- US stocks closed notably in the red with the Nasdaq 100 (-2.8% ) the clear laggard as the Technology sector was heavily pressured alongside significant losses in NVIDIA (-8.6%) post-earnings, while risk sentiment was also weighed on by the latest tariff remarks after President Trump clarified that there will be a 10+10 tariff on China for a total of 20% additional tariffs and that the proposed tariffs on Canada and Mexico are scheduled to go into effect on March 4th.
- USD strengthened as the threat of US tariffs continued to be felt by markets with President Trump noting that the proposed Canada and Mexico tariffs are scheduled to take effect on March 4th and that China will be charged an additional 10% tariff on that date to lift the total additional tariffs on China to 20%. There were several data releases which were ultimately mixed as the second GDP estimate for Q4 was unchanged from the advanced reading and matched expectations, quarterly Core PCE printed firmer than expected and Initial Jobless Claims rose by more than anticipated, while the attention now turns to the monthly PCE data on Friday.
- Looking ahead, highlights include Japanese Industrial Production, Retail Sales & Tokyo CPI, Australian Private Sector Credit, Supply from Australia, Taiwan Holiday Closure.
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LOOKING AHEAD
- Highlights include Japanese Industrial Production, Retail Sales & Tokyo CPI, Australian Private Sector Credit, Supply from Australia, Taiwan Holiday Closure.
- Click for the Newsquawk Week Ahead.
US TRADE
- US stocks closed notably in the red with the Nasdaq 100 (-2.8% ) the clear laggard as the Technology sector was heavily pressured alongside significant losses in Nvidia (-8.6%) post-earnings, while risk sentiment was also weighed on by the latest tariff remarks after President Trump clarified that there will be a 10+10 tariff on China for a total of 20% additional tariffs and that the proposed tariffs on Canada and Mexico are scheduled to go into effect on March 4th.
- SPX -1.59% at 5,862, NDX -2.75% at 20,551, DJI -0.45% at 43,240, RUT -1.59% at 2,140.
- Click here for a detailed summary.
TARIFFS/TRADE
- US President Trump posted on Truth that the proposed tariffs on Canada and Mexico are scheduled to go into effect on March 4th and said "China will likewise be charged an additional 10% Tariff on that date", while he added that the April 2nd reciprocal tariff date will remain in full force and effect.
- US President Trump said there will be an additional 10% tariff on China and clarified that there will be a 10+10 tariff on China for 20%, while he stated they are not seeing progress on drugs coming into the country and that Canada should be apprehending much more fentanyl. Trump also criticised EU VAT taxes and said he doesn’t like the way the EU is treating US companies, as well as noted they are going to have reciprocal tariffs and responded will have to take a look when asked if there will be sanctions on the UK.
- US President Trump said UK PM Starmer is a tough negotiator and that the US and UK have a special relationship, while he added that meetings with UK PM Starmer were tremendously productive and they are going to have a deal done on trade with the UK rather quickly.
- White House clarified that the 10% China tariff announced by US President Trump on Truth Social is in addition to the 10% tariff announced earlier in the year, taking it to a 20% total tariff, according to CNBC's Javers.
- White House Economic Adviser Hassett said US President Trump is to decide on tariff policies after the study comes out on 1st April, according to CNBC.
- Canadian PM Trudeau said they will have an immediate and extremely strong response if the US imposes tariffs next Tuesday.
- China’s Commence Minister expressed concerns to the USTR about US tariffs on Chinese exports and said China is willing to work with the US to create a better business environment for enterprises in both countries.
- India is reportedly considering tariff reductions on cars and chemicals ahead of Trump's looming tariff deadline, according to Bloomberg.
NOTABLE HEADLINES
- Fed’s Bowman (voter) urged more tailored regulation for community banks.
- Fed's Schmid (2025 voter) said he is more cautious about inflation given the lack of progress and concern is growing about the recent increase in inflation expectations, while he added that expectations surveys are imperfect, but the recent sharp climb means the Fed cannot let down its guard. Furthermore, Schmid said that holdings of MBS are influencing the 10yr yield by 50-80bps.
- Fed's Hammack (2026 voter) said the Fed is likely to hold rates steady 'for some time' and seeks evidence inflation moving to 2% inflation before supporting more cuts, while she added that Fed rate policy may be close to neutral right now. Hammack said monetary policy has the ‘luxury of being patient’ right now and patient policy will also allow the Fed to monitor the jobs market, as well as noted that Fed policy does not appear ‘meaningfully restrictive’.
- Fed's Harker (2026 voter) said the policy rate remains restrictive enough to continue putting downward pressure on inflation.
- US White House Economic Advisor Hassett said he had his first "big" meeting with other White House leaders yesterday and discussed the next stage of the House Reconciliation package.
DATA RECAP
- US GDP 2nd Estimate (Q4) 2.3% vs. Exp. 2.3% (Prev. 2.3%)
- US Core PCE Prices Prelim (Q4) 2.7% vs. Exp. 2.5% (Prev. 2.5%)
- US Durable Goods (Jan) 3.1% vs. Exp. 2.0% (Prev. -2.2%, Rev. -1.8%)
- US Pending Sales Change MM (Jan) -4.6% vs. Exp. -1.3% (Prev. -5.5%, Rev. -4.1%)
- US Initial Jobless Claims 242k vs. Exp. 221k (Prev. 219k, Rev. 220k)
- US Continued Jobless Claims 1.862M vs. Exp. 1.872M (Prev. 1.869M, Rev. 1.867M)
- US KC Fed Manufacturing (Feb) -13.0 (Prev. -9.0)
- US KC Fed Composite Index (Feb) -5.0 (Prev. -5.0)
FX
- USD strengthened as the threat of US tariffs continued to be felt by markets with President Trump noting that the proposed Canada and Mexico tariffs are scheduled to take effect on March 4th and that China will be charged an additional 10% tariff on that date to lift the total additional tariffs on China to 20%. There were several data releases which were ultimately mixed as the second GDP estimate for Q4 was unchanged from the advanced reading and matched expectations, quarterly Core PCE printed firmer than expected and Initial Jobless Claims rose by more than anticipated, while the attention now turns to the monthly PCE data on Friday.
