Gold rose to around $2,940 per ounce on Thursday, approaching record levels, as escalating global trade tensions continued to fuel safe-haven demand. On Wednesday, President Donald Trump warned of additional tariffs on EU goods after the EU and Canada retaliated against existing US trade barriers. Commerce Secretary Howard Lutnick also said that Trump would impose trade protections on copper as well. Meanwhile, both headline and core US inflation came in below expectations, reassuring investors about disinflation progress and giving the Federal Reserve more flexibility for a less restrictive stance. However, the impact of tariffs has yet to materialize, and inflation could rise again in the coming months.

The Nikkei 225 Index surged 1.2% to surpass 37,200, while the broader Topix Index gained 1% to 2,720 on Thursday, reaching their highest levels in a week. The rally mirrored Wall Street’s rebound, driven by softer-than-expected US inflation data that eased market concerns about the economy. However, investor sentiment remained cautious as US President Donald Trump’s steel and aluminum tariffs took effect on Wednesday, raising fears of a widening global trade war. In Japan, major firms agreed to significant wage hikes for the third consecutive year during annual spring labor negotiations, aiming to help workers manage inflation and address ongoing labor shortages. Technology stocks led the charge following similar moves on Wall Street overnight. Notable gainers included Advantest (+5.9%), Disco (+5.8%), SoftBank Group (+1.7%), Tokyo Electron (+1.8%), and Kioxia Holdings (+2.3%).

The UK Residential Market Survey by RICS revealed that the house price balance—tracking the difference between respondents reporting price increases and those noting declines—posted at +11% in February 2025, falling for the second straight months after a reading of +25% and +21% in December and January respectively. The latest figure also came in way below forecasts of +20%. Despite a modest rise in house prices, the pace of growth appears to have cooled across most regions. However, Northern Ireland, Scotland, and the North West of England remain notable exceptions, with price indicators holding firm in expansionary territory. Looking ahead, market uncertainty may weigh on house prices in the short term. Nevertheless, the year-ahead price expectations balance stands at +47%, suggesting continued optimism about future growth.

US recorded a budget deficit of $307 billion in February 2025, surpassing the $296.2 billion shortfall from the same month a year earlier. February's figure slightly exceeded market expectations of a $303.2 billion gap. Government receipts reached a record $296 billion for the month, up 9% from the previous year. Meanwhile, expenditures also hit a new high of $603 billion, marking a 6% increase year-over-year. February's spending increase was primarily driven by higher interest payments on public debt, expanded Child Tax Credit disbursements, and increased Social Security payments, partly due to a 2.5% cost-of-living adjustment for 2025. After adjusting for calendar variations, the deficit stood at $311 billion, reflecting a 3% rise from February 2024. Year-to-date government revenue rose 2% to a record $1.893 trillion, while spending surged 13% to a record $3.039 trillion.

The Bank of Canada cut its key interest rate by 25bps to 2.75% in its March decision, as expected and previously signaled, to mark 225bps in rate cuts since the start of its loosening cycle in June 2024. The Governing Council noted that the Canadian economy grew more than expected in the fourth quarter with support from the past cuts in the policy rate, but growth is expected to slow at the turn of the year due to increasing trade conflict with the United States. The bank also noted that the continuously changing tariff threats from the US hurt gauges of consumer confidence and investment expectations, which are expected to erase the strong economic activity triggered by firms attempting to undercut trade barriers. In the meantime, the end of tax credits are expected to drive incoming inflation gauges to accelerate toward 2.5% after headline inflation remained below the 2% target for multiple months, but core gauges are set to gradually slow amid an expected ease in shelter inflation.

The annual inflation rate in Brazil surged to 5.06% in February of 2025 from 4.56% in the previous month, the highest since September of 2023, and ahead of market expectations of 5%. The increase took place despite public extend the rate's departure from the Central Bank of Brazil's upper threshold tolerance of 4.5%, limiting the room for a less-hawkish reaction to the slowdown in GDP growth. Consumer prices rebounded for housing and utilities (3.78% vs -0.36% in January) amid a softer impact from temporary credits on electricity bills by the government, which drove power costs to rebound sharply (0.33% vs -13.98%). Inflation also accelerated for food and beverages (7.25% vs 7%), clothing (2.95% vs 2.49%), and household maintenance goods and services (1.51% vs 0.99%). On the other hand, transportation inflation slowed slightly (5.21% vs 5.32%). From the previous month, consumer prices rose by 1.3%.