MARKET WRAPS

Stocks:

European stocks opened the week higher as expectations grew of Germany's fiscal spending plan receiving Bundestag approval.

The ZEW business sentiment index on Tuesday could offer an early indication of how the proposed package has gone down in Germany.

Also on slate this week is the eurozone's final inflation data for February, due Wednesday, while the Bank of England is widely expected on Thursday to keep its key interest rate unchanged at 4.50% after last month's cut.

Stocks to Watch

Puma gave very weak indications at the start of the year and issued a disappointing outlook for 2025 as a whole, Baader Helvea Equity Research said, downgrading the stock's rating to add from buy.

Economic Insight

Eurozone inflation should converge sustainably to the European Central Bank's target within the next year, the bank's vice president Luis de Guindos said, pointing to easing wage growth that will help bring down prices in the services sector.

Markets expect the German Bundestag to approve the planned fiscal package agreed last Friday by the future coalition partners and the Greens, according to ING.

Market Insight

The decision of Canada Prime Minister Mark Carney to review the purchase of F-35 fighter aircraft from Lockheed Martin could boost orders of Europe-made jets , Mediobanca said.

U.S. Markets:

Stock futures dropped on Monday following Friday's market rally.

Treasury Secretary Scott Bessent said over the weekend he wasn't worried about a market downturn.

"Corrections are healthy. They're normal. What's not healthy is straight up," he told NBC News.

Forex:

The euro could extend its recent gains against the dollar on worries over slower U.S. economic growth, lower Treasury yields and Germany's fiscal spending plans, Societe Generale said.

It added the dollar should fall as U.S. and European bond yield spreads look set to narrow in the coming year.

The proposed change to the German debt brake is "such an important moment in Europe's history" that it should mean the 2022 euro low versus the dollar isn't seen again for at least a decade or two.

The dollar traded steady as it struggled to recover meaningfully after its recent selloff on concerns about weaker U.S. economic growth.

With market participants seeking to hedge against political uncertainty and a potential U.S. economic slowdown, the "last thing that springs to mind" is to buy the asset most exposed to those factors, Pepperstone said.

Any dollar rallies are good selling opportunities, it added.

ING said the dollar could come under pressure as U.S. equities are seen opening lower amid looming U.S. tariffs.

Sterling is at risk of falling if the March 26 U.K. budget prompts markets to price in more BOE interest-rate cuts, ING said.

Treasury chief Rachel Reeves is expected to announce spending cuts, and tighter fiscal policy could prove sterling negative.

Bonds:

Eurozone government bond yields traded lower after Fitch Ratings, S&P Global Ratings and Morningstar DBRS on Friday affirmed a number of credit ratings and outlooks, while Moody's upgraded Greece.

Morgan Stanley Research said supply risks in Germany in 2025 seemed contained, while bond issuance is set to surge in 2026, which should drive volatility in yields and asset swaps.

Energy:

Oil prices rose in early trade after China unveiled plans to boost domestic consumption and the U.S. vowed to keep attacking Yemen's Houthi rebels.

The world's second largest economy and top crude importer released a policy plan aimed at reviving consumption by raising wages, increasing pensions and creating incentives for childbirth, while also reporting surprisingly robust economic activity at the beginning of the year.

Meanwhile, the U.S. launched a wave of air strikes on Houthi targets after the group vowed to resume attacks on ships transiting the Red Sea, further boosting prices.

Still, gains are capped by concerns that escalating trade tensions could hurt the global economy and fears of an oversupplied market as OPEC+ prepares to increase output next month.

Goldman Sachs cut its oil-price forecasts for this year and next on expectations of slower demand growth and higher OPEC+ supply.

Goldman says it now projects oil demand to grow by 900,000 barrels a day in 2025 from 1.1 million barrels a day previously, citing slower U.S. economic growth due to tariffs.

It also expects OPEC+ to increase output for four months starting in April.

Metals:

Gold futures slipped after hitting an all-time high on Friday.

The dollar weakened and gold broke through the $3,000 an ounce mark for the first time as investors continue to seek safe-haven instruments in the face of an escalating trade war, ANZ Research noted.

U.S. tariff policies continue to raise concerns of higher inflation and a subsequent economic slowdown.

RHB Retail Research said Comex gold futures' bullish momentum is likely to persist, based on the daily chart, supported by prevailing market trends and further reinforced by the uptrending relative strength index.

Base metal prices were mixed, with copper flat and aluminum down.

Copper could rise to $10,000 a ton in March on temporarily stronger U.S. copper import demand and wider constraints on copper concentrate and scrap supply, Goldman Sachs said.

EMEA HEADLINES

QinetiQ's Shares Tumble On Geopolitical Uncertainty, Contract Delays

QinetiQ's shares experienced its worst-ever one-day percentage fall after the U.K. defense company cut its revenue outlook for 2025, citing geopolitical uncertainty in the U.S. and delayed orders.

