Monthly Macro Review - March 2025

Macro at a glance

On March 18, the Bundestag voted for a budget reform that put an end to Germany's strict 0.35% GDP debt policy. With over two thirds of parliament in favor, Europe's largest economy has decided to increase its budget by 1000 billion euros for national infrastructure, which could stimulate a country that has been in economic contraction for 2 years. In addition, it also exceeds its defense budget from the usual restrictions.

This reform heralds a turning point in German economic ideology, which could benefit Friedrich Merz, tipped to be the next chancellor. European defense companies and German industry seem to remain the big winners from this reform. On the other hand, the effects on neighboring countries remain uncertain. The rise in interest rates in the Eurozone is the result of German debt issuance, which hampers the financing of other countries. (Zone Bourse)

March saw a sharp sell-off in US equities, with the S&P 500 falling by more than 5,75% amid renewed fears of stagflation. President Trump has intensified trade tensions, leading for the time being to retaliatory measures from the other countries concerned. At the same time, inflation has surprised on the upside - core PCE for February rose by 0.5%, casting doubt on price stability. Fears of stagflation have made the markets sweat, especially since  the Fed kept rates at 4.25-4.5%, signalling that no rate cut was imminent. The CNN Fear & Greed Index spent most of the month in extreme fear territory. (FT, Les Echos, CNN)

March 19th, the Bank of Japan kept its policy rate unchanged, as widely expected, despite persistent inflationary pressures. The decision reflects the central bank’s cautious approach amid uncertainties, particularly concerns over the potential impact of U.S. tariff policies. Looking ahead, most BOJ watchers anticipate the bank will raise its policy rate again in June or July, maintaining a measured tightening cycle of one hike approximately every six months until reaching its terminal rate. This gradual pace signals the BOJ’s focus on ensuring economic stability while navigating external risks. (Bloomberg)

One Sector, One Insight

Basic Materials and Energy :

In March, TotalEnergies (TTE) officially announced the resumption of its $20 billion LNG project in Mozambique, marking a major milestone in the African energy landscape. The project, which had been on hold since 2021 due to security concerns, is now back on track, bringing hope for the future. The announcement led to a 3.2% rise in TotalEnergies' share price. The Mozambique LNG Project began with the discovery of approximately 65 trillion cubic feet of recoverable natural gas off the north coast of Mozambique in 2010. Mozambique LNG, in which TotalEnergies holds a 26.5% operating interest, also benefits from decisive financial backing. The Board of Directors of the U.S. Export-Import Bank has re-approved a loan of almost $5 billion, a key leverage to overcome one of the main obstacles to the relaunch of this project, long delayed by safety issues. (Reuters)

Consumption and General Public Services:

On March 6, Walgreens Boots Alliance (WBA) — one of the world’s largest retail pharmacy chains, operating over 12,000 stores across the U.S. and Europe — accepted a $13B buyout offer from Sycamore Partners, following years of declining revenues, shrinking pharmacy margins, and rising competition from online players. The agreement includes a 35-day “go-shop” period allowing WBA to seek alternative offers. Sycamore plans a major overhaul focused on U.S. operations, cost reductions, and a strategic spin-off of Boots UK to streamline the group’s structure and restore profitability. (Bloomberg, Reuters)

Financial Services :

On March 20, the Swiss Federal Council announced plans to tighten capital rules for systemically important banks, directly targeting UBS (UBSG) after its acquisition of Credit Suisse. The government is considering a significant increase in equity requirements to reduce systemic risk — a move UBS argues would undermine its global competitiveness. In response, UBS CEO Sergio Ermotti warned that the bank could relocate parts of its operations abroad if Switzerland becomes too restrictive. On March 26, UBS took a more conciliatory tone, stating it may downsize its investment banking division to avoid stricter capital charges. (RTS, AGEFI)

Healthcare : 

On March 11, Danish biotech Zealand Pharma (ZEAL) signed a strategic partnership with Roche (ROG) to co-develop Petrelintide, a next-generation obesity treatment. The deal, worth up to $5.3 billion, marks a major milestone for Zealand and signals Roche’s ambition to expand in the high-growth weight-loss market. Following the announcement, shares of Roche rose 3.6% and Zealand Pharma surged 38%. (Reuters, Yahoo Finance)

Industrials:

The electric vehicle sector has been very volatile over the past month. Particularly since Built Your Dream, better known as BYD (1211), overtook Tesla (TSLA) as the current leader in the electric car industry. BYD's revenues soared 29% to $107 billion last year. This compares with Tesla's revenue of just $98 billion. This difference can be explained by the fact that BYD has opted for a mixed strategy (hybrid/electric), while its competitor focuses solely on electric vehicles. Since the start of the year, BYD's share price has increased 41% and Tesla's decreased 31%. The question is no longer whether BYD can catch up with Tesla, but whether Tesla can survive against BYD over the long term. In any case, investors seem to have changed their minds. (FT, Yahoo Finance)

Technology and Network Equipments :

After abandoning plans for an acquisition last year due to anticipated regulatory pushback, Alphabet (GOOG), Google’s parent company, and Wiz have reached an agreement for Alphabet to purchase the cybersecurity startup for $32 billion. Wiz, Inc. is a cloud security firm based in both Israel and the United States. Wiz collaborates with cloud service providers like AWS, Microsoft Azure. Shares of Alphabet dipped nearly 3% after the announcement. The stock was down 13% this year before Tuesday. Google had $23.47 billion in cash and cash equivalents as of Dec. 31, implying it might have to seek financing for the deal. (Reuters, Yahoo Finance)

The stock of the month

Novo Nordisk had its worst month since 2002, with shares down over 22% in March. Slowing U.S. prescription growth for its blockbuster weight-loss drug Wegovy, rising competition, and regulatory pressure triggered a sharp market reversal. The Danish company also lost its status as Europe’s largest listed company, overtaken by SAP. (FT)

Key performances

Name	As of March 31	Monthly change	YTD
S&P500	5611.85	-5.75%	-4.59%
Dow Jones	42001.76	-4.20%	-1.28%
NASDAQ	17299.29	-8.29%	-10.49%
FTSE100	8582.81	-2.58%	5.01%
CAC40	7790.71	-3.96%	5.55%
DAX	22163.49	-1.72%	11.32%
SMI20	12598.12	-3.12%	8.38%
MSCI WORLD	3628.87	-4.60%	-1.97%
VIX	22.28	13.50%	28.41%
CHF/USD	1.1305	1.76%	2.14%
CHF/EUR	1.0449	-2.23%	-1.77%
Brent $/bbl	74.63	1.98%	-1.71%
Gold Spot $/oz	3155.50	9.44%	21.08%

Upcoming events

April 10: US CPI

April 17: BCE

April 22: Tesla Q1 earnings (to see if sales and earnings continue to fall)

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Written by Hippolyte Metzger-Otthoffer, Amaury Chartier and Jonas Bourgois