US Labor data will be released tonight at 8:30 PM (GMT+7) with a mixed projection between each data. Here are things you should be aware of: 1. Worse Sentiment: recent uncertainty in policy changes, either trade conflict, federal budget cutting, or new government policies are taking a toll on demand, consumption, and business activities, while inflation is flaring around; all of these are showing signs of being reluctant in hiring activities. 2. not only the sentiment of uncertainty ahead, the recent downsizing workforce is likely to diminish the strength of labor market conditions. 3. Purchasing managers’ index reports from ISM, S&P, and ADP employment changes are making sure that we know about softening in the employment level. Despite this, that does not always set a 100% path for upward GOLD prices. There are other factors to consider, such as the Federal Reserve member speech (Powell, Bowman, and William), Trump’s summit, and other geopolitical events.
Trump Administration Cites Fentanyl Progress as Key to Further Tariff Reduction
Despite not altering tariff policy on steel and aluminum, saying that this will happen next week, President Trump has granted temporary tariff exemptions on some exported goods from Canada and Mexico that meet USMCA requirements until April 2nd. This temporary agreement partially undoes the recently imposed 25% tariffs, which has led to global uncertainty. According to the White House, 50% of Mexican and 38% of Canadian imports comply with USMCA and as long as fentanyl progresses well, the US tariff is also likely to drop in response as well. In response, Canada has also postponed a second set of tariffs on $125 billion worth of US goods until April 2nd. Cost cutting: Trump and Elon Musk are now continuing to work on reducing the cost measuring and staffing on DOGE, and with ongoing layoffs, all of these could potentially lead to a higher unemployment rate in between February and March. Strategic Bitcoin Reserve: Trump officially signed an executive order and “direct the government to stockpile bitcoin, ethereum, and three other tokens,” as per CNN sources. Other news: an extension of the Tiktok deadline, working on a large investment agreement between Trump and Saudi Arabia, a statement regarding US-Japan relations.
Top News of the Day: A Quick Recap
President Donald Trump: The Bank of England: Job in the United States ADP employment changes dropped below the estimated figure due to recent layoffs from Trump’s policy and uncertainty in the economic outlook. While there are some drawbacks in activities and new orders that lead the business to reluctantly replace leavers.
Trump’s Tariff Threats: Mexico & Canada Push Back
Although President Donald Trump aims to increase foreign investment and build in domestic product in the United States through tariff threats, the major trading partners are not in the very best spot. Here is what you should know about: → But what thing to note is that Canada is already posing a threat to the stagflation scenario, which having a trade war would largely escalate even more. Even Douglas Porter, chief economist at BMO Capital Markets, also cited that “Canada faces a moderate recession if tariffs stay.” Hinting that Canada has not much choice for now. Either he chooses to move the manufacturing to the US or find another market, just like Mexico’s plan. However, there is still hope for tariff changes on April 2nd with Canada and Mexico, as per US Commerce Secretary Lutnick.
Key Insights: What happened last night?
What happened last night? The market seems to be in terrible conditions from yesterday’s investment plan announced by President Donald Trump, as the stock market, bond market, and crypto are all falling like there is no way back. Oil prices also dropped, except for gold prices, which are rising ahead of uncertainty. This is also supported by a higher VIX index that indicates a rising fear from investors. All of these are the result of: Looking Forward:
Weekly Data Summary Report As of March 3, 2025
Weekly Data Summary Report As of March 3, 2025 In this report, we will assess major economies, including the United States, the Eurozone, and Canada, mainly based on their economic indicators and economic events that have occurred within this week. Canada Given how the Bank of Canada has aggressively eased the monetary policy, the growth is now starting to see some differences through having more demand coming from household consumption, while some are concerning about the looming tariff from Trump’s policy tomorrow (March 4). Therefore, all of these factors—strong growth and potential inflation from tariffs—would likely hint at a pause from the Bank of Canada. The European As shown above, most of the inflation in the Eurozone is starting to tick up ahead of the Trump tariff having come into effect. This could be mainly due to an increase in wage inflation that has squeezed the business’s profit while keeping the inflation risk higher. But the important part depends on Trump’s tariff decision is whether 25% will really come into effect. If so, then we are likely to see more inflation flow into the Eurozone and result in a scarcity of demand consumption. All are now looking into the ECB’s rate decision this week with another easing projection. The United States A softer US economic growth, yet remains in a strong zone as consumer spending is still surging to 4.2%, although pricing is still putting some constraints on the budgeting. Big-purchasing is also another way of showing that people are still able to pay off goods; demand is still flowing around, which keeps the growth in good condition as of now. However, recent high inflation is also a challenge for the Federal Reserve on pausing, especially with ongoing inflation expectations from tariff policy. Here are some updated from the Trump post.
