Market News

• China willing to work with the US to promote communication on all levels
• Willing to maintain exchanges with the US Congress
• Hopes that the US Congress views China in an objective manner
• China has its own principles and red lines
• As always, will resolutely defend its sovereignty, security, and development interests
• Ties with the US remain generally stable
• Diplomacy between China and US leaders play a crucial role in bilateral ties
• Believes that China and US should respect each other, coexist peacefully

The comments here are rather generic but it sets the tone before we get to some mid-level talks between the US and China next week. All that before the big summit in Beijing featuring US president Trump and China president Xi Jinping.

In the run up…

• China official manufacturing PMI 49.0 vs 49.1 expected
• Japan finance minister steps in with some added verbal intervention on the yen
• Australian Q4 GDP +0.8% vs +0.6% expected
• New Zealand Q4 terms of trade +3.7% q/q vs -0.7% expected

Markets:

• Korean Kospi down 9.1%
• Nikkei 225 down 3.9%
• Gold up $76 to $5163
• US 10-year yields up 0.4 bps to 4.06%
• WTI crude oil up 89-cents to $75.45
• JPY leads, AUD lags

Asian equities were battered today in a second day of heavy selling. The Kospi decline was breathtaking, falling by as much as 11% before recovering to -9%. Incredibly, that only wipes out the February gain and the index is still up more than 20% year to date.

Japanese stocks were hit to a lesser extent and now the Nikkei 225 has largely wiped out the…

Katayama says that:

• It would be desirable for currencies to move in stable manner reflecting fundamentals
• We are watching market developments closely, prepared to take various measures if needed
• Intervention could be included in various measures as agreed under US-Japan joint statement
• Will keep an eye on any increase in bond yields

The comments above are not anything new. We've heard them all before and many a time in the past two months. When it comes to Japan officials intervening verbally, it is more so on the timing. And this comes after USD/JPY ran higher close to the 158.00 level overnight, the highest point since Tokyo performed 'rate checks' at the end of January.

Despite normally being a safe haven currency, the yen hasn't found any…

The best-case scenario in this war (for markets at least) is that Iran quickly folds.

Here are some estimates about how many missiles Iran has launched each day of this campaign.

• Day 1 (Feb 28) — ~350 Ballistic Missiles: Open-source intelligence confirms that on the first day alone, Iran fired at least 247 ballistic missiles at just three Gulf states: the UAE (~137), Qatar (~65), and Bahrain (~45). When you add the simultaneous barrages directed at Israel, Jordan, Kuwait, and Saudi Arabia, the aggregate total easily hits the ~350 mark.

  Day 2 (March 1) — ~175 Ballistic Missiles: This drop-off is corroborated by regional defense reports. For context, the UAE Ministry of Defense reported a sharp decline in their sector on Day 2, intercepting…

• Prior was 49.3
• Non-manufacturing 49.5 vs 49.4 prior
• Composite 49.5 vs 49.8 prior

The malaise in the Chinese economy continues.

• Prior quarter was +0.4%
• Real GDP y/y +2.6% vs +2.2% expected
• Prior y/y GDP was +2.1%
• Final consumption expenditure +0.5% vs +0.6% prior
• GDP chain price index +1.4% vs +0.8% prior
• Gross fixed capital expenditure +0.7% vs +3.0% prior

This is a good report, though there has been little reaction from AUD.

Australia just dropped a Q4 GDP print that blew past expectations and puts the recovery story front and centre.

After flirting with stall speed through mid-2024 — when quarterly growth scraped down to barely 0.1% — the rebound has been real. Growth stepped up through early 2025, printing around 0.4–0.5%, before surging to roughly 0.7% around the middle of the year. The latest read has cooled back to 0.4%, but the trend is still comfortably above…

• Prior was -2.1%
• Import prices vs +0.8% expected
• Prior import prices +0.5%
• Export prices vs +0.5% expected
• Prior export prices -1.6%

New Zealand's terms of trade measure the ratio of the country's export prices to its import prices, serving as a key indicator of the nation's purchasing power in international markets. This metric is particularly important for New Zealand given its heavy reliance on commodity exports, especially dairy, meat, forestry products, and horticultural goods.

Throughout 2025, New Zealand's terms of trade were shaped by several intersecting forces. Global dairy prices, which represent a significant share of export revenue, experienced fluctuations driven by shifting demand from key markets such as China and Southeast Asia.…

• S&P and NASDAQ index close down near 1%
• Trump: DFC to provide political risk insurance and guarantees to all Maritime Trade
• Pres. Trump speaking from the White House: Felt strongly Iran was going to attack first
• Feds Kashkari: Iran war impact could have monetary policy impact
• ECB's Kazaks: Current rates are appropriate based on what I am seeing
• Feds Williams: Long-term inflation expectations have remained remarkably stable
• More from Feds Williams: AI will change productivity growth, demand for labor
• Feds Schmid: No room to be complacent on inflation
• Gold Technicals: In a surprise move, gold is racing to the downside. What next?
• Fed's Williams: If inflation ebbs, further reduction in policy rate would be warranted
• Crude oil is a surging. What needs…

• S&P and NASDAQ index close down near 1%
• Trump: DFC to provide political risk insurance and guarantees to all Maritime Trade
• Pres. Trump speaking from the White House: Felt strongly Iran was going to attack first
• Feds Kashkari: Iran war impact could have monetary policy impact
• ECB's Kazaks: Current rates are appropriate based on what I am seeing
• Feds Williams: Long-term inflation expectations have remained remarkably stable
• More from Feds Williams: AI will change productivity growth, demand for labor
• Feds Schmid: No room to be complacent on inflation
• Gold Technicals: In a surprise move, gold is racing to the downside. What next?
• Fed's Williams: If inflation ebbs, further reduction in policy rate would be warranted
• Crude oil is a surging. What needs…

The price of crude oil has moved lower trading to $72.39. That was just below the 38.2% of the move up from the low last week at $72.49. Staying below that level would open the door to more downside momentum.

US stocks are edging higher as well. The NASDAQ index is trading at to a new high for the day at 22594.38. The S&P index is also yet you thousand dollars at 6838.07.. Those indices are still lower in the day by about -0.62%

• We’re talking about some very big trade deals.

• We’re doing very well.

• Felt strongly Iran was going to attack first.

• Based on the way the talks were going.

• If anything, I might have forced Israel’s hand.

• Iran attacking countries that had nothing to do with what’s going on.

• Iran hitting only civilian places.

• Iran no longer has air protection, detection facilities.

• There was another hit today on the new leadership.

• A lot of people in Iran asking for immunity.

• We’ll just continue to go forward.

• Worst case is that we had Iran and somebody takes over as bad as the previous person.

• We would like to see somebody in there that's better.

• We will see what happens in Iran but first we have to finish off the military.

• Someone from within might be more appropriate…

• Nasdaq stays under pressure amid lower growth and higher inflation fears on US-Iran war
• Inflation fears reemerge as markets digest higher energy prices from US-Iran conflict
• Will Iran really manage to fully block the Strait of Hormuz?
• EURUSD falls back to January lows despite ECB rate hike bets as US Dollar surges
• Eurozone February preliminary CPI +1.9% vs +1.7% y/y expected
• Italy February preliminary CPI +1.6% vs +1.1% y/y expected
• Oil prices surge higher, looks to eclipse the opening gap up from yesterday
• Dollar continues to go from strength to strength to start the week
• ECB's Villeroy: It would be a mistake to predict rate move in a hurry
• USDJPY on track to revisit the "intervention" level as Japanese yen lacks bullish drivers
• Another rough day…