- US stock markets were closed for Presidents' Day although equity futures saw mild gains in the shortened trading hours and T-note futures marginally declined after the jump on Friday following weak retail sales data. In terms of FX, the dollar was flat and the yen outperformed after strong GDP numbers whereas AUD was little changed ahead of the RBA overnight, while Brent prices settled higher on fading Russia and Ukraine optimism with peace talks facing disagreements while Ukraine targeted a Russian pipeline overnight.
- USD was relatively unchanged amid a mixed performance against its major peers and with US newsflow very light as participants were away for the day, while comments from Fed officials Bowman and Harker provided little to shift the dial and participants also look ahead to the FOMC minutes midweek.
- Looking ahead, highlights include RBA Rate Decision & Press Conference, Comments from Fed's Waller, Supply from Japan.
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LOOKING AHEAD
- Highlights include RBA Rate Decision & Press Conference, Comments from Fed's Waller, Supply from Japan.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stock markets were closed for Presidents' Day although equity futures saw mild gains in the shortened trading hours and T-note futures marginally declined after the jump on Friday following weak retail sales data. In terms of FX, the dollar was flat and the yen outperformed after strong GDP numbers whereas AUD was little changed ahead of the RBA overnight, while Brent prices settled higher on fading Russia and Ukraine optimism with peace talks facing disagreements while Ukraine targeted a Russian pipeline overnight.
- Click here for a detailed summary.
TARIFFS
- US President Trump re-posted comments from Truth last week on tariffs in which he stated that he decided, for purposes of fairness, to charge a reciprocal tariff meaning, whatever countries charge the US, we will charge them “No more, no less!".
NOTABLE HEADLINES
- Fed's Bowman (voter) said she expects inflation to decline but upside risks remain and they need greater confidence in falling inflation before cutting rates again, while she added that patience on rate cuts will allow more clarity on the impact of administration policies.
- Fed's Harker (2026 voter) said the current economy argues for a steady rate policy for now and monetary policy is in a good place right now, while he added that future Fed rate policy choices will be data-driven and the Fed policy stance should continue to lower inflation. Harker also stated that home insurance price rises are becoming a real challenge and inflation is moving slowly down but there are risks, as well as noted that the labour market looks pretty solid and the Fed should move to an all or mostly treasury bond balance sheet.
FX
- USD was relatively unchanged amid a mixed performance against its major peers and with US newsflow very light as participants were away for the day, while comments from Fed officials Bowman and Harker provided little to shift the dial and participants also look ahead to the FOMC minutes midweek.
- EUR marginally softened against the greenback after failing to sustain the 1.0500 status and after European leaders met in Paris for an emergency summit on Ukraine.
- GBP strengthened with GBP/USD above the 1.2600 level and UK PM Starmer is set to meet with US President Trump next week.
- JPY outperformed and trades with a 151.00 handle against the buck after benefitting from the recent strong GDP data.
FIXED INCOME
- T-note futures pared some of Friday's spike higher in what was a quiet day for bonds with cash treasury trade closed for the US holiday.
COMMODITIES
- Oil prices saw choppy trade on US Presidents' Day with a focus on geopolitics and supply updates.
- OPEC+ is reportedly mulling delaying bringing back oil barrels in April, according to Bloomberg sources although no decision has been made yet and could be finalised in the coming weeks, while a source noted that global oil markets remain too fragile to revive production now. However, it was later reported that Russian Deputy PM Novak said OPEC+ is not considering a delay of the April oil supply restart, according to RIA.
- Russia is reportedly to discuss a potential full ban on gasoline exports as of February 20th, according to Reuters citing Russian press.
- US Energy Secretary Wright said there are many more natural gas approvals in the queue and they are going to focus efforts on how to stir growth of energy production, especially nuclear, while the number one priority is to get out of the way of production and export oil and gas.
GEOPOLITICAL
MIDDLE EAST
- Israeli security official said they are preparing to receive the bodies of four hostages on Thursday and are working to secure the release of six living hostages on Saturday.
- Israel's military said the IDF will retain a small number of troops in five strategic locations in southern Lebanon following the February 18th ceasefire deadline as a temporary measure and in accordance with the ceasefire mechanism. Furthermore, an Israeli political source said Israel will withdraw from southern Lebanon, except for 5 strategic points.
- Israeli media reported that a senior Hamas official was assassinated in a raid on Sidon in southern Lebanon, according to Al Arabiya.
- Hamas is reportedly prepared to cede control of Gaza to the Palestinian Authority, according to the Jerusalem Post citing Sky News Arabia.
