The US economy continues to show resilience even as the labor market experiences a gradual slowdown. As global economic conditions shift, the Federal Reserve is expected to maintain its interest rates during the March meeting, with predictions of no more than one or two rate cuts in 2025. Meanwhile, the GBP/USD currently trades in negative territory at approximately 1.2350, reflecting investor caution amid these developments.
In a significant move, US President Donald Trump has imposed a flat 25% import duty on steel and aluminum. These levies came into force late Monday night, causing ripples across global markets. Despite initial concerns, major stock markets seemed to brush off fears related to tariffs on Monday. Nevertheless, the S&P 500 and Eurostoxx 50 index are anticipated to open lower today, indicating lingering uncertainty among traders.
The Reserve Bank of Australia (RBA) faces its own challenges as it grapples with falling inflation. With a rate cut virtually assured at the upcoming RBA meeting, the central bank is under pressure to join the easing cycle already embraced by other major central banks. The NAB survey has shown a silver lining, noting that retail spending has improved, offering some optimism for Australia's economic outlook.
In financial markets, gold experienced a downward correction. After reaching a record high of $2,942 in the Asian session on Tuesday, the precious metal’s price adjusted lower, hinting at shifting investor sentiment. Meanwhile, consumer confidence in Australia saw a slight improvement. The Westpac consumer sentiment index rose by 0.1% in February to reach 92.2 points, suggesting a modest increase in consumer optimism.