March 21st, 2025

Global economy on edge: What it signals for investors amid economic uncertainty

The global financial landscape today, March 21, 2025, is a complex tapestry woven with threads of uncertainty, cautious optimism, and shifting economic priorities. Let’s unpack this and offer my perspective on what’s driving these dynamics, where things might be headed, and what it all means for investors, policymakers, and everyday people keeping an eye on their financial futures.

Global risk sentiment and central bank ambiguity

The global risk sentiment being described as “tentative” feels like an apt reflection of the moment we’re in. Central bank meetings, which are typically a cornerstone for market stability, seem to have left us with more ambiguity than clarity. It’s not uncommon for these gatherings—whether it’s the Federal Reserve, the European Central Bank, or others—to set the tone for monetary policy expectations, influencing everything from interest rates to currency strength.

But when they raise “more questions than answers,” as the Market Wrap notes, it signals a lack of consensus or a hesitancy to commit to bold moves. Perhaps central bankers are grappling with the same uncertainties as the rest of us: inflationary pressures that refuse to fully subside, geopolitical tensions exacerbated by trade policies, and a global economy that’s still finding its footing post-pandemic.

My take is that this ambiguity is less about indecision and more about a deliberate wait-and-see approach. Central banks are likely holding their cards close, waiting for clearer signals from corporate earnings and trade developments before making significant policy shifts.

Corporate earnings, tariffs, and market reactions

Speaking of corporate earnings, they’re poised to be the next big litmus test for the markets. Investors are hungry for guidance, and rightly so. With tariff fears casting a long shadow, the performance of major companies could either bolster confidence or deepen the unease.

In the US, where the MSCI US index slipped by 0.2 per cent, the energy sector’s modest 0.4 per cent gain stands out as a bright spot. This uptick aligns with the rise in Brent crude prices to US$75 per barrel, fuelled by OPEC+’s new schedule for oil output cuts.

It’s a reminder that energy markets remain a critical driver of sentiment, especially as supply constraints—like the US sanctions on a Chinese refinery tied to Iranian oil—tighten the screws further. For American investors, the upcoming earnings season will be a chance to see if companies can navigate these headwinds, particularly with new tariffs looming on the horizon.

Those tariffs, announced by US President Donald Trump to take effect on April 2, are a game-changer. The promise of both broad reciprocal tariffs and sector-specific measures suggests a continuation of his administration’s aggressive trade stance.

From my perspective, this move is less about economic protectionism in a vacuum and more about geopolitical leverage. Trump’s strategy seems to hinge on using tariffs as a bargaining chip—pressuring trading partners into concessions while signaling strength to domestic audiences. The timing, just over a week from now, adds urgency to the mix.

Markets hate uncertainty, and with Asian equities already showing mixed responses and US equity futures pointing to a flat open, it’s clear that investors are bracing for turbulence. The delay of the European Union’s proposed tariff on American whiskey this week feels like a small reprieve, perhaps a diplomatic nod to avoid escalating tensions further, but it’s a drop in the bucket compared to the broader tariff storm brewing.

In China, the focus on bellwethers like Xiaomi Corp. and Tencent Holdings Ltd. is particularly telling. These tech giants have been at the heart of China’s recent stock surge, a rally that’s defied global headwinds to some extent. Investors are now asking whether this momentum is sustainable or if it’s a house of cards built on speculative exuberance.

My view is that China’s market resilience reflects a mix of domestic policy support and a pivot by companies to diversify away from US-centric supply chains—a direct response to past tariff pressures. Xiaomi’s push into emerging markets and Tencent’s dominance in digital ecosystems could provide the earnings firepower needed to keep the rally alive. But if these reports disappoint, it might expose cracks in China’s economic facade, especially as US sanctions and tariffs tighten the noose on key sectors like refining.