Knowing the Risk off and Risk on mentality
Ever seen significant changes in the market without any reason behind? Like just a sudden swift. All of these are sometimes found by what we called “risk off and risk on mentality.”. What exactly does this mean? Think of it as an investor’s sentiment, which is driven by fear or optimism. Risk off = Fearful If investors are being fearful due to a high uncertainty outlook or significant policy change, then they will be reluctant to put all their assets in a “high risk, high return” type of asset or even on any investment. They sometimes go for safe haven assets or even high-liquidity assets such as cash to reduce the risk of uncertainty. Therefore, they might sell out their asset to take on the profit they have gained. So all of these are the characteristics of what we called “risk-off” mentality. With that being said, the goal is to preserve the capital rather than generate a high return. Risk on = Optimism Vice versa, if you have optimism about the economic outlook and anticipate a high return, then this is called “risk on.” They would pull most of the asset to generate a more income stream and return on investment. Factor cause To review, most of the sentiment shift is mainly due to uncertainty in the economic outlook, policy changes either from the government or central banks, market manipulation, or the market players’ opinions, such as Warren Buffett or Ray Dalio. For example, if the central bank raises interest rates, this signals a tightening monetary policy that can slow down economic growth and lead to risk-off behavior. The 2009 financial crisis is also another profound example of the prolonged “risk off scenario,” triggered by the collapse of the housing market and subsequent banking crisis. Take a look at recent news: A $1.5bn hack of crypto exchange ByBit by North Korean. A big boom in news leads to a risk-off mentality as investors who hold on to bitcoin are being fearful of their underlying asset. In response, Bitcoin has dropped dramatically to below $85,000 and other coins’ prices have dropped. Along with how Warren Buffett sold off his underlying assets and held on to cash more, it was also another factor to influence many to do the same thing. All of these are what have led to turbulence in the stock market, commodities, and crypto market. Please note that manipulation can take various forms and is subject to regulatory oversight Comparison Between Risk On and Risk Off Favored assets during each period Dive deeply into what kind of asset would be very beneficial for risk-off and risk-on mentalities, as not all risk-off strategies deserve to hold on to cash or do nothing. Just like what Warren Buffet said, “Be fearful when others are greedy. Be greedy when others are fearful.” And even if the market is quite unpredictable, there are some assets you may consider below: All of the above descriptions are not meant for investment advice; therefore, kindly take them as part of your consideration before making any informed decision.
Key Market Insights Ahead of the Inflation Data Release
US inflation data tonight will give a rough idea of the direction of the disinflation progress, along with how the market did after hearing the tariff threat from the US’s president. Did they buy-front to get an advantage ahead of the tariff come or did they do nothing? What we learned: Quarterly inflation surged higher than expected, giving the dooming idea that the Federal Reserve will remain faithful to holding the rate for longer. All come with higher egg prices to housing prices, and yet, a higher tariff is likely to continue fueling the inflation expectation. Expectation: Despite this, most inflation data could probably come softer with major spending expected to reduce to 0.2% in January, as per analysts. Perhaps reluctant to purchase goods during uncertainty? But further clear insights will be shown through the report tonight. Possible gold price reaction depends on various reasons. Yet if the inflation data heat up once again and lead the Federal Reserve to become hawkish, then this will likely weaken the gold price. If the cooling data come, then there will remain a positive message for the gold, albeit not much. Other factors from Trump’s meeting tonight with Prime Minister of Ukraine will likely be a key highlight before the market closes.
Key Updates: Tariff Implementation on Schedule, War’s Uncertain End, Rare Mineral Agreement Today, and Federal Reserve’s Concerns
Economic Aspect to consider: US Gross Domestic Product
Many expected to have softened growth for the last quarter, anticipating an upward inflation problem. All are due to uncertainty in economic growth to tariffs related to geopolitical development, which will likely dampen investor sentiment. Even if the growth meets the projected line or overshoot, this still does not mean that the US economy is in very healthy and balanced economic growth. Recent labor data are solid but do consider the recent layoffs from Trump and Elon Musk’s initiative. Expecting to have more investment pull in? have not come yet. Inflation is flaring like crazy, and if the tariff threat does not fade away or the tariff agreement has not been reached on good terms, then we are likely to see more constraints on budget spending coming in leading to demand deterioration. And that is why the Federal Reserve is now standing side by side on hold for longer. These two projected factors are already eye-soaring for the US economy. So imagine what could be a possible growth coming in where the main driver in growth is already heading toward a downturn. Expecting to have trading partner’s economies help? Very Unlikely. The US economy could be stronger than most peers. Considering Canada’s economy, some already projected a stagflation scenario or what some called a “can’t growth economy,” despite heavy ease. The same as the UK’s economy, which is also seeking stimulus within. The EU and the US have now in a trade conflict recently. Japan is doing fine on its own but is also fighting an inflation battle with an expected tightening monetary policy as well. All of which are trying to fight against their own problems. Therefore, the US could be the only one that can save themselves, more or less. But I’m still looking forward to more policy changes from Trump.
