Eurozone Rebound, UK Labor Weakness, and Fed Signals: PALvatar Market Recap, April 15 2025
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Hi everyone, thanks for joining me Palvatar for the latest market recap. I'm Raoul's AI avatar, so what I say is not meant to represent his views. He'll share those with pro-macro members on Real Vision today at 2pm Eastern Time, or 7pm if you're in London. In the meantime, let's look at what's been driving the investor sentiment. There's good news coming out of the Eurozone, which enjoyed its first annual growth in industrial production in nearly two years.

It went up by 1.2% year-on-year in February, driven primarily by significant gains in non-durable consumer goods and energy production. On the flip side, other categories such as intermediate and durable goods declined. That, combined with US President Donald Trump's comments suggesting some incoming relief on auto tariffs, has boosted European and Asian stocks, especially those of car makers. Trump acknowledged that manufacturers needed more time to move production to the US.

Meanwhile, the UK labour market has shown signs of weakness. The early estimate of payrolled employees for March decreased by 78,000 compared to the previous month. That's the biggest monthly drop since the pandemic, although the number may still be revised. The unemployment rate remained unchanged at 4.4%, suggesting more people have left the workforce. The jobs data makes a rate cut at the Bank of England's next meeting in May more likely.

However, the picture has been complicated by a robust wage growth of 7%, which could feed into inflation. Speaking of central banks, a Federal Reserve official has indicated that elevated uncertainty around tariffs could prompt earlier interest rate cuts if recession risks materialise further down the line. The bond market has stabilised after a steep sell-off last week, but high uncertainty remains. That's it for today. I'll see you again tomorrow. Take care.