From Marc to Market:
The war and rhetoric around it keep investors on edge, even though WTI and Brent are consolidating now after reaching marginal new four-day highs. The greenback is firm against the G10 currencies. Disappointing UK January GDP has weighed on sterling, whose 0.65% loss leads the majors. The proximity of the JPY160 level may be encouraging a more cautious tone, leaving the yen as the best performer, only off around 0.1%.
The unknown risks over the weekend may help keep greenback supported in North America today. The Dollar Index is up 1.2% this week as the North American session gets underway. Last week, it rose 1.4%. The Dollar Index is at highest level since last November. The average price of retail gasoline in the US is more than 4% this week after a 16% rally last week. Mortgage rates are at 11-month highs........Data• The US economic calendar is jammed today, but the war likely dampens the market’s reaction. Another look at Q4 GDP, which rose by disappointing 1.4% at an annualized rate, may be among the least relevant as Q1 26 winds down. The most important element of the January personal income and consumption data is that adjusted for inflation, spending be flat after rising 0.1% in December. The price deflators will remain firm, with the headline seen stable at 2.9%, while the core may tick up to 3.1% from 3.0%. Boeing and defense orders likely flattered the January durable goods orders, without which a 0.5% gain is expected by the median forecast in Bloomberg’s survey. The January JOLTS report is expected to show job opening increased for the first time in four months, while the level of quits fell for the first time in three months. This will support ideas suggested by some Fed officials that the labor market showed some signs of stabilizing recently. Lastly, it will surprise no one if the inflation expectations in the preliminary March University of Michigan survey rise. At the risk of over-simplifying, consider that the average retail price of gasoline has risen every day since the war began for a cumulative rise of more than 20%....
....MUCH MORE
