Monthly Macroeconomic Report

february 2025
MACROECONOMIC REPORT

The report provides a detailed analysis of significant macroeconomic trends and developments in developed and emerging markets. It covers inflation, GDP, retail sales, industrial production, unemployment, yield curves, stock indices, interest rates, commodities, sector and industry dynamics, IPO and M&A deals,
new unicorns, and cryptocurrency performance.

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SUMMARY

Monthly
Macroeconomic Report
Mar 21, 2025

Policy rate and CPI, %

At its meeting on February 6, the Bank of England lowered the bank rate to 4.50% to stimulate economic growth in the country. The US Federal Reserve and the European Central Bank did not hold meetings. It is expected that the federal funds rate will remain at 4.25 –4.50% next month, while key interest rates in Europe may be reduced by 25 basis points.

On February 19, the People's Bank of China kept the one-year loan prime rate at 3.10%, as the weakening yuan limits the scope for monetary policy easing. At the same time, consumer inflation in China turned negative for the first time in 13 months.

Industrial production in developed countries 2 years, YoY, %

The latest US economic data on the labor market, housing sector, and retail spending indicate a weakening economic momentum. According to the second estimate, US GDP grew by 2.30% year-over-year in Q4, while China's economy expanded by 5.40%. Despite the trade war with the US, the Chinese government raised its 2025 GDP forecast to 4.50% from 4.20%.

The US retail sales declined in February from 3.90% to 3.10% year-over-year, while industrial production increased by 0.70% monthly but slowed to 1.40% year-over-year.

The US unemployment rate rose to 4.10%, accompanied by an increase of 203,000 to 7.05M unemployed.

Yield curves for February 2025, 2024 and 2023, and January 2025

In February, the US Treasury yield curve declined as investors continued to show interest in the bond market amid stock market downturns. Flattening the yield curve raises concerns about an economic slowdown, which could force the Fed to ease policy sharply if tight conditions persist for too long.

By the end of February, the DXY index had fallen to 107.57 from 108.50, as Donald Trump's protectionist policies raised concerns about economic growth and potential retaliatory measures from other countries.

FACT

By the end of February, the S&P 500 index had fallen by 1.42%, the Dow Jones Industrial Average by 1.58%, and the NASDAQ Composite by 4.83%. On February 19, the S&P 500 set a new all-time high of 6,144.15 before retreating to levels observed at the beginning of January. A significant portion of the market's decline was driven by discussions surrounding potential tariffs introduced by the new administration.

Dynamics of key stock indices, YTD

Eight out of eleven US economic sectors showed positive performance. The leaders of growth were Consumer Staples (+5%), Real Estate (+4%), and Energy (+4%). Interestingly, the technology sector continues to attract investor attention from those betting on a decline.
The price of WTI crude oil futures declined by 3.67% in February, while Brent crude fell by 3.78%. An unexpected increase in US fuel inventories signaled weakening demand.
In February, natural gas prices surged by 25.62%. Cold weather conditions led to record-high natural gas consumption from storage facilities.
By the end of the month, there was a significant net inflow into gold ETFs amounting to $10.30B, while spot gold prices rose by 1.90%.

Dynamics of energy commodities prices, YTD

In February, the number of IPOs in the US totaled 23 (+27.8% MoM) with an aggregate value of about $4.34B (-2.3% MoM). Globally, there were 111 (-6.7% MoM) IPOs valued at $13.31B (+83.8% MoM).

Also, the number of M&A deals completed totaled 1,399 (-23.2% MoM) for $95.72B (+15.6% MoM), including 507 (-22.4% MoM) deals in the US for $55.80B (+67.0% MoM).

IPO dynamics in the USA, 2023 – 2025

M&A dynamics in the USA, 2023 – 2025

FACT

The list of unicorns was expanded by 13 non-public technology companies including Abridge, StackAdapt, Function Health, Apptronik, Game Science, and 80 Acres Farms and others.

Over the first two months of 2025, Bitcoin's price dropped by 10.16%, while Ethereum's fell by 33.54%. In February, the price of Bitcoin dropped by 17.55%, while Ethereum fell by 32.96%. The significant decline in the cryptocurrency industry is primarily related to increased volatility, exacerbated by concerns about a potential global trade war and Trump's promise to impose new tariffs on imports from Canada, Mexico, and China.

Dynamics of bitcoin and ether prices, YTD

Important notice: The figures presented in the reports for previous periods may be subject to subsequent backward-looking adjustments in later reports due to the delay in obtaining data on closed transactions and the possibility of their adjustments in the market intelligence systems used to extract deal data.