Natural gas prices jumped to a 2-year-high. The Mexican peso depreciates to a 3-year low.

The Dow Jones (US30) was up 0.16% on Wednesday. The S&P 500 Index (US500) was up 0.24%. The Nasdaq Technology Index (US100) was up 0.05%. The minutes from the Fed’s January meeting emphasized that policymakers are drawing attention to the need for more evidence of sustained disinflation but warned of inflation risks from potential changes in trade, immigration, geopolitical shocks, and high household spending. The minutes echoed Chairman Powell’s previous statement that the Fed was in no hurry to cut rates further. At the same time, President Donald Trump announced plans to impose 25 percent tariffs on imports of automobiles, semiconductors, and pharmaceuticals beginning April 2. Investors are currently factoring in one rate cut for 2025, with some suggesting the possibility of a second.

The Mexican peso (MXN) weakened to 20.4 per US dollar, nearing a three-year low, amid increased risk aversion following renewed tariff threats from US President Donald Trump. The peso was also pressured by the Bank of Mexico’s (Banxico) recent 50 bps rate cut to 9.50% and its recommendations for further easing, which could narrow the policy gap with the Fed, whose cautious stance reflects stalled disinflation.

Equity markets in Europe mostly fell on Wednesday. Germany’s DAX (DE40) fell by 1.80%, France’s CAC 40 (FR40) closed down 1.17%, Spain’s IBEX 35 (ES35) lost 1.63%, and the UK’s FTSE 100 (UK100) closed 0.63% yesterday. On the political front, European leaders held a second, larger summit in Paris to discuss defense spending plans after US authorities signaled a reduction in defense integration and a softening stance towards Russia.

WTI crude prices fell below $72 a barrel on Thursday, halting three days of gains, after an industry report showed another increase in US crude inventories. API data showed that US crude inventories rose by more than 9 million barrels last week, well above expectations for a 2.8 million barrel increase. If official data is confirmed later today, this could be the fourth consecutive weekly increase.

The US natural gas (XNG) prices climbed to $4.3/MMBtu, nearing a two-year high reached on January 16, as extreme cold weather boosted heating demand and froze oil and gas wells, reducing production. Over the past 13 days, production has fallen by 6.7 Bcf/d to a four-week low of 100.1 Bcf/d.

Palladium (XPD) prices climbed above $1,000 an ounce, extending their 13% gain this year, led by the precious metal’s rally amid growing trade war fears. US President Trump’s tariff threats against countries that continue to impose duties against the US have raised fears of a contraction in global trade, prompting investors to buy safe-haven assets. At the same time, dovish policies from central banks, including the ECB, PBoC, and others, also supported prices.

Asian markets were mostly declining on Wednesday. Japan’s Nikkei 225 (JP225) was down 0.27%, China’s FTSE China A50 (CHA50) was up 0.26%, Hong Kong’s Hang Seng (HK50) decreased by 0.14% cheaper, and Australia’s ASX 200 (AU200) was negative 0.73% for yesterday.

China’s central bank (PBoC) left key lending rates unchanged for the fourth consecutive month in February 2025 amid fluctuations in the yuan and the continued impact of US President Trump’s aggressive trade policies. The one-year prime rate, which serves as a benchmark for most corporate and home loans, remained unchanged at 3.1%, while the five-year prime rate, used as a benchmark for real estate mortgages, remained unchanged at 3.6%. These rates remain at record lows after declines in October and July 2024.

Malaysia’s trade surplus narrowed to MYR3.6 billion in January 2025 from MYR10.2 billion in the same month in 2023, well below market estimates that suggested an increase of MYR14.1 billion. This was the smallest trade surplus since April 2020, when the trade balance showed a deficit, mainly due to a surge in imports.

Australia’s seasonally adjusted unemployment rate rose to 4.1% in January 2025 from December’s 4.0%, matching market estimates. This is the highest unemployment rate since October last year, as the number of unemployed rose by 23,400 to 627,500.