Markets:
- Gold up $3 to $2796
- US 10-year yields up 7 bps to 4.58%
- WTI crude oil down 27-cents to $72.46
- S&P 500 down 30 factors to 6039
- USD leads, JPY lags
January involves an finish and it was definitely a dramatic one, which isn’t any shock given the brand new President.
The PCE report was an excellent one for inflation, although solely whenever you’re rounding to the second decimal or digging deep within the numbers. It was a reminder that the Fed will not be threatening price hikes any time quickly, even when the tempo of cuts may gradual or cease. The greenback took the report in stride and within the early going it was principally month-end flows bouncing across the market.
That led to some uneven strikes that had been robust to clarify however the market definitely acquired one thing more-tangible to chew on later.
It began with a Reuters report saying Trump may announce tariffs however they would not go into place till March 1, permitting time for exemptions and negotiations. The market preferred the sound of that and the US greenback fell with USD/CAD dropping 100 pips to 1.4375. It wasn’t restricted to CAD and MXN both as EUR/USD rose 60 pips in a constant transfer throughout FX.
After all, the White Home denied that report about 90 minutes later and reiterated that the White Home could be placing tariffs on Mexico and Canada on Saturday, as deliberate. That reversed the transfer and in some circumstances extra. USD/CAD ran to 1.4225 whereas different strikes had been additionally erased. The web was that the majority issues ended up again the place they began the US afternoon.
Nevertheless shares soured notably onerous. The S&P 500 had been up almost 50 factors on the highs and was down 40 factors ultimately look, or 0.6%. Apple was notably onerous hit in an unsightly reversal after a robust open.
The weekend will probably be an fascinating one and nearly ensures some fireworks when markets reopen. Within the meantime, benefit from the weekend!
See: February 1. March 1. It does not matter as a result of it is all a bluff
