In February, the US CPI for January came in higher than expected across the board. Despite the tariffs not yet being implemented, inflation has been rebounding for several consecutive months. Additionally, Powell reiterated during Congressional testimony that the Fed is in no rush to adjust monetary policy, causing the market to push back the timing of rate cuts.
However, the “Trump trade” and “America First” narratives have been shaken, leading to a persistent weakening of the US dollar. The inconsistent tariff policy has also stoked safe-haven demand, resulting in two consecutive months of net inflows into global gold ETFs. Gold prices have retreated after reaching new highs, oscillating around the $2,900 level. Gold producers have started reporting their annual results, with a mixed performance but generally showing small monthly gains.
The emergence of Deepseek has ignited the domestic AI concept, leading to a slight cooling of the investment boom in US tech stocks. Remarkably, the US market has underperformed other regional markets.
On the domestic front, as enterprises have gradually resumed operations after the Lunar New Year, manufacturing PMI rose to 50.2 in February, beating expectations. The overall PMI has shown a recovery trend, reflecting a gradual
resumption of post-holiday economic activity.
Moving into March, the Trump administration has continued to exhibit inconsistency in its tariff policies. US economic data has slowed, and labor market resilience has weakened, leading to consecutive declines in the US dollar and equities. The market is currently digesting the previously optimistic expectations, but this may not necessarily constitute a reversal. Gold has maintained a volatile trading range, seeking an upward breakout, but $3,000 remains a significant resistance level. Prior to this, gold stocks may underperform.
The Government Work Report from the Two Sessions has set the economic growth target at around 5%, with the fiscal deficit ratio around 4%, indicating a further strengthening of countercyclical adjustments. However, the Hong Kong stock market may face some short-term correction risks due to overbought conditions.