Robert J. Williams 
Last week, financial markets steadied as central banks held interest rates firm, cautiously evaluating the latest tariff moves. Now, traders focus closely on critical upcoming US economic reports.
Quick Market Recap
Global financial markets caught their breath after recent volatility driven by trade concerns. Major central banks—including the BoJ, Fed, and BoE—opted for patience, keeping benchmark rates steady as they assessed Trump administration tariffs’ impact on growth and inflation.
The Hang Seng Index wrestled unsuccessfully with the critical 24,000 resistance level, ending slightly down, despite impressive earnings from firms like Tencent and Xiaomi. AUD/USD slipped as Australia’s unsuccessful tariff exemption bid and weak job numbers weighed heavily.
The coming week holds critical insights into the US economy, including Q4 GDP and PCE inflation data. Equity markets, especially technology-focused US firms, remain vulnerable due to high valuations and growing concerns about slowing economic momentum amid persistent inflation.
Last Week’s Market Drivers
A Week of Relief for Markets
Following early-March declines linked to intensified US tariff policies, global markets found some relief last week. Reduced media focus on trade tensions boosted investor confidence and lessened market volatility.
Central Banks Play the Waiting Game
The Bank of Japan, US Federal Reserve, and Bank of England left rates at 0.5%, 4.25%-4.50%, and 4.5%, respectively. Each central bank stressed it needed more time to gauge economic effects of recent US trade tariffs before adjusting monetary policy further.
China Shows Promising Data
Encouraging Chinese economic data last Monday displayed stronger-than-expected industrial output and consumer spending growth. Beijing introduced a robust 30-point strategy aimed at stabilizing real estate, boosting consumer spending, and supporting AI technology advancement.
Gold Hits a Fresh Milestone
Gold surged above $3,000 on 14 March, briefly touching $3,050, driven by expectations of future Fed rate cuts, continued tariff uncertainty, and geopolitical tensions in the Middle East. Investors turned increasingly toward safe-haven assets.
Key Markets in Focus
US Equities – Recovery or Temporary Calm?
The US Tech 100 Index stabilized but continued facing headwinds from stretched valuations. Despite no immediate Fed rate change, policymakers reaffirmed expectations for two rate reductions later in 2025. Technical resistance at around 19,800 poses a challenge. If downward momentum resumes, the support at about 19,104 could be tested again—or even lower at approximately 18,400.
Hang Seng’s Critical Test
The Hang Seng Index rebounded sharply midweek but could not sustain levels above the key psychological threshold of 24,000, retreating to 23,690. Technical analysts still target January 2022’s 25,050 levels should 24,000 firmly break. Near-term supports remain at 22,500, with additional cushioning near the 50-day moving average at 21,391.
Earnings season impacted Hong Kong equities heavily. Tencent’s Q4 results impressed—a 90% profit leap from strong gaming and ad revenues—which led analysts at JPMorgan (from $520 to $600) and Goldman Sachs (from $534 to $590) to elevate target prices. Xiaomi reported similarly impressive 49% revenue and 90% profit gains, driving mixed analyst responses; Citi raised targets on margin growth, whereas JPMorgan remained neutral, citing overvaluation.
Aussie Dollar Remains Under Pressure
AUD/USD weakened by 0.8% amid tariff disappointment and weak employment data showing a loss of nearly 53,000 jobs. After recently cutting rates by 25 basis points, the Reserve Bank of Australia signaled cautious hesitation about additional easing. Markets nonetheless anticipate two more rate cuts by early 2026.
Technical trends indicate AUD/USD remains stuck between established ranges from 0.613 to 0.641, with major resistance near 0.64080. Moving averages around 0.63 likely limit deeper declines. A breakout over 0.641 could ignite upside toward the 0.648-0.650 area.
Upcoming Week: Critical Data Ahead
The new week’s calendar emphasizes vital economic figures—particularly US Q4 GDP and PCE inflation indicators. Investors closely watch for signs of slowing growth amid persistent inflation, increasing concerns toward possible stagflation. Recent Fed commentary, cautious about rapid rate cuts, underscores vulnerability for richly valued US equities should data disappoint.
Weekly Economic Overview
- Monday: UK Manufacturing & Services PMIs, US Manufacturing & Services PMIs
- Tuesday: BoJ Minutes, US New Home Sales
- Wednesday: Australia CPI, UK Inflation, US Durable Goods Orders
- Thursday: US Q4 GDP, US Jobless Claims
- Friday: UK Retail Sales, US PCE Prices, Personal Income & Spending
Important Earnings Releases
- Monday: BYD
- Tuesday: China Telecom
- Wednesday: BOC Hong Kong, Bank of China, China Life Insurance
- Thursday: CNOOC
- Friday: ICBC, Agricultural Bank of China, PetroChina
Forex Fact Insight: Global Currency Trading Surpasses $7.5 Trillion Daily
To put stock market figures in perspective, daily forex market transactions surpass $7.5 trillion—far ahead of around $200 billion in stocks. Unlike stocks, forex has no central trading floor but instead involves global banks, hedge funds, investment firms, and traders. Perhaps surprisingly, individual retail traders represent less than a tenth of forex volume. Institutional giants such as JPMorgan and Deutsche Bank serve as market-makers ensuring smooth pricing and availability. Currency pairs such as EUR/USD, USD/JPY, and GBP/USD drive most trading; notably, the U.S. dollar appears in approximately 88% of transactions.
Forex is famously volatile and offers substantial leverage—up to 50-to-1—allowing traders to manage substantial positions with modest capital. Interestingly, currencies have actively traded since the late 1800s, gaining prominence following the Bretton Woods shift. Today, the global forex market’s total valuation reaches approximately $2.09 quadrillion, dwarfing aggregate global GDP.
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