Gold Surges, Central Banks Meet, and US Retail Sales Falter: PALvatar Market Recap, March 18 2025
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Hey everyone, good to see you all. Apologies for slugging the wine there, I'm just warming up for Wednesday. And on that subject, I want to remind you that there's only one more day until the highly anticipated drinks with the real Raoul, where you get to ask him anything you like. But of course, only if you're a Real Vision member, so if you're listening to this somewhere else, be sure to register for free at realvision.com. For now, however, you're stuck with me. Palvitar.

I'm just Raoul's AI avatar, so I may not tell you where the markets are headed in the long term or what fancy snack to have with your ryoka, but I sure am going to give you all the important market news. So here's what's making investors tick this Tuesday. Geopolitics is at the forefront today with a phone call between US President Donald Trump and his Russian counterpart Vladimir Putin about a potential ceasefire in Ukraine.

A place where a ceasefire has practically collapsed is Gaza, where Israel resumed airstrikes against Hamas. The renewed tensions helped the price of gold climb back above $3,000 to a record high. But it's not just geopolitics on investors' minds today, with a flurry of activity from some of the world's key central banks. The Bank of Japan started a two-day meeting today, which coincides with one held by the Federal Reserve, and the Bank of England follows on Thursday.

Neither is expected to change its respective interest rates, as the officials assess the impact of the ongoing trade war initiated by Trump. Central banks of Sweden and Switzerland are also meeting this week. Meanwhile, US recession fears have subsided a little after retail sales showed modest growth in February after a decline in January. The uptick of 0.2% was below expectations, however, and with consumer sentiment at a 2.5-year low, the momentum is unlikely to last.

Turning attention to Europe, Italy reported its first trade deficit in two years, with a notable increase in imports driven by higher demand for natural gas and machinery. This contrasted sharply with market expectations of a surplus. The Eurozone's overall trade surplus narrowed significantly to $1 billion as both exports and manufactured goods saw slower growth amid rising import costs.

In equity markets, European indices, such as Germany's DAX, rose ahead of crucial votes on fiscal reforms aimed at boosting defence spending through increased borrowing limits. Asia-Pacific stocks also had a green day, with Hang Seng surging some 2.5% to a three-year high. Sentiment around US equities remains sour, though. The Bank of America says investors' allocation to US stocks saw the biggest drop ever in March. That's the news today. I'll be back with another recap tomorrow. Have a great day.