Press Conference Expected

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