Is any one else suffering from hayfever?

It’s been a bad start to March for stocks, as Trump’s tariff threats have put the skids under stocks and the “safe haven dollar.” The Wall Street cheer that greeted Trump’s return has become something closer to fear. Last night, Trump confirmed to a joint session of Congress a 25% levy on goods from Mexico and Canada and an additional 10% tariff on Chinese imports. Canada retaliated by saying it plans to impose 25% tariffs on some U.S. imports, while Mexico will unveil its retaliatory moves on Sunday. The dollar’s safe haven status in times of uncertainty is almost a given, so it was surprising to see it take a tumble yesterday.

On a more positive note, Zelensky indicated he is “ready to come to the negotiating table as soon as possible to bring lasting peace.” He also said Ukraine was ready to sign a mineral-rights agreement. Earlier this week, Trump announced that the US would suspend Ukraine’s military aid, boosting European defence stocks. After last week’s Oval Office press conference, we will see how Trump reacts to what appears to be something of an olive branch from Ukraine’s leader.

As we revert to the mundane, the Institute for Supply Management monthly Index declined to 50.3 in February, lagging the consensus-expected 50.7. The major activity measures were lower in February and close to contraction territory. The recent dollar weakness may also reflect the change in interest rate sentiment in the past weeks. US economic data indicates a slowdown in economic activity, and the uncertainty around tariffs is beginning to weigh on consumers and employers.

Speaking on Bloomberg, the uber bear that is Mohamed A. El-Erianis apparently rattled by the rapidly increasing odds of a downturn: “While still relatively low, my probability of a recession has increased from 10% at the beginning of the year to 25% to 30% today,” he writes. “This is a consequential and quite unsettling development for an economy with high potential and aspirations.” I am usually heartened when I hear Mr El-Erian has been wheeled out to express his views of oncoming disaster; it often provides just the support the market needs. It apparently has just done that again, as global stocks are starting on a strong note today.

It’s interesting that when the Deepseek news broke and the technology sector wobbled, one took phone calls from those looking to add and take advantage of the sell-off. Those phone calls were not so forthcoming over the past few days.

It’s a busy few days of economic data. Eurozone inflation came in as expected, and despite the annual rate remaining above the ECB 2% target, it is fair to say that this will not deter the ECB from cutting rates tomorrow.

Earlier in the week, the S&P UK Manufacturing took the expected tumble, pointing to a contraction in the manufacturing sector. Later today, we get the services and composite index reading, which is expected to border on 50. We also get the composite index for the US. There was some more good news from China this morning as output and new orders are growing the most in three months as the Chinese authorities double down on their 5% growth target for the year ahead.