Financial indicators and the energy-crypto divide

Shifting to the financial indicators, the US Treasury yields dropping—with the 10-year at 4.24 per cent and the 2-year at 3.96 per cent—suggests a flight to safety amid the uncertainty. Lower yields typically signal that investors are seeking the relative security of government bonds over riskier assets, a trend reinforced by the US Dollar index’s 0.4 per cent gain as it consolidates recent losses. Gold holding firm above US$3,000 per ounce further underscores this cautious mood—it’s the classic safe-haven play.

Yet, there’s a paradox here: Brent crude’s 1.7 per cent rise indicates that not all risk assets are out of favour. My interpretation is that we’re seeing a bifurcated market—energy and commodities holding up due to supply-side dynamics, while equities and bonds reflect broader trepidation about growth prospects.

Now, let’s dive into the cryptocurrency angle, which adds another layer of intrigue. Bitcoin’s market sentiment hitting a two-year low, as per CryptoQuant’s Bull Score Index of 20, is a stark warning. This index, blending ten metrics like network activity and investor behaviour, paints a picture of a “weak environment” unlikely to support a sustained rally.

Historically, Bitcoin needs a score above 60 to fuel significant price surges, and prolonged periods below 40 align with bear markets. As someone who’s tracked crypto’s rollercoaster ride, I see this as a natural ebb in the cycle. The euphoria of past bull runs—often tied to macroeconomic stimulus or institutional adoption—has given way to a sober reality.

Regulatory scrutiny, energy cost debates, and now tariff-induced economic uncertainty could be dampening enthusiasm. For Bitcoin holders, this might feel like a gut punch, but it’s not necessarily a death knell. Markets move in waves, and a bearish phase could set the stage for a stronger rebound if fundamentals like adoption or halving effects kick in later.

Ethereum, meanwhile, offers a glimmer of hope amid the gloom. Its price hovering around US$1,970, with a key support level at US$1,861, suggests resilience. The nine per cent recovery earlier this week, followed by a 3.5 per cent dip, shows volatility but also potential. If that US$1,861 support holds, a push toward the March 7 high of US$2,258 isn’t out of the question. The technicals back this up: the RSI climbing to 40 from an oversold 30 indicates fading bearish momentum, though it needs to break 50 for a confirmed recovery.

The MACD’s bullish crossover and rising green histograms above zero add to the case for upward strength. From my standpoint, Ethereum’s outlook hinges on broader market sentiment and its ability to differentiate itself from Bitcoin’s struggles. If tariff fears ease or corporate earnings surprise to the upside, ETH could ride that wave. But a break below US$1,861 would open the door to a drop toward US$1,700—a level that could test the resolve of even the most ardent HODLers.

The interconnectedness of markets

Stepping back, what strikes me most about this Market Wrap is the interconnectedness of it all. Tariffs don’t just affect trade balances; they ripple through equity markets, commodity prices, and even cryptocurrencies. Central bank hesitancy amplifies the noise, leaving corporate earnings as the next beacon.

My point of view is cautiously pragmatic: we’re in a transitional phase where old playbooks—whether for stocks, bonds, or crypto—are being rewritten. Investors should watch China’s tech giants for signs of durability, lean into energy’s relative strength, and brace for tariff-driven volatility. For crypto enthusiasts, patience might be the best strategy—Bitcoin’s malaise and Ethereum’s teetering recovery suggest a market in purgatory, awaiting a catalyst.

In conclusion, the global economy today feels like a tightrope walk. The stakes are high, and the safety net is fraying. I see my role as cutting through the noise to spotlight the data and trends that matter. Right now, that means recognising the weight of tariffs, the pivotal role of earnings, and the fragile state of risk assets like crypto.

We’re not in freefall, but we’re not on solid ground either—April 2, when those tariffs hit, could be the tipping point that defines the next chapter.

Source: https://e27.co/global-economy-on-edge-what-it-signals-for-investors-amid-economic-uncertainty-20250321/

Anndy Lian

Anndy Lian is an early blockchain adopter and experienced serial entrepreneur who is known for his work in the government sector. He is a best selling book author- “NFT: From Zero to Hero” and “Blockchain Revolution 2030”.

