Three markets to watch next week (10.03.2025)

Financial markets remain turbulent amid recent decisions on trade tariffs and defense investment plans in Europe. The coming week will bring slightly less spectacular macroeconomic readings, although US CPI inflation will be in the spotlight, potentially setting the tone for the Fed's communication in the second half of March. US decisions on trade tariffs on steel and aluminium, which are due to take effect from March 12, will also be crucial. It is worth noting that the time change in the United States took place over the weekend, so from a European perspective, all US readings will be released an hour earlier than standard. Next week, markets such as EURUSD, US100 and NATGAS are worth watching.

EURUSD

The euro is experiencing its best period in terms of percentage growth in several years last week. Defense investment plans in Germany and across Europe have spurred optimism among investors. There has also been a clear divergence in interest rate expectations at the ECB and the Fed. The chances of further cuts in the eurozone are diminishing, while expectations for lower interest rates in the US are rising. We are after the ECB cut in March, but the Fed decision in the second half of the month is still ahead. Before that, US CPI inflation readings for February will be released next Wednesday. If inflation comes in lower than expected, an increased chance of a cut in the first half of the year can be expected. It is worth remembering that this reading will be released an hour earlier than standard, i.e. at 01:30 pm CET.

US100

Wall Street companies have experienced a massive pullback in recent days. Solid Nvidia results did not help, as the company will face the problem of slowing growth in the coming quarters and must contend with increasing competition and Chinese artificial intelligence models that require significantly less computing power. On the other hand, after the recent sell-off, Wall Street companies have become relatively cheap, and the current question among investors is: is this a good time to return to the market? Strongly growing companies from Europe and Asia are now strong competition. In the context of Wall Street, decisions on tariffs will be important. The final imposition of tariffs on industrial metals will sow negative sentiment in the market, although of course, from the perspective of technology companies, key tariffs may not be imposed until early April.

NATGAS

The price of natural gas in the US has risen to its highest levels since January 2023, amid uncertainty about current consumption, rising exports and tariffs on Canadian energy commodities imported into the US. On the other hand, it is worth remembering the seasonal decline in gas consumption due to the likely end of the heating season. In the second half of March, there is expected to be a significant increase in temperatures in the US. NATGAS prices remain above $4/MMBTU, but a significant drop in demand could lead to significant volatility in the market. At the same time, it should be remembered that with increased domestic demand and exports, rebuilding inventories before the next winter season may be problematic. This may mean that gas prices in the context of the whole year will remain at elevated levels. From the perspective of this market, it is worth monitoring data on changes in gas inventories, which will be released on Thursday at 15:30 CET, i.e. an hour earlier than standard.