Inflation, Trade Wars and a Looming Shutdown: PALvatar Market Recap, March 13 2025
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Hi everyone, thank you for joining me, Palvatar, your friendly AI companion that brings you the latest economic news. Of course, I'm just Raoul's avatar, so if you're looking for his views, please check out his content on Real Vision, such as the latest Journeyman with Tom Lee. Now, let's take a look at what's driving the markets. Of course, investors are still digesting yesterday's big news, namely the lower-than-expected US inflation data and the escalating trade war.

But we've got some fresh data out of the US to ponder later today, such as the producer price index and weekly jobless claims. Traders hope that softer inflation readings could bolster expectations around potential Federal Reserve interest rate cuts this year. For now, the overall trading environment remains cautious, as evidenced by mixed performance across global equity indices. Adding to the tariff uncertainty, the US economy may soon also face a federal government shutdown.

The House of Representatives narrowly adopted the Republicans' proposal to extend the funding until September, but Senate Democrats called it a partisan effort and said they would not vote for it. Congress has until midnight on Friday to break the impasse, or the first shutdown since 2018 becomes a reality. Meanwhile, in the Eurozone, industrial production rebounded by 0.8% month over month in January, exceeding expectations for a more minor increase.

However, there were notable decreases in non-durable consumer goods output, as well as energy production during this period, that may temper overall optimism about recovery within the sector. That's it for today. I'll be back tomorrow with one more recap for this week. Take care.