Currently, he is appointed as the Chief Digital Advisor at Mongolia Productivity Organization, championing national digitization. Prior to his current appointments, he was the Chairman of BigONE Exchange, a global top 30 ranked crypto spot exchange and was also the Advisory Board Member for Hyundai DAC, the blockchain arm of South Korea’s largest car manufacturer Hyundai Motor Group. Lian played a pivotal role as the Blockchain Advisor for Asian Productivity Organisation (APO), an intergovernmental organization committed to improving productivity in the Asia-Pacific region.

An avid supporter of incubating start-ups, Anndy has also been a private investor for the past eight years. With a growth investment mindset, Anndy strategically demonstrates this in the companies he chooses to be involved with. He believes that what he is doing through blockchain technology currently will revolutionise and redefine traditional businesses. He also believes that the blockchain industry has to be “redecentralised”.

www.anndy.com

j j j

March 17th, 2025

Europe rises, Asia watches, Bitcoin sideways and gold shines: A world on edge

The recent rebound in risk sentiment and the relief rally in US markets, spurred by the easing of fears surrounding a potential government shutdown. The developments over the past few days paint a fascinating, albeit complex, picture of an interconnected global financial system grappling with uncertainty, inflationary pressures, and shifting geopolitical dynamics.

Let’s dive into the details and unpack what this all means, both for the immediate future and the broader economic landscape.

The S&P 500’s 2.1 per cent surge last Friday was a welcome reprieve after it closed in a technical recession the previous day—a term that, while not officially signalling a full-blown economic downturn, certainly rattled investors. The rally was broad-based, with most sectors finishing in positive territory, reflecting a collective sigh of relief that a government shutdown, which could have paralysed federal operations and dented market confidence, appears to have been averted, at least for now. This kind of market behaviour is classic: when a looming threat dissipates, investors pile back in, eager to capitalise on discounted stocks.

Yet, beneath this optimism lies a more troubling undercurrent—US consumer sentiment has plummeted to its lowest level in over two years. The preliminary March sentiment index dropped to 57.9, a stark indicator that everyday Americans are growing increasingly anxious about the economy. This apprehension isn’t unfounded.

With tariffs looming as a potential disruptor, consumers are bracing for higher prices, a fear underscored by their expectation that inflation will climb to 3.9 per cent annually over the next five to ten years. That’s a significant jump from last month’s 3.5 per cent and the highest long-term inflation expectation in over three decades. It’s hard not to see this as a red flag—when consumers start anticipating sustained price increases, it can become a self-fulfilling prophecy as spending habits shift and businesses adjust accordingly.

Meanwhile, the Federal Reserve finds itself in a delicate balancing act. Despite these inflationary fears and a step-down in economic growth, the Fed is widely expected to hold steady at its Wednesday meeting, signalling patience rather than panic. This isn’t surprising—Fed Chair Jerome Powell has consistently emphasised a data-driven approach, and with inflation still above the two per cent target but not spiraling out of control, a pause makes sense.

However, the bond market tells a slightly different story. The yield on the 10-year US Treasury note ticked up 5 basis points to 4.31 per cent, a subtle but telling sign that investors are demanding higher returns to compensate for perceived risks. It’s a reminder that while equity markets may cheer short-term wins, the fixed-income crowd remains wary of longer-term uncertainties, particularly around fiscal policy and trade disruptions.

Speaking of trade, the commodities market offers another lens into this evolving narrative. Gold, that perennial safe-haven asset, climbed 0.5 per cent to breach the US$3,000-per-ounce mark for the first time—a milestone that speaks volumes about investor unease. With US policy uncertainty intensifying, particularly around tariffs and their potential to upend global supply chains, gold’s ascent feels less like a speculative bubble and more like a rational hedge.

