Weekly Macroeconomic Analysis: Global Trends & Insights

During the week of 19 March 2025, global markets showed a mix of chances and risks. Looking at the global economic trends, the domestic markets stayed flat, while international markets were slightly down. Once again, tariff tensions between Europe and the US have risen, and no talks are happening. Inflation worries and other tensions also increased. In this blog, let’s do the weekly macroeconomic analysis.

Indian Market Update

The Indian stock market ended on a flat note during the week. Benchmark indices Nifty 50 and Sensex ended slightly lower, each down by around 0.7%. The BSE Small Cap index made a modest gain of 0.9%, while the BSE Mid Cap index declined by 0.3%. Among all the sectors, only the realty sector surged again to new highs, recording a 2.5% gain.

Source: Sensex Tradingview

Foreign institutional investors were net sellers again this week, offloading equities worth around Rs.11,592 crore. It continues to reflect a shift away from equity markets amid global uncertainties. On the other hand, domestic institutional investors stepped in with marginal buying worth Rs.11,198 crore.

Additionally, during the week, BSE announced that the Sensex will undergo a reshuffle effective from 23rd June 2025. Trent Ltd. will replace Nestle India, and Bharat Electronics Ltd. (BEL) will take the place of IndusInd Bank. It reflects changing market dynamics and the strong performance of these companies. Following the announcement, shares of Trent and BEL surged by up to 3%.

India’s infrastructure output experienced a significant slowdown in April 2025, growing by only 0.5% compared to 4.6% in March 2025. The slowdown was primarily attributed to reduced output in key industries including cement, steel, and refineries. The declining momentum raises concerns about industrial demand and broader economic resilience as the country enters the new fiscal year.

US Market Update

During the week, tensions between the US and the European Union started again. Earlier, there was a chance for the countries to negotiate, which caused US markets to rise in the past two weeks. However, the talks did not reach any agreement. Now, the US has announced it will impose a 50% tariff on European Union goods starting 1 June 2025.

Source: Nasdaq composite Tradingview

The US Composite PMI Output Index, which measures the manufacturing and services sectors, was released. For May 2025, the number was 52.1, up from 50.6 in April 2025. A number above 50 usually means growth in the private sector. This increase happened mainly because of stronger growth in domestic orders, especially in manufacturing, which had its fastest rise in 15 months. The services sector also reached its highest level since March 2025.

The yield on 30-year US government bonds went above 5%, the highest since 2023. The rise was due to the declining investor confidence about the growing government debt as per the economic policy analysis. A major factor is the US credit rating downgrade by  Moody’s from AAA to Aa1 last week, shaking investor confidence. The ongoing tariff issues also contributed to this.

Source: Trading Economics

Europe Market Update

In May, business activity in the Eurozone slowed down. The HCOB Flash Eurozone Composite PMI, an important indicator, dropped to 49.5 from 50.4 in April 2025. This was the first decline in five months. Based on the macroeconomic indicators, the main reason was a slowdown in the services sector, which fell at the fastest rate in 16 months. New orders also decreased.

The German economy grew by 0.4% in the first quarter, which was twice as much as earlier estimates. This was a good recovery after a 0.2% decline at the end of last year. The growth was mainly due to stronger household spending, increased investments, and higher exports. It made it the fastest economic growth in Germany since 2022.

In April, prices in the UK rose faster than expected. Inflation went up to 3.5% from 2.6% in March, mostly because of higher housing and utility costs. Retail sales were strong, growing 1.2% from March and 5.0% higher than last year. However, in May, overall business activity in the UK fell for the second month in a row. A small rise in services was not enough to offset a big drop in manufacturing.

Source: BBC

Commodity Market Update

Crude oil imports increased to 6.1 million barrels per day, but over the past four weeks, they are still 13.5% lower than the same time last year. Crude oil stockpiles grew by 1.3 million barrels to reach 443.2 million barrels. Even with this rise, stock levels are about 6% below the usual average for this time of year. At the same time, overall demand for oil and related products has dropped compared to last year, showing that market consumption is weaker right now.

Natural gas storage increased by 120 billion cubic feet, bringing the total to 2,375 billion cubic feet. This is slightly above the normal level for this time of year, but still 333 billion cubic feet lower than last year. Most of the increase came from the South Central region, with smaller gains in the East and Midwest. It was the fourth week in a row of strong storage growth, showing that producers are steadily building up supplies as both demand and production rise.

Source: US EIA

Major Events for Next Week

Following is the list of major events that will be taking place in the week of 26 May 2025.

 

Date	Country	Event
27-May-25	US	Durable Goods Orders
28-May-25	India	IIP
28-May-25	US	FOMC Meeting Minutes
29-May-25	US	Annualized GDP Growth Rate
29-May-25	US	Weekly Initial Jobless Claims
30-May-25	Japan	Unemployment Rate

 

Bottomline

Based on the macroeconomic indicators, the outlook for next week remains uncertain due to the ongoing trade tensions between the US and the European Union. On the domestic front, the conflict between India and Pakistan has calmed down for now. Also on a positive note, India has officially surpassed Japan to become the world’s fourth-largest economy, according to the International Monetary Fund’s (IMF) latest report. 

However, a few new COVID-19 cases have been reported in India, which could be a minor concern. Investors should stay cautious in this uncertain environment and make informed decisions by doing proper research using the many online tools now easily available.