A look at the day ahead in European and global markets from Kevin Buckland
It could be taken as testament to the market’s laser focus on the health of the U.S. economy – and the threat from Donald Trump’s trade wars – that even the financial report card from AI poster child and market bellwether Nvidia came and went with barely a ripple.
Part of the reason, of course, is Nvidia’s disclosures were overall neither hot nor cold: forecasts were strong but not sensational; gross margins declined, but with the promise of rising by mid-year.
The most important takeaway was demand for the high-power, high-priced computing that Nvidia is known for is alive and well, despite what had initially appeared as a threat to the Western business model from China’s ostensibly lower-cost AI competitor, DeepSeek.
In Asia, Nvidia’s influence was barely felt anywhere in the region, with tech shares – and the stock indexes they are part of – lacking uniform direction.
Instead, the main focus was elsewhere. Bond yields and the dollar had more of a story to tell, lifting off recent lows as traders assessed the latest, contradictory, rumblings on tariffs from Washington, and what it all might mean for the economy and the path for Fed policy.
Trump appeared to give Canada and Mexico another one-month stay of execution over 25% tariffs, shifting the deadline to April 2 – only for a White House official to try and roll that back to the earlier date of March 4. What was clear though is that Europe is in POTUS’s crosshairs, as Trump floated a “reciprocal” levy of 25% “on cars, and all of the things” that will soon be revealed.
Trump’s trade war, while certainly more damaging to its targets, will also inflict pain on the United States. And the U.S. economy is not looking nearly as robust as it did just weeks earlier, following a run of soft data, compounded by Treasury Secretary Scott Bessent’s comments this week that things are “brittle beneath” the surface.
Traders have moved from pricing just one quarter-point Fed cut this year to two, with the first by July and the second as early as October, according to LSEG data.
Investors will look to GDP data due on Thursday for further signs of a slowdown, while the Fed’s preferred inflation gauge, the PCE deflator, is due on Friday.
Europe has quite a lot of data to digest on Thursday, including jobs figures from Germany, producer prices from France, and consumer inflation in Spain. Outside the bloc, Switzerland reports GDP.
The ECB will kick off the next round of central bank meetings in a week from now, with markets currently priced for a quarter-point cut then, and another two by September.
However, discussions within the central bank centre on how much further rates really need to fall considering inflation is still a bit too high and the economy is struggling.
Key developments that could influence markets on Thursday:
-US GDP (Q4), durable goods orders (Jan)
-France producer prices (Jan), Spain CPI (Feb), Germany jobs data (Feb)
-Switzerland GDP (Q4)
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