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Friday saw declines in Asia-Pacific markets as U.S. President Donald Trump confirmed the imposition of tariffs on goods from Mexico and Canada, which would take effect the following week.

 

In Australia, the S&P/ASX 200 index fell by 1.16%, concluding the day at 8,172.4.

 

The Nikkei 225 in Japan dropped by 2.88% to 37,155.5, while the Topix decreased by 1.98% to 2,682.09. South Korea's Kospi saw a reduction of 3.39% to 2,532.78, and the Kosdaq, focusing on smaller firms, declined by 3.49% to conclude at 743.96.

 

The Hang Seng Index in Hong Kong decreased by 3.55%, and China’s CSI 300 index fell by 1.97%, closing at 3,890.05.

 

Stocks in India also slipped, with the Nifty 50 index down by 0.99%.

 

The value of Bitcoin declined by 1.79% to $82,811.12, reflecting nearly a 25% drop since its record high in January.

 

On Thursday, Trump announced the impending enforcement of 25% tariffs on Canada and Mexico on March 4, following a month-long deferment. He noted that these nations had not sufficiently reduced drug trafficking across their borders.

 

Moreover, Trump indicated that China would also face an additional 10% U.S. tariff on products starting the same day, on top of the existing 10% tariffs.

 

In the U.S. overnight, the three major stock indexes closed in negative territory. The S&P 500 ended the day with a 1.59% decline at 5,861.57. This broad market index recorded losses for both the week and the month. The Nasdaq Composite declined by 2.78%, finishing at 18,544.42, impacted by Nvidia’s 8.5% drop.

 

The Dow Jones Industrial Average decreased by 193.62 points, equating to a drop of 0.45%, closing at 43,239.50.

 

Bitcoin's downturn intensified on Friday, marking its lowest level in over three months, erasing gains seen after Donald Trump’s presidential election win.

 

Trading midday in Asia had Bitcoin valued at approximately $79,800, down by 5.25% for the day and approximately 25% from its peak in mid-December.

 

Bitcoin saw a price spike post Trump's November victory where he positioned himself as friendly to cryptocurrency during his campaign.

 

Asian currencies weakened as the U.S. dollar strengthened following President Trump’s confirmation about upcoming tariffs on imports from Mexico and Canada.

 

The dollar index — appraises the U.S. dollar’s strength against major international currencies — climbed 0.12% to 107.36 amid investors seeking more secure options due to tariff-related uncertainties.

 

Against the dollar, the Indonesian rupiah declined by 0.78%, hitting its weakest point since April 2020.

 

Following Nvidia's removal from the $3 trillion market cap status, Asian semiconductor shares experienced reductions.

 

Advantest, a semiconductor testing equipment supplier, dropped nearly 9%, and Tokyo Electron shares fell by 5.1%. Renesas Electronics and Lasertec recorded downturns of 4.43% and 7.19%, respectively.

 

Taiwan Semiconductor Manufacturing Company saw a decrease of 1.89%.

 

Japan observed a robust 3.9% increase in retail sales year-on-year in January, marking the fastest growth rate in almost a year. This surpassed the revised 3.5% increase in December but slightly missed economists’ expectations of 4% as surveyed by Reuters.

 

Tokyo posted a February headline inflation rate of 2.9% year-on-year, down from January’s 3.4%.

 

Core inflation, which excludes fresh food prices, was at 2.2%, slightly beneath the 2.3% forecasted by Reuters. Tokyo’s inflation trends are often seen as indicators of broader national patterns.

 

President Donald Trump communicated via Truth Social that the postponed 25% tariffs on imports from Canada and Mexico are slated to start on March 4, along with an additional 10% tariff on Chinese goods.

 

Trump stated in his post that the tariff implementations are partly due to fentanyl entering the U.S. from these international borders.

 

The Consumer Financial Protection Bureau's Trump-appointed leadership plans to fire nearly all its 1,700 employees while "winding down" the agency, according to testimony from employees.

 

In a trove of statements released late Thursday, federal employees said that the mass layoff was discussed in meetings they attended this month with senior CFPB leaders and members of Elon Musk's so-called Department of Government Efficiency.

 

"My team was directed to assist with terminating the vast majority of CFPB employees as quickly as possible," said an employee identified as Alex Doe, a pseudonym used out of fear of retaliation.

 

Doe said the plan from CFPB leaders and DOGE was to cut the bureau's workforce in three phases. It would first eliminate probationary and term employees, then carry out a wave of about 1,200 layoffs, leaving a skeleton crew of a few hundred workers.

 

"Finally, the Bureau would 'reduce altogether' within 60-90 days by terminating most of its remaining staff," Doe said.

 

The workers' testimony comes at a crucial time for the CFPB, the agency created to protect consumers after the 2008 financial crisis caused by irresponsible lending. Since DOGE operatives first arrived at the CFPB this month, the bureau has shuttered its Washington headquarters, initiated the first round of layoffs and told those who remain to stop nearly all work.

 

The department has also reversed course on several cases where it accused financial firms including Capital One of ripping off customers, dismissing at least four cases Thursday involving billions of dollars in alleged consumer harm.