Shares in the London-listed group were down 21.75% at 4.10 pounds in morning trade Monday, having fallen by as much as 22.3% in that session, after QinetiQ warned that it now expects organic revenue growth for the year ending March 31 at around 2%, compared with previous guidance of high single-digit growth.

UBS Braces for Most Complex Phase of Credit Suisse Integration

UBS said it will start the most complex part of its Credit Suisse integration in the coming months, as the banking giant deals with uncertainty amid global trade tensions and Swiss proposals to tighten capital rules.

The Swiss banking group will begin the migration of former Credit Suisse client accounts in Switzerland to the UBS platform in the second quarter, it said in its annual report published Monday. UBS sees this as the most complex phase of the entire integration process of its former rival.

Trump Says He Will Talk With Putin Tuesday on Ending Ukraine War

President Trump said he plans to speak with Vladimir Putin on Tuesday after the Russian president pushed back against a U.S.-brokered plan for an immediate pause to the fighting in Ukraine.

"We want to see if we can bring that war to an end," Trump told reporters on Air Force One late Sunday. "Maybe we can, maybe we can't, but I think we have a very good chance."

AstraZeneca Buys Belgian EsoBiotec for Up to $1 Billion to Boost Cell-Therapy Portfolio

AstraZeneca bought Belgian biotech company EsoBiotec in a deal valued at up to $1 billion, to expand its cell-therapy portfolio.

The British pharma company said Monday that it will pay $425 million to Esobiotec once the deal closes, expected in the second quarter of this year. AstraZeneca will pay EsoBiotec up to $575 million upon development and regulatory milestones being met.

Cautious BOE to Pause on Rate Cuts Again as Peers Complete Journey

The Bank of England is expected to take another pause on its rate-cutting path Thursday as two of its European peers come to the end of their journeys.

The U.K.'s central bank a month ago lowered its key interest rate for a third time, and again by a quarter of a percentage point as policymakers balanced relatively high and rising inflation against new disappointments on growth.

GLOBAL NEWS

U.S. Tariff Increases to Slow Global Economy, Boost Inflation, OECD Says

Higher U.S. tariffs on imports are set to slow economic growth and push inflation higher around the world, with further increases threatening an even more severe downturn, the Organization for Economic Cooperation and Development said.

In a quarterly report published Monday, the Paris-based research body cut its growth forecasts for most of the world's largest economies over this year and next, the main exceptions being China, Argentina and Turkey.

Stocks Haven't Traded at These Levels Since September

The prospect of a second term for President Trump boosted stock prices well before he was elected. Two months into his presidency, that "Trump bump" has all but disappeared.

The stock sectors that began to rally six months ago-fueled by the hope that a second Trump term could spur growth for the U.S. economy-have come falling back to earth as trade-policy whiplash and recession fears rattle markets.

Trade War With Europe Puts $9.5 Trillion at Risk, U.S. Firms Say

BRUSSELS-The escalating trade war between the U.S. and Europe threatens a commercial relationship that is worth an estimated $9.5 trillion in two-way trade and investment, say American businesses caught in the crossfire.

The American Chamber of Commerce to the European Union, which represents U.S. companies that operate in Europe, said tariffs risk damaging far more than just sales of goods that are directly taxed. They could also harm trans-Atlantic investments, which are more than three times as valuable.

China Says It Started Year on Strong Economic Footing as Trump Tariffs Hit

SINGAPORE-China reported surprisingly robust economic activity to start the year, giving Beijing some wind at its back as it faces the prospect of increased tensions with President Trump's second administration.

Retail sales, a measure of consumer spending in China, accelerated, and investment and industrial production grew more than expected, though unemployment rose to a two-year high, and the beleaguered property market remained under pressure, according to official data.

Japan Isn't Manipulating Currency Rates, Prime Minister Ishiba Says

TOKYO-Japanese Prime Minister Shigeru Ishiba reiterated that Japan isn't intentionally pushing down the yen's value to lower the price of its products sold overseas.

"We are not manipulating currency rates," Ishiba said in a parliamentary committee Monday. "I don't think it is something Japan should be doing to believe that it's better to make [exports] cheaper by weakening the yen."

The Unintended Consequences of Trump's Firing Spree

At Veterans Affairs facilities in Detroit and Denver, staff reductions have led to canceled health programs and left homeless veterans without their dedicated coordinator to help them find an apartment and line up a deposit.

In Alabama, job cuts at the Education Department have slowed efforts to get disabled children access to classrooms.

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This article is a text version of a Wall Street Journal newsletter published earlier today.

(END) Dow Jones Newswires

March 17, 2025 06:50 ET (10:50 GMT)

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