Brent crude, too, edged higher by 0.3 per cent to US$71.61 per barrel, buoyed by the dual forces of tighter supply expectations (thanks to trade war jitters) and OPEC+’s decision to ramp up output. It’s a delicate dance—higher oil prices could stoke inflation further, yet they also reflect a market betting on sustained demand despite economic headwinds.

Across the Atlantic, European equities caught a tailwind from positive political developments in Germany, where Chancellor-in-waiting Friedrich Merz announced a deal with the Green Party on a defense and infrastructure package. This news lifted the EUR/USD pair by 0.3 per cent to 1.0876, suggesting a flicker of confidence in Europe’s economic stability amid its own challenges.

Asia, too, is showing signs of resilience. Equities there regained their footing last Friday and continued to trade higher in early sessions today, March 17, 2025. Investors are laser-focused on China’s upcoming data dump—fixed asset investments, retail sales, industrial production, and home prices—which could provide critical clues about the health of the world’s second-largest economy. Any weakness in these figures could ripple across global markets, especially given China’s role as a manufacturing powerhouse and consumer market. For now, though, the mood in Asia seems cautiously optimistic, mirroring the relief rally in the US.

But let’s pivot to a wildcard in this global financial tapestry: Bitcoin and its contrasting fates in South Korea and the United States. The Bank of Korea (BOK) has firmly rejected the idea of incorporating Bitcoin into its foreign exchange reserves, citing its wild price swings and the hefty transaction costs of converting it to cash.

The BOK’s stance aligns with the International Monetary Fund’s guidelines, which prioritise liquidity and risk management—attributes Bitcoin, with its volatility, struggles to meet. This conservative approach stands in sharp contrast to the US, where President Donald Trump recently signed an executive order establishing a Strategic Bitcoin Reserve.

It’s a bold move, signalling America’s willingness to embrace cryptocurrency as a strategic asset, perhaps as a hedge against dollar weakness or a play to attract blockchain investment. The divergence is striking: South Korea sees Bitcoin as a liability, while the US views it as an opportunity.

Then there’s North Korea, stealthily emerging as a major Bitcoin player through the exploits of the Lazarus Group. Their audacious US$1.4 billion heist from Bybit on February 21, 2025—mostly in Ethereum, later partially converted to Bitcoin—has catapulted the rogue state into the ranks of top government holders, with 13,562 BTC valued at US$1.14 billion.

It’s a chilling reminder of how cybercrime can reshape national wealth, turning digital theft into a treasury-building exercise. This development adds another layer of complexity to Bitcoin’s role in global finance, blurring the lines between legitimate investment and illicit gain.

Bitcoin’s price action itself remains a rollercoaster. I am eyeing a key resistance level at US$86,700, with failure to break through potentially sending it tumbling to US$77,859 or even US$71,011 if selling pressure mounts. Last week’s choppy movements reflect a market caught between bullish enthusiasm and bearish caution.

CryptoQuant analyst Darkfost noted on X that Bitcoin’s open interest hit a record US$33 billion in January, only to see nearly US$10 billion wiped out between February 20 and March 4 amid political uncertainty tied to Trump’s actions. This 90-day futures open interest drop of -14 per cent suggests a market reset, clearing out excess leverage and possibly setting the stage for a more stable recovery. It’s a pattern we’ve seen before—painful liquidations paving the way for cautious growth.

I see a world at a crossroads. The relief rally in US markets is a fleeting victory, a sugar high that masks deeper structural concerns. Consumer sentiment’s nosedive and rising inflation expectations signal a populace bracing for tougher times, potentially exacerbated by tariffs that could jack up costs across the board.

The Fed’s patience is prudent, but it risks being perceived as indecision if inflation accelerates unchecked. Gold’s record highs and oil’s upward creep underscore a flight to safety and supply-side worries, while Europe and Asia’s gains hint at a fragile global recovery that could easily falter. Bitcoin’s tale—shunned by South Korea, embraced by the US, and hoarded by North Korea—epitomises the chaos and opportunity of our digital age.