 

The filings containing the employee statements were made in the case started by a CFPB union, which led to a judge suspending acting Director Russell Vought's moves to shutter the bureau. After the CFPB fired about 200 probationary and term employees, the agency's actions were put on hold until a March 3 hearing.

 

The documents show an apparent disconnect between some of the external messaging from Vought and the behind-the-scenes activity at the bureau.

 

In a motion filed Monday in the case, Vought pushed back against the idea that he planned to eliminate the CFPB.

 

"The predicate to running a 'more streamlined and efficient bureau' is that there will continue to be a CFPB," he wrote.

 

But the Trump administration's plan was to take the CFPB down to the barest minimum staffing required under law: Just five CFPB employees would remain, either in a stand-alone office or folded into another regulatory body, the workers testified.

 

In meetings between Feb. 18 and Feb. 25, "staff were told by Senior Executives that the CFPB would be eliminated except for the five statutorily mandated positions," said another current CFPB employee, this one identified as Drew Doe.

 

"One Senior Executive said that CFPB will become a 'room at Treasury, White House, or Federal Reserve with five men and a phone in it,'" Doe said.

 

Another CFPB employee said that he or she attended a Feb. 13 meeting in which the bureau's chief operating officer, Adam Martinez, stated that the agency was in "wind-down mode."

 

The CFPB employees said that, if directed to by the court, they would provide their names and titles under seal.

 

The bureau has long been a target of Republicans and financial institutions, who have called it a rogue agency that exceeded its legal authority in punishing companies. More recently, Musk has taken up the cause; he posted on his X platform, "RIP CFPB," earlier this month just as his DOGE operatives began their work.

 

In several instances in the testimony, senior CFPB staff appeared to defer to DOGE employees for critical matters.

 

For instance, DOGE worker Jordan Wick "specifically stated" that Musk's ad hoc group wanted a massive round of layoffs by Feb. 14.

 

"The Bureau intended to comply and fire the vast majority of remaining employees on February 14th," Alex Doe said. "The only reason it did not do so is because of this Court's order."

 

In other instances, DOGE workers asked CFPB staff about how deeply they could cut operations while adhering to statutory requirements in areas like consumer response, per testimony from CFPB worker Matthew Pfaff.

 

Despite gaining full access to CFPB systems and data on Feb. 7, the DOGE employees haven't yet completed the cybersecurity and privacy training required by the agency, the employees testified.

 

While Musk and Vought have openly advocated for the termination of the CFPB, only Congress can truly shutter the agency, which was created after lawmakers passed the 2010 Dodd-Frank Act.

 

Vought's moves appear to allow him to claim the CFPB still exists, while sidelining its role by drastically curtailing its ability to supervise companies and respond to complaints.

 

CFPB employees question whether a handful of employees could credibly fulfill the dozens of statutory requirements of the agency, which include responding to millions of consumer complaints filed via web and phone lines, as well as maintaining advocacy offices for military veterans and senior citizens.

 

On Thursday, Jonathan McKernan, President Donald Trump's pick to take over at the CFPB for Vought, told lawmakers including Sen. Elizabeth Warren, the Massachusetts Democrat credited with spurring the agency's creation, that he would "fully and faithfully" enforce laws related to the CFPB's mission.

 

McKernan added that if confirmed by the Senate, he would "rightsize" the CFPB, as well as "refocus it" and "make it accountable."

 

Noting that Vought, who is also head of the Office of Management and Budget, has canceled the lease on the agency's headquarters, Sen. Jack Reed, D.-R.I., told McKernan that he was in a "very difficult position."

 

"You do not appear to have much presidential support or OMB support, and I have this sinking feeling that you're departing Liverpool on the Titanic," Reed said. "Good luck."

The U.S. dollar remained strong on Wednesday due to concerns over tariffs and tense negotiations between Russia and Ukraine, while the New Zealand dollar decreased following a significant interest rate reduction by its central bank.

 

The Reserve Bank of New Zealand cut its key interest rate by 50 basis points to 3.75% on Wednesday, as widely anticipated. This marks a total reduction of 175 basis points since August as the central bank attempts to stimulate a lagging economy and address rising unemployment.

 

The kiwi currency was last down 0.3% at $0.5687 after the rate decision and subsequent comments from the bank indicating potential future cuts.

 

In the broader market, investors evaluated the recent developments in U.S. President Donald Trump's ongoing tariff measures and the uncertainty following the conclusion of initial Russia-Ukraine peace talks, which excluded Kyiv and Europe.

 

A majority of economists surveyed by Reuters this month anticipate another 50-basis-point cut in April.

 

Ukraine's President Volodymyr Zelenskiy asserted that no peace agreement could be made without his involvement. He postponed his trip to Saudi Arabia, originally planned for Wednesday, to March 10 to avoid legitimizing U.S.-Russia discussions.

 

Russia has toughened its stance, specifically demanding assurance that NATO will not grant membership to Kyiv.

 

The Trump administration announced on Tuesday that further discussions with Russia on resolving the war in Ukraine were agreed upon.

 

Expectations of a peace deal had driven the euro to a two-week high last week; however, the EU currency has dropped in recent days, last recorded 0.03% lower at $1.0442.

