The USD strengthened, oil prices stabilized, equity markets were mixed, and US yields increased due to earnings and tariff news. The USD rebounded from 11-week lows amid soft economic data and tariff concerns as the House advanced Trump’s tax cut plans. Asian equity markets declined, while European equities reached a record intraday high, led by the resource sector after the US signalled tariffs on copper. Investors received a boost from strong European earnings and are now waiting to see if earnings results from Nvidia Corp, to be released after the US close, can help renew the AI-driven rally. “Nvidia’s numbers could well be a make-or-break event for the market, at least in the short term,” said Waterer at KCM Trade in Sydney. Elsewhere, oil prices steadied after weakening due to a souring economic outlook that keeps pressure on energy demand. Bitcoin firms towards $89k, while gold and silver prices strengthened. Today features a light economic calendar, so the focus will be on the US new home sales, President Trump’s speech, and speeches from BoE Dhingra, and Feds Bostic & Barkin in the afternoon.
News Headlines. Oil major BP boosts annual fossil fuel spending to $10 billing in strategy reset. Ukraine agrees minerals deal with the US. The EU to keep climate goals but loosen rules for companies, says green chief. Belgian prosecutor probes alleged Chinese hacking of intelligence service. Trump floats $5 million 'gold card' as a route to US citizenship. Absences and disputes mar G20 finance chiefs talks. North Korea's Kim calls for building modern army to brace for war. Chile power outage plunges capital into darkness, hits major copper mines. Trump says Canada and Mexico tariffs are 'going forward' with more import taxes to come.
In currency markets. Global currencies ease as the US bounces off near three month lows as renewed tariff concerns helped the greenback. CNY slipped by 0.1%, while Asian currencies eased by 0.2% on average against the USD. Trading currencies are under pressure, with AUD & NZD weakening by 0.5%, JPY & CHF falling 0.3%, SEK & NOK are down by 0.2%, and ZAR & MXN flat against the USD.
In commodity markets. Oil prices are flat. Natural Gas prices weakened by 0.5%. Gold prices firmed by 0.3%. Silver prices strengthened by 0.8%. Copper prices rallied by 3.6%. Wheat prices gained by 0.15%, while Soybean prices eased by 0.25%.
CAD weakened to a fresh two-week low due to domestic political uncertainty and growing concerns that a US trade tariff will be implemented in March. On Monday, Trump was asked whether he is proceeding with tariffs on Canada and Mexico, which are currently paused until March 4th. He replied, “The tariffs are going forward on time, on schedule,” and then made vague complaints about unspecified abuses against the United States. We expect the loonie to remain under pressure, targeting 1.4380 next, with potential weakness extending to 1.4475.
EURCAD steadies in early trading, weakening from 1.4750 Feb 10th to breaching 1.5000 on the increasing threat of US tariffs in March.
EUR falls below 1.5000 as the USD strengthens. Despite positive market sentiment in equities ahead of the Nvidia earnings report, the euro remains under pressure due to the prospect of US trade tariffs boosting the USD. Today's focus will be on President Trump’s speech at 2 pm EST, with investors expected to pay close attention to his comments on US tariff policies.
GBPEUR eased in early trading but remained up 1.4% in February and 3% yearly as the UK remained off US tariff threats.
GBP faces pressure as the USD strengthens, while the pound falls after the UK’s military spending pledge. The pound’s recovery stalled as the USD gained strength due to rising expectations of Trump tariff actions and comments from PM Starmer about increased military spending. PM Starmer declared onTuesday that he would raise annual defence spending to 2.5% of GDP by 2027, aiming for a target of 3%, signalling to the US that the UK can bolster Europe's security. Today’s focus will be on US President Trump and BoE Dhingra speeches to help provide direction for the pound.
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