Daily Brief Macro: Investors Run and Hide and more

• Investors are scrambling for safety as tariffs reshape the global financial order.
• Capital is flowing into short-term Treasuries at an increasing pace.
• Gold has been a steady haven, but will bitcoin also emerge as a safe haven.

• Market volatility continues, with futures down across the board
• Atlanta Fed’s GDP nowcast turns negative for the first time since 2022
• Winners in the market so far this year include gold, European stocks, and bonds

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• Hello, and welcome back to our weekly editorial on commodities and geopolitics.
• Trump is keeping us busy yet again, threatening to impose another 25 percentage points (which was pulled back a couple of hours later, as usual) on top of the steel and aluminum tariffs, targeting the Canadian car industry at the same time.
• By now, it’s very clear that his main agenda is to move jobs and factories to the U.S. by limiting imports—but the question remains: will he actually follow through?

•  EC publishes 11 commodities’ scenarios including rubber  
• Non-SME operators, dealers tasked with due diligence onus  
• German Rubber Association criticism fails to make impact  

• Total Imports to the US from Canada were around $420bn in 2024, so as a rough approximation the 25% tariff will generate around $90bn of revenue for the External Revenue Service, which importantly goes straight to the Treasury. (Energy is only tariffed at 10%).

• Within that $420bn, raw materials such as Oil and Gas, Iron and Steel, Wood and Aluminium account for around 40% of the total.

• This is the basis of the ‘you need us more than we need you’ argument all over social media as well as the ‘tariffs will cause inflation and destroy the economy’ arguments being advanced as much for political as economic reasons. 

• Subsidy / In Depth: Why individuals may need to shoulder more of China’s social insurance burden 
• Law /Analysis: Why so few people are found not guilty in China
• IPOs /: China may restart allowing unprofitable tech firms to list, sources say

• The recent decline in US equities only smells like a recession, might not taste like one yet
• Broader and timelier measures of the economy do not seem to be as soggy as the early indications from headline GDP at this time
• My weekly Recession Odds indicator, which takes into account a range of indicators with diversified coverage, offers another angle on the ongoing recession debate

• CPI inflation receded to 3.6%YoY in Feb’25, as big MoM declines in vegetable prices brought F&B inflation down to 3.8%YoY. Tame food inflation will allow 3.2%YoY headline inflation in Apr-Dec’25. 
• Energy deflation will end in Mar’25, and non-food inflation will edge up marginally, but food inflation likely to be lower than 3.5%YoY for the next half-year amid tame vegetable inflation.
• Policy rate to decline 25bp at each of the next 3 MPC meetings, and another 25bp by Dec’25. Normalized interest rates will enable RGDP’s return to 8% growth in FY26. 

• After analyzing their annual results, presentations, and conference call transcripts, we summarize the supply mine-by-mine and market commentary gathered from twelve major listed copper producers (40% of global production).
• Copper supply growth is expected to be 3% YoY 2025e, resulting in a deficit of 250,000 tons (>1 million tons in 2029), while inventories currently cover a week’s global demand. 
• With the cost curve at the last decile around $4.5$/lb, the copper price is supported greatly despite the system’s high inventories. 

• Industrial activity fell -0.4% MoM in January, accumulating four months of contraction.

• Even though companies in the US anticipated tariffs by importing a record of intermediate goods, this was not reflected in domestic manufacturing.

• Industrial activity came in below our expectation and the market consensus, both at 0.1% MoM