Tariff concerns were once again a major driver of market moves. President Trump reiterated that the 25% tariffs on imports from Canada and Mexico would come into effect in March, having been postponed for 30 days, plus an additional 10% duty on Chinese imports.
Earlier, Trump had also threatened a 25% tariff on automobiles and other goods from the European Union, unnerving investors over the prospect of an escalating trade war. US stocks ended negative (-1.6 %).
Despite the tariff threats, February was a positive month for equity markets overall. This was particularly the case for China (+11,7%) and Poland (+8,2%). In China, the return to grace of the technology sector and the hope of a deal in the trade war explained the rebound. Poland benefited from the announcement of significant investments that improved economic prospects. The hope for ending the war in Ukraine is also optimistic for the Polish market.
Indonesia’s growth disappointed
On the other hand, Indonesia was the main disappointment in the last month after the economic growth numbers came out short. Despite that, Indonesia remains one of the most dynamic of the major emerging economies. This is all the more impressive as inflationary pressures remain particularly low. In January, annual inflation was less than 0.8%, a level that would make the West jealous.
A few notable developments in the bond market are to be noted. The Bank of Japan's continued policy rate hike has led to a sharp rise in long-term interest rates.
Interest rates lowered again in Europe
In the Eurozone, interest rates continue to decline, and at the beginning of March, the European Central Bank once again reduced its key interest rates by 0.25%. In the US, the 10-year bond rate ended in February at around 4.2%, the lowest level since December and far from the nearly 4.8% reached in January when investors tried to anticipate the impact of Donald Trump's policies.
Although the fears around the trade war promote dark clouds on the horizon, our selection covers different types of assets and geographies and should be considered for the long term.