- EUR was pressured amid the firmer buck and amid the looming tariff threat as Trump criticised the VAT taxes, while he added that they don't like the way the EU is treating their companies and is going to have reciprocal tariffs.
- GBP gave way to the dollar strength and tested the 1.2600 level to the downside although the downside was less severe than other G10 counterparts with the UK seen to have less exposure to US tariffs than peers, while US President Trump said they are going to have a deal done on trade with the UK rather quickly and that UK PM Starmer tried to convince him not to impose tariffs on the UK during their meeting.
- JPY was pressured owing to the dollar strength but with upside capped amid the broad negative risk sentiment.
FIXED INCOME
- T-notes settled lower to snap their recent win streak but were off intraday lows amid a sell-off in stocks and Trump's tariff threats.
COMMODITIES
- Oil prices gained and settled at session highs amid Trump tariff rhetoric and reports that OPEC+ is hesitant to go ahead with the planned April oil output hike.
- OPEC+ is hesitant to go ahead with the planned April oil output hike due to uncertainty over sanctions and tariffs, according to Reuters sources. Furthermore, it was stated that Russia and UAE would like to proceed with the April oil output hike and other members including Saudi Arabia favour a delay.
- Baghdad submitted a new legal challenge to an Iraqi court ruling upholding foreign firms' contracts in Kurdistan, according to a document seen by Reuters.
GEOPOLITICAL
MIDDLE EAST
- Israeli PM Netanyahu instructed the negotiation delegation to depart for Cairo today to continue Gaza ceasefire talks, according to Reuters.
- Israeli Defence Minister Katz said even during the ceasefire, they received information that Hamas was plotting to attack soldiers and attack communities, according to journalist Stein.
- Israeli Finance Minister Smotrich is to meet US Treasury Secretary Bessent in Washington DC next Wednesday.
RUSSIA-UKRAINE
- US President Trump said they can get a peace deal on Ukraine. Trump also said that having the rare earth deal will be a backstop for Ukraine and that they are very well advanced on the deal but not done yet and have had very good talks with Russia and Ukraine. Furthermore, he said Russia has been acting very well and is well advanced on a peace deal and responded "Did I say that?" when asked if he still believed Ukraine President Zelensky is a dictator.
- US President Trump said they are working very hard to get the war in Ukraine to end and are moving along rapidly, as well as noted that the US will be a major partner in developing Ukraine's oil and gas. Trump said he discussed a ceasefire with UK PM Starmer and will meet Ukrainian President Zelensky at 11:00 EST on Friday, while UK PM Starmer said the UK is ready to put boots on the ground and planes in the air to sort out a Ukraine peace deal.
- Russia's Kremlin said they think the process with the US can move forward with political will and welcome the fact that US President Trump is "willing to listen", while it added that no one expects quick and easy solutions with the US and there is no substantiative discussion yet on cooperation between Russian and US companies.
- NATO Chief Rutte said allies to Ukraine are preparing billions more in aid and contributions to security guarantees.
OTHER
- Chinese Military Southern Command said they organised combat readiness patrols in the "territorial" waters and airspace of Scarborough Shoal and surrounding areas on February 27th.
ASIA-PAC
NOTABLE HEADLINES
- US Commerce Secretary Lutnick reiterated that what concerns him the most is China which he said is a giant country that hates them and doesn’t want them to not have their way of life, according to Fox.
- China’s financial regulator encourages banks and insurers to enhance medium-to-long-term lending support for tech innovation and equipment upgrades in sectors including steel, nonferrous metals, and petrochemicals.
- China is set to boost financial support for EV charging facilities, according to Bloomberg.
- BoJ Governor Ueda said there is still uncertainty on US tariffs policy and how other countries will respond and said they will make a decision on monetary policy after scrutinising the impact of US policies on the global economy, markets, and Japan's economy and prices. Furthermore, he added when there are sharp moves in long-term rates that deviate from usual moves, they stand ready to use flexible market operations as an exceptional response.
EU/UK
NOTABLE HEADLINES
- ECB Minutes stated that members widely agreed that the incoming data was broadly in line with the medium-term inflation trajectory embedded in the December staff projection, while the disinflationary process was well on track. It was also argued that greater caution was needed on the size and pace of further rate cuts when policy rates were approaching neutral territory, in view of prevailing uncertainties.
DATA RECAP
- EU Economic Sentiment (Feb) 96.3 vs. Exp. 96.0 (Prev. 95.2, Rev. 95.3)
- EU Services Sentiment (Feb) 6.2 vs. Exp. 6.8 (Prev. 6.6, Rev. 6.7)
- EU Consumer Confidence Final (Feb) -13.6 vs. Exp. -13.6 (Prev. -13.6)
- EU Industrial Sentiment (Feb) -11.4 vs. Exp. -12.0 (Prev. -12.9, Rev. -12.7)
