Monthly highlights of major events which drive financial markets, along with perspectives on what they mean and why they matter.
March in review
Markets were volatile in March as both Canadian and U.S. equities and bond markets mostly declined amid rising trade tensions and geopolitical uncertainty. Newly imposed tariffs and retaliatory measures between major economies raised fears of slower economic growth and persistent inflation. Canadian stocks fell by 1.51%, led by Information Technology (-12.70%), Industrials (-4.61%), and Health Care (-4.45%) sectors, while U.S. stocks fell 5.63% in U.S. dollar terms, led by Consumer Discretionary (-8.91%), Information Technology (-8.83%), Communication Services (-8.28%) sector. Bond markets were mixed, with the Canadian bonds falling 0.28% as investors reacted to rising trade tensions and inflation risks, while U.S. bonds held steady. Commodity prices rose with gold, oil, and natural gas up 9.53%, 3.09%, and 5.72%, respectively. Emerging markets were up 0.64%, supported by a rally in Chinese equities driven by AI optimism.
Here are some of March's most notable events:
Canada-U.S. trade tensions escalate as tariffs take effect. A 25% tariff on Canadian goods—including aluminum and steel—took effect, escalating trade tensions between Canada and the U.S. The U.S. implemented the measure citing national security concerns, prompting immediate retaliation with Canada announcing tariffs on U.S. agricultural products in response to new Canadian import restrictions. The back-and-forth drew criticism from manufacturers and trade groups warning of rising input costs and supply chain disruption. Talks between then Prime Minister Trudeau and the Trump administration were conducted to help de-escalate the situation, but the tariffs ultimately marked a notable shift toward renewed protectionism in U.S. trade policy.
U.S. inflation data sends mixed signals. Data showed the U.S. annual inflation rate fell to 2.8% in February, down from 3.0% in January, driven by lower energy costs and easing goods prices. However, data released late March showed the Personal Consumption Expenditures (PCE) Price Index rose 2.5% year-over-year, with core PCE—excluding food and energy—rising more than expected. While headline inflation continued to moderate, the persistence of core inflation highlights ongoing pressures in areas like housing and healthcare. These mixed signals suggest that, while progress is being made, the path to price stability remains uneven.
| Index† | Change (%) | Index Level | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Treasury Bill (FTSE Canada 60 Day T-Bill) | 0.26 | 0.79 | 4.34 | 187.19 |
| Canadian Bonds (FTSE Canada Universe Bond) | -0.28 | 2.02 | 7.65 | 1,192.50 |
| Canadian Equities (S&P/TSX Composite) | -1.51 | 1.52 | 15.84 | 24,917.50 |
| U.S. Bonds (Barclays U.S. Aggregated Bond, US$) | 0.04 | 2.78 | 4.88 | 2,249.91 |
| U.S. Equities (S&P 500, US$) | -5.63 | -4.28 | 8.23 | 5,611.85 |
| Global Equities (MSCI World, US$) | -4.40 | -1.68 | 7.52 | 3,628.64 |
| Emerging Marketings (MSCI Emerging Markets, US$) | 0.64 | 2.97 | 8.54 | 1,101.40 |
| Currencies† | Change (%) | Exchange Rate | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| C$/US ($) | 0.51 | -0.03 | -5.90 | 0.6950 |
| C$/Euro (€) | -3.57 | -4.30 | -6.09 | 0.6426 |
| C$/Pound (£) | -2.11 | -3.17 | -8.02 | 0.5380 |
| C$/Yen (¥) | 0.09 | -4.67 | -6.74 | 104.233 |
| Commodities (US$)† | Change (%) | Price | ||
|---|---|---|---|---|
| 1 Mth | YTD | 1 Yr | ||
| Gold Spot ($/oz) | 9.53 | 17.02 | 33.96 | 3,150.30 |
| Oil WTI ($/barrel) | 3.09 | 1.39 | -4.79 | 71.48 |
| Natural Gas ($/MMBtu) | 5.72 | 30.47 | 34.17 | 4.12 |
†Total Return, as at March 31, 2025. Indices are quoted in their local currency.
Source: Bloomberg
Indices are not managed, and it is not possible to invest directly in an index.
Germany announces major stimulus package. Germany unveiled a €500 billion special fund aimed at boosting infrastructure, defense, and green energy spending. The announcement triggered a sharp rally in German equities, with the DAX index jumping 3.5%, and bond yields moving higher amid concerns over increased public borrowing. The move marks the largest fiscal expansion in Germany’s modern history outside of pandemic-related measures, and one of the most significant in Europe in over a decade. As Europe’s largest economy, Germany’s renewed investment push also lifted broader global sentiment—an encouraging signal for markets.
Did you know?
Global oil production reached nearly 90 million barrels per day in 2024, with over 30% coming from just three countries: the United States, Saudi Arabia, and Russia. Despite the growing push toward renewable energy, fossil fuels still account for around 80% of the world’s energy consumption. Interestingly, even small shifts in production quotas—just 1–2 million barrels per day—can significantly impact global prices and inflation expectations. As a result, energy policy decisions often carry implications that extend well beyond the oil patch.
