Daily Market Outlook - Friday, March 14

By Patrick Munnelly of Tickmill

Friday, March 14, 2025 7:30 AM EDT

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Asian markets, along with US and European equity futures, advanced on Friday, buoyed by optimism that the US could avoid a government shutdown, which bolstered market sentiment.

Stocks gained traction in Japan and Australia, while the CSI 300 index, representing mainland Chinese equities, surged to its highest level this year. The rally reflects growing hope for additional policy measures aimed at boosting consumption. Chinese stocks have become an unexpected refuge for international investors looking to escape the unpredictability in the U.S. Since Trump resumed his presidency in January, Hong Kong's Hang Seng Index has risen by 17%. US equity futures also edged higher as a temporary funding bill appeared poised for approval, potentially averting a government shutdown. This shift in sentiment followed a Thursday decline in the S&P 500, which entered a correction phase with losses exceeding 10% over three weeks. Treasury yields eased slightly after recent gains, as investors turned to safe-haven assets in the previous session. This move pushed gold prices to record highs and strengthened the dollar, which extended its winning streak into a third consecutive day on Friday. Elsewhere, oil prices climbed as the US tightened sanctions, while an $8 billion exchange-traded fund focused on junk bonds faced notable losses heading into 2025. Meanwhile, Bitcoin rebounded on Friday following a sharp drop the day before.

The ONS reported a 0.1% contraction in the UK economy for January, missing the 0.1% growth expectation. Although high-frequency data can be misleading, the three-month GDP average of +0.2% may better reflect the situation. With a softer Q1 start, GDP levels likely align with projections despite differing paths. The OBR's Q1 growth forecast of 0.5% is challenging to reconcile with current data. Manufacturing led the decline at -1.1%, along with a 0.2% drop in construction, leaving limited sectors showing growth at the year's outset. Stateside, the University of Michigan Surveys of Consumers will be a crucial indicator to monitor, particularly in light of the economic impact of U.S. President Donald Trump's tariff measures that are unsettling both businesses and consumers.

Next week’s central bank meetings will serve as a key macroeconomic focus, with the Fed and BoJ convening on Wednesday, followed by the BoE's rate decision on Thursday. However, it is likely to result in a situation of much fuss over little, as all three banks are expected to keep rates unchanged. The Fed will present new economic forecasts, but it is unclear how many of the 'placeholder assumptions' about government policy used in the previous meeting, before Trump took office, can be confidently updated with clearer information. Additionally, keep an eye out for any comments or signals regarding a pause or slowdown in quantitative tightening, following the mentions in the January minutes. For the BoE, anticipate the minutes to underscore a 'gradual and careful' strategy. The Monetary Policy Committee will have received early insights into the labour market report on Thursday, where we will look for any indications of slack, particularly concerning underemployment rather than outright unemployment. Another point of interest in the UK will be the public finances data for February released on Friday, which may influence the assessment of risks related to the 2025-26 remit that will be announced on March 26. In the eurozone, several ECB officials are scheduled to speak on Wednesday, alongside the final February CPI report, while other significant data releases will encompass Chinese economic activity, inflation rates in Japan and Canada, and employment figures from Australia.

Overnight Newswire Updates of Note

ECB's Lagarde Warns Of Severe Global Fallout From A Trade War
UniCredit: ECB Cleared New Shares To Fund Banco BPM's Takeover
UK Boosts Defense Firms With £2B Loans For Allies
UK, US Hold Private Talks In Bid To Defuse Apple Encryption Feud
Citi, Apollo Test New Private Credit Tie-Up In Boeing Unit Sale
China Tells Lenders To Boost Financial Support For Consumption
China’s Economy Forecast To Show Resilience As Trade War Begins
China’s Bond Market Is Changing Its Tune On Japanification
Japan’s GDP Growth Imperils 2% Defense Spending Target
SoftBank, OpenAI To Run AI Agents At Former Sharp LCD Plant
DeepSeek Rejects China Investment, Expands API Sales
CATL Shares Trail Most EV Battery Peers Ahead Of Earnings Report

(Sourced from reliable financial news outlets)

FX Options Expiries For 10am New York Cut

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

EUR/USD: 1.0750 (888M), 1.0800 (700M), 1.0815-25 (1.4BLN)
1.0850 (1.1BLN), 1.0870-75 (941M), 1.0900 (654M)
USD/CHF: 0.8820 (330M), 0.8950 (250M)
EUR/CHF: 0.9500 (321M), 0.9550 (543M), 0.9600 (475M), 0.9650 (300M)
GBPUSD: 1.2950 (220M). EUR/GBP: 0.8425 (200M)
AUD/USD: 0.6260-70 (784M), 0.6300-10 (825M), 0.6325-35 (600M)
NZD/USD: 0.5760 (908M)
USD/CAD: 1.4400-05 (807M), 1.4425 (290M), 1.4450 (1BLN), 1.4500 (450M)
USD/JPY: 147.90-148.00 (745M), 1.4825 (380M), 148.50 (374M)
149.00 (618M), 149.20-25 (550M), 149.50-55 (1BLN), 149.75 (377M)
EUR/JPY: 160.00-10 (380M), 160.65-75 (438M), 162.55 (393M)
AUD/JPY: 95.00 (288M). GBP/JPY: 190.00 (355M), 193.00 (190M)
CHF/JPY: 165.00 (260M), 169.00 (672M)

CFTC Data As Of 7/3/25

CFTC positions for the week concluding on March 4th
The net long position in Japanese yen stands at 133,651 contracts.
The net short position in euros stands at -10,106 contracts.
The net long position in Bitcoin stands at 614 contracts.
The Swiss franc records a net short position of 37,775 contracts.
The net long position for the British pound stands at 18,574 contracts.
Equity fund speculators reduced the S&P 500 CME net short position by 48,053 contracts, bringing the total to 291,884.
Speculators raise activity at CBOT. The net short position in US Ultrabond Treasury futures decreased by 4,169 contracts, totalling 231,904. Equity Fund Managers reduced their net long position in the S&P 500 CME by 10,497 contracts, bringing it to 901,555. Speculators have shifted positions on CBOT. US Treasury bond futures reflect a net short position of 17,797 contracts, a decrease from 40,912 net longs recorded the previous week.
Speculators raised the net short position in CBOT US 2-Year Treasury futures by 21,846 contracts, bringing the total to 1,171,299.
Speculators raised their net short position in CBOT US 10-Year Treasury futures by 12,185 contracts, totalling 712,040. Additionally, they increased their net short position in CBOT US 5-Year Treasury futures by 172,588 contracts, reaching 1,798,361.