The escalating trade dispute hit the stock markets hard in the second half of the week. On Wednesday, US President Donald Trump announced numerous punitive tariffs on US imports against almost all countries, causing a global stir. In addition to important US economic data, investors were also occasionally confronted with inflation data for Germany and the eurozone. The week usually ends on the first Friday of the month with the publication of the official US labor market report.
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Trump announces punitive tariffs on imports into the USA for almost all countries
Trump announced punitive tariffs on US imports for over 180 countries in the Rose Garden of the White House late on Wednesday evening. For goods from the eurozone to the USA, a punitive tariff of 20 percent is planned from April 9, 2025. For steel and aluminum imports, for example, the extra duty will remain at the 25 percent already in force.
Investors are now likely to fear possible counter-reactions from major economies in particular. In this context, the escalation spiral could soon continue. Investors should continue to keep a close eye on developments in the trade dispute. Uncertainty about the unforeseeable impact on the global economy is likely to continue to weigh on general risk appetite.
German and European inflation declining
According to initial forecasts, the German inflation rate fell in March due to cheaper energy. According to the German statistics office, goods and services rose by an average of 2.2% compared to the same month last year, which is the lowest figure since November 2024. In January and February, price pressure was still at 2.3 percent.
Preliminary consumer price data for the eurozone was published on Tuesday. At 2.2% in March (year-on-year), the rate of inflation was below the February rate of 2.3% and therefore as high as expected.
ISM manufacturing index disappoints - ADP employment data much better than expected
The ISM index for the manufacturing industry in the USA was a disappointment in the afternoon, coming in at 49 points, below the growth threshold of 50 points and thus weaker than expected (49.50 points), after 50.30 points in the previous month.
A first foretaste of today's US labor market data was provided by the ADP employment data in the middle of the week, which at 155,000 new jobs was significantly weaker than expected (105,000), after 77,000 units in February.
The counterpart to the ISM index for the non-manufacturing sector came in at 50.80 points on Thursday, which was worse than expected (53 points), but was still above the important 50-point mark.
Economists expect the job market to deteriorate compared to the previous month - hope for interest rate cut signals
Market participants are likely to turn their attention to the publication of the "NFPs" this Friday afternoon. According to current estimates, economists expect non-farm payrolls to increase by 135,000 units, after 151,000 jobs in February. The unemployment rate is likely to remain at 4.1%, unchanged from the previous month.
Investors should also keep an eye on the development of average hourly wages.
Dow Jones Industrial Average Index
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