Money Talks Report 03/March/2025.

?? Market Report.

? Two events have shaken the international scene this weekend. The public argument between Zelensky and Trujmp, and Trump's announcement of the creation of a strategic reserve of cryptocurrencies in the US.

?? Bitcoin was trading up more than 20% from last week's lows on Monday, after U.S. President Donald Trump said his January executive order on digital assets would create a strategic reserve including Bitcoin, Ethereum, XRP, Solana, and Cardano. Other cryptocurrencies mentioned by Trump, such as Ethereum, XRP, Solana, and Cardano, also rallied sharply, with XRP up 31%, Solana up 15%, and Cardano up 69%. Rally could extend into the first White House Crypto Summit that Trump is hosting on Friday.

?? The meeting between Trump and Zelensky was considered by many analysts to be a political trap. Trump humiliated with his words a Zelensky who showed gestures of disapproval and interrupted the president in front of the press. Hours later, European leaders unanimously declared their unconditional support for Zelensky, creating a division between the Western powers. A summit was then organised in London with the main European leaders, which ended with the announcement of new military and financial aid for the war. The British Prime Minister said there would be ‘Boots on the ground and planes in the air’. Macron's words were also shocking: If no one stops Putin, ‘he will go through Moldova and maybe Romania’.

?? At the London summit, participants were divided on the issue of using Russian assets to fund Kiev, according to Tusk. One of the main proposals on the table would be to use Russian national assets blocked by institutions to turn off aid to Ukraine, but the Euroclear institution, which holds some of its assets, fears that doing so would lose international credibility.

??? The president of the European Commission announced plans to increase immediate defence spending by all member countries for the creation of a European army. The fiscal rules limiting public spending by member countries will be suspended, allowing for increased debt and defence spending.

?? On the other hand, it is important to know that Trump, after the meeting with Zelensky, ordered an investigation into how US funds have been spent in Ukraine.

???? Another key point has been the suggestion to remove the US guts from Europe and leave NATO. This suggestion would have had the public support of Elon Musk and several US senators in the last few hours.

?? U.S. Commerce Secretary Howard Lutnick stated that tariffs on Canada and Mexico will go into effect on Tuesday, but the specific tariff level will be determined by President Trump. This is the first indication from the Trump administration that the full 25% tariffs threatened may not be imposed on all goods from Mexico and non-energy imports from Canada. Lutnick said Canada and Mexico have "done a reasonable job" securing their borders, though the flow of the deadly drug fentanyl into the U.S. continues.

?? President Trump is on the verge of imposing new tariffs on Canada and Mexico, as well as doubling tariffs on China, in a dramatic expansion of his push to reshape the U.S. economy. The tariffs would apply to around $1.5 trillion in annual imports - a 25% tariff on all imports from Canada and Mexico (except Canadian energy), and a doubling of tariffs on China to 20%.

?? The European Central Bank (ECB) is nearing the final leg of its interest rate-cutting cycle, but internal divisions are set to complicate decision-making going forward. The widely anticipated 25 basis point decrease in the deposit rate to 2.5% this Thursday is likely to be the last such step the ECB's 26 policymakers can easily agree on. There is growing disagreement within the ECB Governing Council over how much further to push rates lower and how quickly, as borrowing costs approach levels where they may no longer restrain the sluggish Eurozone economy.

?? The ECB still sees inflation meeting its 2% target by 2025, but we have seen a considerable increase in inflation in recent months, as we have already mentioned in previous reports. The prospect of increased fiscal spending on defense in Europe, following Trump's comments about no longer guaranteeing Europe's security, adds another complicating factor for the ECB.

?? Meanwhile, the media have silenced the huge demonstration by thousands of people in Romania protesting against the cancellation of their democracy and supporting the candidate C?lin Georgescu, who had openly spoken out against the war in Ukraine. Romania is building the largest NATO base, so its role in this war unfortunately takes precedence over the votes of the citizens of Romania.

?? Market View:

??? US futures are opening relatively calmly, consolidating the recovery achieved during Friday's session. Mini S&P 500 futures remain close to 5,975 points, while Nasdaq 100 futures have returned to the 21,000 point zone.

?? The dollar index, which last Friday exceeded 107.50 points, is currently at 107.30, making it difficult for the EUR/USD pair to exceed the 1.04 level. Meanwhile, US bond yields continue to fall, with the 2-year bond falling below 4% last Friday. This could be a sign that the Fed's plan to cut interest rates is still on track, strengthening demand for US bonds.

?? In Europe, although the stock markets managed to recover some of last week's losses, today's session is showing weakness. DAX 40 futures are trading lower, at 22,655 points.

??? Crude oil remains at levels similar to last week's and seems to be facing some resistance to further rises. At the moment, a barrel of Brent is trading at just under $73.

?? Gold has shown a moderate upward recovery after last week's falls. This precious metal could benefit from the increase in global uncertainty and the suspension of the peace agreement related to the war in Ukraine. Gold is currently trading at $2,875.

?? Bitcoin experienced an increase of more than 20%, exceeding $95,000 after Trump's announcement about the creation of a cryptocurrency reserve. However, since then, it has fallen back below $92,000. From a technical point of view, this movement could be interpreted as a simple pullback before continuing with further falls.