By Michael Susin, March 3, 2025
On Monday, global stock markets demonstrated an upward trend as investors anticipated crucial US economic indicators for the week. The possibility of Europe stepping in to bolster Ukraine and ramp up defense expenditure fueled the optimistic sentiment.
Shortly after opening, the European Stoxx 600 saw a 0.1% rise, while Germany’s DAX experienced an increase of 0.2%. The FTSE 100 and France’s CAC 40 both advanced by 0.3%. This upward trajectory was led by European defense shares as the euro rebounded from its two-week low against the dollar on Friday. This response comes in light of European leaders proposing a ‘coalition of the willing’ to aid Ukraine.
Defense shares such as BAE, Thales, Rheinmetall and Leonardo saw significant gains, all rising by 14% to 16%.
Asian markets painted a mixed picture, with Hong Kong losing initial gains ahead of this week’s National People’s Congress (NPC) meeting. This crucial decision-making body meets amidst escalating tensions between China and the US, following the impending 10% tariff on Beijing imposed by Trump, effective Tuesday.
The Hang Seng tech index fell 0.9%, Shanghai closed 0.1% lower, while Japan’s Nikkei closed 1.7% higher due to subsiding fears of increasing borrowing costs. The yuan experienced a slight weakening against the dollar in both offshore and onshore markets, in anticipation of the NPC meeting.
Key US economic data is scheduled for this week, including the Fed’s Beige Book on Wednesday, initial unemployment claims on Thursday, and the Bureau of Labor Statistics’ jobs report and unemployment rate for February on Friday.
The futures of the U.S. Dow Jones Industrial Average gained 22 points on Monday morning, S&P 500 futures rose 0.2%, and Nasdaq Composite futures increased by 0.3%.
Investors seeking a safe haven led to a slight increase in the gold price by 0.06% to $2,860.19 an ounce. Brent crude and WTI saw little change, while the European benchmark natural gas saw a 5.8% rise to 46.88 euros a megawatt hour. Eurozone government bond yields traded 2 to 3.5 basis points higher, with the 10-year German Bund yield up 3 basis points at 2.420%, as per Tradeweb. The focus in the Eurozone bond markets is on the European Central Bank’s meeting on Thursday, where a 25-basis-point rate cut is widely anticipated.
After the U.S. commerce secretary announced on Sunday that tariffs on Canada and Mexico would come into effect on Tuesday, the dollar fell. Yet, Trump’s decision on whether to proceed with the planned 25% tariff level is still pending, indicating potential for a lower tariff, as noted by Deutsche Bank analysts.
In other news, Bitcoin experienced a significant surge, possibly extending its recovery following Trump’s announcement of a strategic crypto reserve on his Truth Social platform. The reserve is said to include Bitcoin, Ether, XRP, Solana’s SOL token, and Cardano’s ADA, and was last seen up by 9.3% at $92,090.
Dow Jones Newswires staff contributed to this report.
