Markets:
- Gold down $23 to $2852
- US 10-year yields down 7.7 bps to 4.21%
- WTI crude oil down 36-cents to $70.00
- S&P 500 up 1.2%
- USD leads, NZD lags
Every single day is an journey to this point in 2025.
This one had all of it. We began out with some financial knowledge that highlighted a benign inflation setting because the PCE report was very near estimates. All eyes have been there however on the similar time the January commerce steadiness numbers have been launched and noticed an enormous inflow of imports.
That basically should not have been a shock given tariff threats and the potential to front-run them nevertheless it wasn’t within the economist estimates and it took till the Atlanta Fed GDPNow quantity highlighted the influence on Q1 GDP for the market to essentially care. That led to an extra bid in bonds and now we have seen the yield curve invert once more and year-end pricing is for 68 bps in easing in comparison with 40 bps a pair weeks in the past.
Regardless of that, the US greenback was a giant winner on the day. A lot of that comes right down to geopolitics as Trump and Zelensky had a significant falling out within the Oval Workplace, in public. That led to promoting within the euro and a few widespread confusion together with USD bids. Initially, it led to promoting in shares as properly however was adopted by an unbelievable turmaround into the shut, together with a 50 level rise within the S&P 500 within the closing minutes of buying and selling.
I am inclined to suppose there was some month-end rebalancing there or brief masking nevertheless it may have been pushed by charge reduce hopes/expectations. On that entrance, subsequent week is a giant one with non-farm payrolls arising. Internationally, we get China’s Nationwide Individuals’s Congress as properly, which can also be positive to be a giant market mover.
Lastly, the loonie received a lift initially from sturdy GDP numbers nevertheless it bought off later in a catch-down to the antipodeans. There are some actual considerations about tariffs with Tuesday’s deadline a giant danger. USD/CAD was final at 1.4469, ending close to the best since Feb 3.
Have an excellent weekend, I am positive March will probably be simply as risky as February.
