(We've rebranded Morning Bid Asia as Trading Day to offer you

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help you make sense of the key trends moving markets just as the

U.S trading day is ending and Asia's morning is getting

started.)

By Jamie McGeever

ORLANDO, Florida, March 7 (Reuters) -

TRADING DAY

Making sense of the forces driving global markets

Happy Friday! Well, what a week that was. From Germany's

historic fiscal U-turn to the head-spinning uncertainty

surrounding U.S. tariffs, from U.S. recession warnings to the

snowballing selloff on Wall Street, investors had barely a

minute to catch their breath.

And these are only some of the news and events, twists and

turns that made up a tumultuous week on world markets. The

rollercoaster could be just as bumpy next week.

There is definitely a sense that momentum is building in

many asset classes, perhaps nowhere more so than U.S. equities,

where the gloom appears to be deepening, despite the reprieve on

Friday.

President Donald Trump's 'on-off' tariff policy - which is

literally changing on a daily basis - is corroding investor,

consumer and business sentiment, and dramatically reducing

visibility for company executives and fund managers.

And the Federal Reserve, as Chair Jerome Powell nodded to on

Friday.

Trade war fears are a major reason why the recession alarm

bells are ringing - real-time models are flagging deep U.S. GDP

contraction in Q1, in large part because of record trade

deficits which, in turn, are in large part down to a surge in

imports before tariffs kick in.

It's a different, and brighter, story across the Atlantic.

Berlin's plans to loosen the purse strings with a fiscal support

package worth up to 20% of GDP have lit a fire under German

stocks and the euro, sent bond yields spiraling higher, and

lifted euro zone growth forecasts.

The divergence between Wall Street and Europe widened this

week, but cooled on Friday. Will it pick up again next week?

It's not just Germany and European governments pulling the

fiscal levers to rev up growth. China this week outlined plans

to steer its economy toward 5% growth this year to be fueled in

large part by increased spending that will widen the budget

deficit to a historic 4% of GDP.

Attention in Japan, however is leaning heavily towards the

Bank of Japan ahead of its March 18-19 policy meeting. No change

is expected, but with wages and food prices on the rise, more

tightening this year is expected. The only question, it seems,

is when.

This Week's Key Market Moves

* The euro soars 4.5% against the dollar for its best week

in 16

years, as Germany eyes its biggest spending spree - on defense

and infrastructure - since reunification.

* Germany's 10-year Bund yield posts its biggest weekly rise

since

reunification, leaping 45 basis points.

* The U.S.-German 10-year yield spread collapses 35 basis

points,

the biggest weekly narrowing since the GFC in December 2008.

* The Nasdaq 100 closes below its 200-day moving average for

the

first time in two years. The Nasdaq composite enters correction

territory, down 10% from its December peak.

* Japan's 10-year yield rises 15 bps for its biggest weekly

rise

since 2008, swept up in the Berlin-triggered wave of bond

selling and rising expectations of more Bank of Japan

tightening.

Chart of the Week

Germany's benchmark 10-year yield rocketed on news that

Europe's largest economy could be poised to unleash its biggest

public spending program since reunification in 1990. It rose 35

basis points on the week, its biggest rise since 1990 also.

What could move markets on Monday?

* China producer and consumer price inflation (February)

* Eurogroup meeting, ECB President Christine Lagarde

participates

too

* Japan current account (January)

* Germany trade, industrial production (January)

Here are some of the best things I read, watched and

listened to this week:

1. Recession risks rise for all three North American

economies over US tariff chaos

2. DOGE job cuts bring pain to Trump heartland

3. Zelenskiy-Trump clash at White House sparks

global

rethink by US allies

4. ECB may fear stumbling into stimulus

5. Spending U-turn puts Germany back in Europe's

driving

seat

I'd love to hear from you, so please reach out to me with

comments at . You can also follow me at @ReutersJamie and

@reutersjamie.bsky.social.

Opinions expressed are those of the author. They do not reflect

the views of Reuters News, which, under the Trust Principles, is

committed to integrity, independence, and freedom from bias.

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(Writing by Jamie McGeever, editing by Deepa Babington)