ISTANBUL 

Global markets were mixed on Thursday as the inflation-recession dilemma persists worldwide. The US tariffs on its major trading partners are fueling uncertainty over economic policies, prompting investors to be cautious, while all eyes turn to Federal Reserve Chair Jerome Powell’s statements at the Monetary Policy Forum.

US President Donald Trump amended his tariff order on Mexico and Canada, which imposed a 25% tariff on March 4, exempting goods that comply with the U.S.-Mexico-Canada Agreement until April 2.

Automobiles meeting the agreement’s requirements are also exempt from tariffs, while the tariff on Canadian potash, a type of fertilizer, was reduced to 10%.

Trump added that aluminum and steel tariffs will not be amended and will take effect next week.

Canadian Prime Minister Justin Trudeau said the “trade war that launched by the US” will continue “for the foreseeable future.”

Analysts say that non-farm payrolls to be announced on Friday may provide some insight into the US economy and while Powell had said the Fed was in no rush to adjust its policy stance, there may be some clues revealed in his speech at the University of Chicago.

Meanwhile, US Treasury Secretary Scott Bessent stated that the Trump administration’s policies do not aim to make financial regulations more efficient. He also emphasized that international economic relations that don’t benefit the American people need to be reconsidered – something tariffs aim to address.

Bessent said that the Treasury has identified non-tariff barriers, legislation that unfairly penalize exporters, and government policies that suppress competition and wages, and currency manipulations that allow for persistent trade surpluses in other countries. He added that tariffs are mere “one-time” price adjustments that are short-term.

Atlanta Fed President Raphael Bostic said the bank should be patient until summer, as it will take months to assess the impact of Trump’s policies on the economy, urging that rates should remain stable until at least the end of spring.

Trump has established the “Crypto Strategic Reserve” and the “Digital Asset Stockpile” in a recent executive order.

Trump-appointed “White House Crypto and Artificial Intelligence (AI) Czar,” South African tech billionaire David Sacks said that Trump is keeping the promises he made. 

US jobless claims, trade deficit

Meanwhile, initial jobless claims fell to 221,000 last week, below market estimates. Despite the decline, concerns of a slowdown in the US economy persist.

US-based employers’ layoffs soared 245% month-on-month in February, reaching 172,017, according to consultancy firm Challenger, Gray & Christmas. The rise was led by layoffs of federal workers, canceled contracts, trade war concerns, and bankruptcies.

The US foreign trade deficit reached an all-time high of $131.4 billion, rising 34% month-on-month in January.

In corporate news, semiconductor maker Marvell Technology's revenue forecast matched estimates, leaving investors nervous about AI investments as chip stocks decline.

Marvell Technology shares fell 19.8%, Broadcom 6.3%, Nvidia 5.7, and AMD 2.8%.

The US 10-year futures bond was at 4.26 and the US Dollar Index fell 1.6% to 103.8 on Thursday, its highest decline since November 2024 and then started Friday on a flat course at 104.

Gold closed Thursday at $2,909, down 0.5%, and is currently trading at $2,910, up 0.1%.

Brent crude oil started Friday at $69.3 per barrel, up 0.2%.

The S&P 500 fell 1.78%, the Nasdaq 2.61%, and the Dow Jones 0.99% on Thursday, starting Friday on a positive course. 

Eurozone growth

In Europe, all eyes were on eurozone growth data

The European Central Bank cut three key policy rates by 25 basis points on Thursday. European Central Bank President Christine Lagarde said the eurozone's manufacturing industry is a barrier to growth, noting that the labor market remains strong and the unemployment rate is at a historic low. She added that trade tensions and uncertainties also hinder growth.

Lagarde said more defense and infrastructure spending could boost the eurozone’s growth, urging the EU to enter tariff negotiations with the US, as tariffs harm the economy.

EU Commission President Ursula von der Leyen said it is in the US’ interest to reach peace in Ukraine, with EU support to Ukraine being key.

Meanwhile, the DAX 40 rose 1.47%, the CAC 40 0.29%, and the FTSE MIB 30 0.68%, while the FTSE 100 fell 0.8% on Thursday. European futures started Friday on a mixed course.

In Asia, China’s economic administration said it is ready to implement strategies and fiscal and monetary policies to support the country’s growth as trade wars escalate with tariff hikes and other uncertainties due to Trump.

Chinese Commerce Minister Wang Wentao stated there would be “no winners” in a trade war between China and the US.

“Coercion and threats will not work on China, nor will they scare China – China’s determination to defend its own interests is unswerving,” he said. “If the American side goes further down this wrong path, we will continue to respond in kind, we will fight to the end.”  

Japan, Türkiye

Meanwhile, Japanese Finance Minister Katsunobu Kato said the administration will take appropriate measures against excessive movements in the foreign exchange market. As for rate hikes, Kato noted that it is up to the Bank of Japan.

The Nikkei 225 fell 2.3%, and the Kospi Index dropped 0.4%, while the Shanghai Composite Index climbed 0.1% and the Hang Seng Index rose by 0.7%.

In Türkiye, the Borsa Istanbul stock exchange BIST 100 rose 2.65% on Thursday.

The Turkish Central Bank cut its policy rate – the one-week repo rate – by 250 basis points to 42.5%.

The bank cited “relatively low” core goods inflation and slowing services inflation after the increase in January, while domestic demand was higher than expected in the fourth quarter, supporting disinflation.

Despite improving inflation estimates and pricing behavior, risks remain for disinflation, but the decisive stance in monetary policy strengthened the disinflation process by balancing domestic demand, the appreciation of the Turkish lira, and improvements in inflation estimates, the bank said.

The US dollar/Turkish lira exchange rate closed Thursday at 36.4030, opening Friday at 36.4910, up 0.2%.