The Morning Edge: Global Economy On Edge As US Tariffs Shake Markets

The US, once a key driver of global growth, now risks becoming a drag on the world economy as President Donald Trump’s sweeping tariff policies ripple through financial markets. With growth slowing and inflation fears rising, central banks across the globe are sounding alarms over the uncertainty ahead. The Bank of England, holding rates steady on Thursday, directly pointed to Trump’s trade moves as a threat to global stability. Similar warnings echoed from the Bank of Japan and the European Central Bank, with ECB President Christine Lagarde cautioning that retaliatory tariffs could dent growth and push inflation higher. Meanwhile, the Swiss National Bank and Sweden’s Riksbank highlighted growing risks from abroad, underscoring just how much the world is bracing for impact.

Data
The number of Americans filing for unemployment benefits edged up slightly last week, with initial claims rising by 2,000 to a seasonally adjusted 223,000 for the week ending 15 March, according to the Labor Department. Although claims have varied between 203,000 and 242,000 this year, indicating a stable labour market with low layoffs and moderated hiring, the outlook is complicated by increasing trade tensions and reductions in government spending. Notably, the report revealed that more people are remaining on jobless rolls longer compared to the same period last year, hinting at potential challenges in re-employment despite the overall resilience of the labour market. 

Markets
Overnight
US stocks indices ended slightly lower on Thursday, fluctuating throughout the session as investors weighed the Federal Reserve’s policy statement and fresh economic data against ongoing tariff concerns. The technology sector was among the weakest performers, dragging the market down, while energy stocks gained as crude prices rose nearly 2% following new US sanctions on Iran. Darden Restaurants bucked the trend, surging 5.77% after the Olive Garden owner offered an optimistic outlook on navigating tariff impacts, but Accenture plunged 7.26%—its steepest drop in a year—as federal spending cuts delayed or cancelled new contracts. The mixed performance underscored the market’s struggle to reconcile corporate earnings prospects with broader economic and policy uncertainties.

US Treasury yields trimmed early losses on Thursday as traders remained cautious about the economic outlook, despite the Federal Reserve’s signal that it is in no rush to cut rates. The yield on benchmark 10-year notes fell 1.9 basis points to 4.237%, while the 30-year bond yield dipped 1 basis point to 4.5565%. Similarly, the 2-year note yield, which closely tracks Fed rate expectations, declined 1.8 basis points to 3.962%, reflecting ongoing uncertainty about growth and inflation dynamics. The moves underscore the market’s delicate balancing act amid mixed economic signals.

The US dollar gained ground on Thursday, while the euro weakened, after the Fed signalled it was in no hurry to cut its key policy rate. The dollar index, which tracks the greenback against a basket of currencies, rose 0.41% to 103.80, with the euro falling 0.44% to $1.0853. Meanwhile, the dollar edged up 0.06% against the yen to 148.77, reflecting the market’s reaction to the Fed’s cautious stance on rate cuts amid ongoing economic uncertainties.

Brent crude oil prices rose on Thursday after the US imposed new Iran-related sanctions, heightening geopolitical risks in the Middle East. Brent crude futures gained 1.72% to settle at $72 per barrel, offsetting pressure from a stronger dollar. The sanctions targeted several entities, including a Chinese independent refinery and vessels supplying crude to such plants. Investors remain watchful as escalating tensions could impact global oil supply dynamics.

Day’s Ledger

Economic Data:
 - Japan February CPI Data
 - India Weekly FX Reserves Data
 - US Oil Rig Data

Corporate Actions:

 - Authum Investment & Infrastructure board to consider dividend
 - Bombay Burmah Trading Corporation board to consider dividend
 - ESAF Small Finance Bank board to discuss fundraising plans
 - IndiGrid Infrastructure Trust board to discuss fundraising plans
 - Interise Trust board to consider dividend
 - Larsen & Toubro board to discuss fundraising plans
 - Motherson Sumi Wiring India board to consider dividend
 - Samvardhana Motherson International board to consider dividend
 - Sundaram Clayton board to consider dividend
 - Welspun Corp  board to discuss Voluntary Delisting

Policy:
- European Union Leaders Summit
-  FOMC Member Williams Speaks

Tickers

• Bain Capital to investing ₹43.85 billion in MANAPPURAM FINANCE to acquire an 18% stake in the company via a preferential allotment of equity and warrants at a price of ₹236 per share. 
• BAJAJ FINANCE has approved the elevation of Rajeev Jain as Vice Chairman in the capacity of Executive Director for three years, and the re-designation of Anup Kumar Saha as Managing Director, effective April 1. 
• CDSL's subsidiary, Centrico Insurance Repository, has entered into an agreement with LIC to provide insurance repository services.
• CG POWER AND INDUSTRIAL SOLUTIONS has entered the air coolers market with the launch of its JetChill technology.
• GLENMARK PHARMACEUTICALS’s US subsidiary has received final approval from the USFDA for Olopatadine Hydrochloride Ophthalmic Solution. 
• HERO MOTOCORP will make a strategic investment of up to ₹5.25 billion in Euler Motors for a 32.5% stake, foraying into the electric three-wheeler market. 
• HINDALCO INDUSTRIES plans to invest ₹450 billion across aluminium, copper, and specialty alumina businesses.
• HINDUSTAN UNILEVER board approved the investment to acquire a 14.3% stake in Lucro Plastecycle.
• LLOYDS METALS AND ENERGY has received environmental clearance for the upcoming 1.2 MTPA wire rod project and 4.0 MTPA pellet plant project in Chandrapur, Maharashtra.
• UNICHEM LABORATORIES has completed its capacity expansion (Phase I) of the API plant at Pithampur, with an investment of ₹2 billion.

Must Read

• Elon Musk’s X takes Indian Government to court over digital censorship
• Govt looks for integration of unconventional datasets in census, other surveys
• Trump says he believes India will lower tariffs on US goods
• Bain Capital to acquire 18% stake in Manappuram Finance for ₹43.85 billion
• Services sector should aim to exceed merchandise exports next fiscal: Goyal
• IndusInd Bank to appoint independent firm to investigate discrepancies in derivative accounts
• India's gems, jewellery exports fall 23.49% in Feb on weak demand
• SEBI may ease FPI disclosure norms, double granular disclosure threshold
• Trump signs order to increase critical mineral production in the US
• EU delays implementing first retaliatory tariffs on US goods to middle of April

Daily Mantra
Nobody is guaranteed tomorrow, but why not have goals that are cool and motivational?