- Iran’s Foreign Minister said they will never negotiate under pressure or threat but if the US negotiates with respect and dignity, the Iranian response will be with the same language.
RUSSIA-UKRAINE
- Ukrainian President Zelensky said “Ukraine regards any negotiations on Ukraine without Ukraine as ones that have no result, and we cannot recognise . . . any agreements about us without us”, according to FT.
- Ukrainian President Zelensky said his visit to Saudi Arabia is planned for Wednesday and Ukraine is not participating in these talks between the US and Russia, while he added that guarantees should be included "at least somehow" in the economy treaty with the US.
- Russian Foreign Minister Lavrov said no thoughts of territorial concessions to Ukraine at negotiations.
- Kremlin foreign policy aide Ushakov said regarding talks with the US that Russia has yet to agree on how to start Ukraine talks, while Russia's sovereign wealth fund chief Kirill Dmitriev may join the Russian delegation and the Russian delegation has a "business-like" mood. Furthermore, it was stated that the US has yet to appoint its chief negotiator for the Ukraine talks and that for now, Russia and US are talking about bilateral talks.
- US President Trump reportedly demands a higher share of Ukrainian GDP than reparations imposed on Germany, according to the Telegraph. President Trump’s demand for a USD 500bln “payback” from Ukraine goes far beyond US control over the country’s critical minerals and covers everything from ports and infrastructure to oil and gas, and the larger resource base of the country. Furthermore, the terms of the contract that Zelensky’s office received a week ago are said to amount to the US economic colonisation of Ukraine, in legal perpetuity and imply a burden of reparations that cannot possibly be achieved, while the document has reportedly caused consternation and panic in Kyiv.
- US Special Envoy to Ukraine Kellogg responded "You take no options off the table" when asked if the US would provide a backstop for European support and they are going to hear discussion points from everyone. Kellogg said the trip to Ukraine is still being finalised and will meet with President Zelensky, while he added no one will impose a peace deal on Zelensky and that he and the people of Ukraine will make that call, while the job is to facilitate security guarantees for Ukraine.
- UK PM Starmer said the future of Ukraine is an existential issue for Europe and it is pressing that they now share the burden, while he added Europe must play its role and there must be a US backstop which is the only way to deter Russia. It was separately reported that UK PM Starmer said part of his message to European allies is that they’ve all got to step up on capability and on spending and funding, while he added that includes the UK, which is why he has made a commitment to spend more, according to FT.
- German Chancellor Scholz said they must continue to support Ukraine and no dictate can be imposed on Ukraine, while he added if European states spend over 2% of GDP on defence, Germany considers this should not be part of EU budget limits.
- Polish PM Tusk said all participants in the meeting on Ukraine had similar opinions to Poland on key issues and all agreed close cooperation within NATO is needed. Tusk added they realise that transatlantic relations are in a new stage and European partners realise that the time has come for greater European defence capabilities and spending.
- Danish PM said they must ramp up military preparedness and sees no signs that the Russians want peace.
- Spain’s Foreign Minister said it is too soon to discuss the deployment of troops in Ukraine and expected unity from Europe to Ukraine at the Paris summit.
- European officials said President Trump is likely to approve the withdrawal of US troops from the Baltic states and possibly further to the West, according to Al Jazeera
OTHER
- Taiwan is considering a multi-billion-dollar weapons purchase from the US which could be between USD 7-10bln and could include coastal defence missiles and HIMARS rockets, while the package would send a message that Taiwan is committed to its defence, according to Reuters sources.
ASIA-PAC
NOTABLE HEADLINES
- Chinese President Xi said the private economy has broad development prospects and great potential, while he added that challenges in the private economy are temporary, not long term, and can be overcome.
- China's top legislators are set to meet from February 24th-25th, according to Xinhua.
GLOBAL NEWS
- Crews responded to a plane crash at the Toronto Pearson airport, while the incident occurred upon landing involving a Delta Airlines (DAL) plane arriving from Minneapolis although all passengers and crew are accounted for.
EU/UK
NOTABLE HEADLINES
- BoE Governor Bailey said the Q4 GDP figures do not change the general story on the UK economy, while he reaffirmed a ‘gradual and careful’ approach.
- UK PM Starmer is to meet US President Trump next week.
- ECB's Holzmann said there's some probability of a March rate cut and decisions in favour of more cuts are getting harder, according to Bloomberg.
- ECB's Nagel said Germany could be particularly hard hit by US tariffs and the impact on the US could outweigh all of the benefits to them.
