- US December trade balance -70.3B vs -55.5B expected
- Initial jobless claims 206K vs 225K estimate
- US February Philly Fed Business Index +16.3 vs +8.5 expected
- Atlanta Fed GDPNow final reading 3.0% vs 3.6% prior
- EIA weekly crude oil inventories -9014K vs +2149K expected
- Trump: Good talks being had with Iran
- US January pending home sales -0.8% vs +1.3% expected
- Fed's Kashkari: Labor market is softer but still "decent to pretty good"
- Walmart Q4: Consumer still spending but the guidance is the story for the Fed
- Canada December trade balance -1.31B vs -2.59B prior
Markets:
- WTI crude oil up $1.56 to $68.75
- US 10-year yields down 1 bps to 4.07%
- Gold up $20 to $4999
- AUD leads, CHF lags
- S&P 500 down 0.3%
The market focus seems to be shifting towards Iran as oil prices hit the highest since August on reports of a persistent US military buildup in the region. That's sparked a persistent bid in the US dollar that extended today. Some of the thinking is that any Iranian oil disruptions -- like higher prices or a closure of the Strait of Hormuz -- would fall harder on Europe than the US. WTI crude rose strongly.
In economic data, the softer US trade balance report led to some notable downgrades to tomorrow's advanced Q4 US GDP report and likely means the full-year 2025 number will be below 3%.
The good news for the US was that initial jobless claims fell back and the Philly Fed improved. I highlighted comments from the Deere & CO CFO would said:
"The developments over the course of the past three months has strengthened our belief that 2026 marks the bottom of the current cycle."
Shares of DE were up 11.6% today.
Overall, the moves in FX were small and stocks slipped modestly.