“For investors, it’s a time to tread carefully, balancing short-term gains against long-term risks. For the rest of us, it’s a front-row seat to a high-stakes economic drama where the next act is anyone’s guess.” — Anndy Lian

Source: https://e27.co/europe-rises-asia-watches-bitcoin-sideways-and-gold-shines-a-world-on-edge-20250317/

Anndy Lian

www.anndy.com

j j j

March 4th, 2025

From crypto euphoria to economic unease: A world on edge in March 2025

The question at hand—analysing the retreat of global risk sentiment amid soft US economic data, tariff threats, and shifting dynamics in digital asset markets—offers a fascinating lens into the interconnectedness of today’s economic landscape. Below, I’ll provide my detailed take on these events, weaving together the facts, data, and my own perspective, dissecting the ebb and flow of markets and policy decisions.

Let’s start with the US economic data, which has undeniably cast a shadow over global risk sentiment. The latest ISM manufacturing index figures were a mixed bag, but the overriding tone was one of disappointment. The headline index underwhelmed market expectations, signalling a slowdown in manufacturing activity—a critical pillar of the US economy.

Even more concerning were the sub-indices: employment and new orders, both vital indicators of future growth, slipped unexpectedly into contraction territory. This wasn’t just a minor blip; it hinted at deeper structural challenges, potentially exacerbated by uncertainty over trade policies.

Meanwhile, the prices index surged, a move that caught many off guard. This spike aligns with growing fears about inflationary pressures tied to President Donald Trump’s tariff rhetoric. When you consider that tariffs on imports from Canada, Mexico, and China could raise input costs for manufacturers, it’s no surprise that the prices index is flashing warning signs. My view here is that the US economy is at a crossroads—softening activity paired with rising costs could squeeze profit margins and dampen business confidence further, especially if trade tensions escalate.

The market reaction to this data, compounded by Trump’s tariff announcements, was swift and brutal. Stocks sank to session lows, with the MSCI US index posting its worst day of the year so far, down 1.8 per cent. Sector-specific declines were even more pronounced—Energy, Information Technology, and Consumer Discretionary took the hardest hits, dropping 3.5 per cent, 3.5 per cent, and 2.3 per cent, respectively.

This wasn’t random; these sectors are particularly exposed to trade disruptions. Energy firms, for instance, rely on stable commodity flows, while tech and consumer discretionary companies often depend on global supply chains that could be upended by tariffs. Trump’s declaration that there’s “no room left” to negotiate a halt to the 25 per cent tariffs on Canada and Mexico, alongside an additional 10 per cent levy on Chinese goods, sent a clear message: he’s doubling down on protectionism.

From my perspective, this stance risks igniting a broader trade war, one that could reverberate beyond US borders. Canada and Mexico, key trading partners under the USMCA, might retaliate, while China’s response could further complicate an already fragile global trade environment. The immediate market sell-off reflects this fear, but I suspect the longer-term impact—on growth, inflation, and investor confidence—could be even more profound.

Turning to the bond market, we saw a flight to safety that pushed Treasury yields lower. The benchmark 10-year Treasury yield slid more than 6 basis points to 4.16 per cent, while the 2-year yield dipped about 4 basis points to 3.96 per cent. This drop suggests investors are seeking refuge amid the uncertainty, betting that weaker economic data and trade risks might force the Federal Reserve to reconsider its rate path.

Personally, I think this yield movement also reflects a growing disconnect between market expectations and Fed rhetoric. The Fed has signalled a cautious approach to rate cuts, but if manufacturing continues to falter and tariffs stoke inflation, we could see a tricky balancing act ahead—supporting growth without letting price pressures spiral out of control.

The US Dollar Index, meanwhile, slipped 0.8 per cent, a move I attribute to both the softening data and a broader risk-off mood. A weaker dollar, however, provided a tailwind for gold, which rose 1.2per cent after hitting a three-week low in the prior session. Gold’s resurgence as a safe-haven asset makes sense here; with trade wars looming and economic signals faltering, investors are hedging their bets. I’ve always viewed gold as a barometer of fear, and its uptick tells me that unease is simmering beneath the surface.

