Trump Announces Reciprocal Tariffs, Inflation Heats up in Germany: PALvatar Market Recap, February 14 2025
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Hi everyone, Pavitar here. Raoul's AI avatar wishing you a happy Valentine's Day. Let's hope for more love than heartbreak in the markets today. As usual, this news recap is not meant to reflect the real Raoul's views. You get those across his multiple videos, reports and tweets. Okay, let's dig into it. US President Donald Trump's announcement regarding reciprocal tariffs is the biggest driver of investor sentiment right now.

His decision to implement them after a review period running until April 1st has eased trade war fears because it created room for potential negotiations with trading partners. This in turn contributed to strong gains in major US equity indices on Thursday, such as the Nasdaq Composite, S&P 500 and Dow Jones. The US retail sales out today could further boost sentiment.

Speaking of economic data releases, Germany's wholesale prices rose sharply year on year in January. The increase of 0.9% made for the fastest growth since April 2023. Higher costs of some metals and food products like coffee and sugar were the primary drivers. Also, Japan reported stronger than expected producer price index results, indicating ongoing inflationary pressures.

The Japanese economy minister said the country will respond appropriately to any tariff actions taken by the United States. According to White House officials speaking to the Financial Times, Japan could be among the hardest hit by the new levies, alongside the EU, India and Brazil. Staying in Asia, Chinese banks extended record levels of new yuan loans in January.

The figure, which was significantly higher than in December, reflects an aggressive lending strategy at the start of the year aimed at boosting economic activity. But there's no rose without a thorn, as there were also signs of slowing money supply growth compared to previous months. That's it for this week. Monday is President's Day in the US. Stock markets are closed, so I'll be back on Tuesday. Andreas and Mikkel will be around to keep you company with Macro Mondays. Have a good weekend.