Market Information Thursday 13 March 2025

US inflation dropped to 2.8% in February, lower than expected, strengthening the case for the Federal Reserve to cut interest rates. Markets responded with cautious optimism, but concerns remain over the impact of Trump’s tariffs on future inflation. Economists warn that while inflation is easing, trade tensions and policy uncertainty could create new risks for the economy.

The EU has retaliated against Donald Trump’s 25 per cent tariffs on steel and aluminium within hours of them taking effect. The European Commission stated that its measures would affect up to €26bn of American goods, and would take effect in April. Targeted products include bourbon, jeans, and motorcycles, with additional levies planned on agricultural and industrial exports.

The Bank of Canada cut interest rates to 2.75% for the seventh consecutive cut, citing economic uncertainty from US tariffs. The central bank warned that monetary policy cannot fully offset the impact of a trade war. Meanwhile, new Liberal leader Mark Carney aims to strengthen Canada’s economy ahead of an expected election.

The 6M Euribor is unchanged at 2.39% compared to previous business day. The 10Y Swap decreased with 4 basis points to 2.73% compared to previous business day.

In the attachment, today’s market data on money and capital market rates as well as other rates are presented.