Commodities offered another angle on this story, with Brent crude plunging 2.1 per cent after OPEC+ confirmed plans to ramp up production starting in April. This decision defied earlier expectations of a delay, adding downward pressure on oil prices already rattled by tariff concerns.

From my standpoint, OPEC+’s move is a calculated gamble—boosting supply could stabilise markets in the short term, but if global demand weakens due to trade disruptions, they might overshoot. Energy stocks, already reeling from the MSCI US decline, felt this sting acutely. It’s a reminder that even as US-centric policies dominate headlines, global players like OPEC+ retain significant sway over market dynamics.

Across the Atlantic, Europe presented a contrasting picture. Equity indices closed near session highs, buoyed by gains in defense stocks as hopes of increased military spending grew. This optimism ties into the fragile geopolitical landscape, particularly Trump’s decision to pause US military aid to Ukraine—a move that followed a contentious Oval Office meeting. I see this as a pivotal shift; with US support waning, European nations may feel compelled to bolster their own defenses, especially amid ongoing tensions with Russia.

On the economic front, Eurozone inflation eased to 2.4 per cent year-over-year in February, down from 2.5 per cent in January, slightly above consensus forecasts. This modest cooling keeps the European Central Bank (ECB) on track for a rate cut at its upcoming meeting, a view shared by most market participants.

I’d argue this is a sensible move—Europe’s economy needs stimulus to offset external pressures, including potential fallout from US tariffs. The brighter equity performance in Europe, against the US’s gloom, underscores how regional dynamics can diverge even in a globally linked market.

Then there’s the wild card: digital assets. The euphoria surrounding Trump’s March 2 announcement of a strategic crypto reserve—featuring Bitcoin, Ether, XRP, SOL, and ADA—quickly gave way to skepticism by March 3. Initially, the news sparked a rally, with cryptocurrencies rebounding from their worst month since 2022 (the Bloomberg Galaxy Crypto Index had slumped nearly 28 per cent in February).

Trump’s inclusion of lesser-known tokens like XRP, SOL, and ADA alongside heavyweights Bitcoin and Ether was bold, even visionary to some. It suggested a US government embrace of digital assets as a strategic asset class, potentially legitimising crypto in ways unseen before. But as the day wore on, doubts crept in. Investors began questioning the feasibility and merits of holding such a diverse basket, especially as tariff news soured risk sentiment.

By late afternoon in New York, most of the prior day’s gains evaporated, with the Nasdaq 100 Index—tech-heavy and crypto-correlated—dropping over 2 per cent. My take? The crypto reserve idea is intriguing, but its timing couldn’t be worse. With tariffs threatening economic stability, the appetite for speculative assets like crypto wanes. I suspect this volatility reflects a broader tension: crypto’s promise as a hedge or store of value versus its sensitivity to macroeconomic shocks.

Stepping back, the global risk sentiment retreat feels like a confluence of self-inflicted wounds and external shocks. The US’s soft data patch—evident in the ISM figures—signals a domestic slowdown that tariffs could exacerbate. Trump’s hardline trade stance, while politically resonant, risks alienating allies and inflating costs at a delicate moment. Europe’s relative resilience offers some hope, but it’s tempered by geopolitical fragility, notably around Ukraine.

And in the digital realm, crypto’s rollercoaster ride mirrors the broader uncertainty. Asian markets, opening lower, and US futures, hinting at a rebound, suggest we’re in for more choppiness. As a journalist, I’d say this moment demands vigilance—markets are pricing in risks, but the full fallout of these policies remains unclear. If Trump’s tariffs stick, we could see a prolonged drag on growth; if they falter under pressure, sentiment might recover.

For now, I’m watching the Fed, the ECB, and the crypto space closely—each holds a piece of this intricate puzzle.

Source: https://e27.co/from-crypto-euphoria-to-economic-unease-a-world-on-edge-in-march-2025-20250304/