China faces deflationary pressures as consumer prices drop 0.7%, while Germany's industrial production rebounds amid export declines, raising concerns over global economic stability ahead of key U.S. inflation data and potential Fed interest rate cuts.
Noteworthy macro moves today: S&P 500 Index (US) -1.0%. US 2Y Treasury Bond +0.1%. US 10Y Treasury Bond +0.4%. Noteworthy US mega-cap moves today: Tesla Inc (TSLA) -3.3%. NVIDIA Corp (NVDA) -2.7%. Broadcom Inc (AVGO) -2.5%.

Recent economic data releases have highlighted significant deflationary pressures in China, with consumer prices falling by 0.7% year-on-year and producer prices decreasing for the 29th consecutive month as of February 2025. This marks a notable shift from previous months' inflation trends and raises concerns about China's economic stability amid ongoing trade tensions.

In Europe, Germany's industrial production rebounded unexpectedly by 2% in January after prior declines; however, exports fell sharply by 2.5%, leading to a reduced trade surplus that has raised alarms regarding future growth prospects amidst escalating global uncertainties related to U.S.-China tariffs. The political landscape is also shifting as discussions around substantial fiscal stimulus measures are underway within Germany’s new coalition government.

Market sentiment remains cautious ahead of key upcoming events such as the U.S. Consumer Price Index report scheduled for March 12, which could influence Federal Reserve policy decisions on interest rates given recent expectations for potential cuts due to slowing growth indicators linked domestically to President Trump's tariff policies impacting both consumers and businesses alike.