 

"The euro seems slightly unsettled by the evident differences between the U.S. and Europe over the conflict in Ukraine," commented Sean Callow, senior FX analyst at InTouch Capital Markets.

 

The dollar rose on Tuesday, buoyed by the euro's softness, yet it remains close to a two-month low of 106.56 hit on Friday despite ongoing tariff commitments.

 

Trump announced on Tuesday his intention to apply auto tariffs "in the vicinity of 25%" along with similar duties on semiconductor and pharmaceutical imports.

 

"As long as Trump is perceived as unreliable regarding tariffs, substantial USD long positions will be challenged," Callow remarked.

 

Trump's administration has consistently issued tariffs and threats of tariffs in the initial month of his presidency, creating uncertainty about their domestic and international effects.

 

Investors were awaiting the release of the Federal Reserve's January meeting minutes later that day for insights into policymakers' assessments of the risks associated with a global trade war.

 

Markets have factored in approximately 35 basis points of cuts for 2025.

 

The dollar index, assessing the greenback against a collection of rival currencies, increased by 0.04% to 107.04.

 

The yen gained 0.05% to 152 per dollar. Japan's strong GDP data for October to December released on Monday, along with recent robust inflation figures, have bolstered expectations for rate hikes.

 

The likelihood of a rate hike at the Bank of Japan's July meeting is increasing, yet uncertainties about the speed and scope of continuous tightening remain.

 

The focus will be on board member Hajime Takata, who is slated to deliver remarks on Wednesday, and the release of national CPI data on Friday.

 

Sterling remained steady at $1.2613 after touching a two-month high of $1.2641 in early trading on Wednesday. An inflation report for the UK is due later on Wednesday, following Tuesday's data indicating accelerating British wage growth.

 

The Australian dollar edged down 0.07% to $0.63495 after data revealed that domestic wages increased at the slowest annual rate in more than two years during the fourth quarter.

 

The Reserve Bank of Australia reduced rates as expected on Tuesday but issued a warning regarding further easing.

European stock markets fell on Wednesday as investors analyzed a series of corporate earnings reports and a U.K. inflation reading that surpassed expectations.

 

Stoxx 600 Index: Down 1.08% at 2:55 p.m. in London, marking its largest daily drop in 2025 and pulling back from Tuesday's all-time high close.

 

Key Indices:

• Germany's DAX: +0.28%
• France's CAC 40: -0.12%
• U.K.'s FTSE 100: -0.26%

 

Corporate Earnings Highlights

 

Philips (NL)

• Performance: Shares plunged 13% after missing Q4 sales growth expectations, primarily due to a double-digit revenue decline in China.
• Forecast: Citi analysts flagged the company's underwhelming 2025 outlook as a concern.
• CEO Statement: Roy Jakobs expressed optimism about the eventual recovery of Chinese demand, citing long-term healthcare needs.

 

BAE Systems (UK)

• Shares: Slipped despite record-high order backlog and a 14% revenue increase in 2024.
• Profit: Operating profit rose 4% to £2.69 billion ($3.39 billion).
• Outlook: Analysts see strong growth prospects fueled by rising global defense budgets and increased European defense autonomy.

 

Glencore (CH)

• Stock: Fell over 6% after reporting a 16% YoY decline in adjusted earnings in preliminary annual results.

 

HSBC (UK)

• Results: Reported a pre-tax annual profit of $32.31 billion, slightly missing expectations due to a $3.1 billion decline in net interest income.
• Shares: Rose 0.7% after announcing a $2 billion share buyback despite a downgrade from Deutsche Bank.
• Analyst View: UBS noted HSBC’s 9% outperformance versus Q4 consensus but flagged investor focus on long-term growth potential.

 

U.K. Economic Data

 

Inflation Update

• January CPI: Rose to 3%, surpassing the 2.8% forecast (Reuters survey).
• Core Inflation: Increased to 3.7%, its highest since April 2024.

 

Expert Insight:

• James Smith (ING): Suggests the Bank of England remains calm, highlighting that wage trends and labor market performance are key uncertainties.
• Market Expectation: The Bank of England is likely to hold rates in March, with potential cuts later in the year.

 

Housing Market Trends

 

House Prices: Up 4.6% YoY to £268,000 ($337,669) in December 2024.

 

Rental Market: Average rents rose by 8.7% in January, with regional differences:

• England: £1,375
• Wales: £780
• Scotland: £995

 

Industry Perspective: Justin Moy (EHF Mortgages) attributes price persistence to demand-supply imbalances and shifting market dynamics favoring corporate landlords.

 

Global Market Context

 

Asia-Pacific Region

• Stocks traded mostly lower, diverging from Wall Street's bullish performance where the S&P 500 hit a record high on Tuesday, as U.S. investors appeared to discount tariff and inflation concerns.

 

U.S. Market Update

 

Stock Futures: Opened lower on Wednesday.

 

Key Indices:

• S&P 500: -0.22%, pulling back from a recent record high.
• Nasdaq Composite: Declined alongside the S&P 500.
• Dow Jones Industrial Average: Fell 173 points (-0.39%).