Market News

• Prior 48.4
• Composite PMI vs 49.9 prelim
• Prior 49.1

More to come..

The main purpose of the meeting is to assess the implications of the US-Iran conflict, with Lescure revealing that he had already spoken to US Treasury secretary Bessent and other counterparts. After which, all parties agreed on the necessity of convening next week to "fully understand" the situation in the Middle East.

I wouldn't expect much updates or significant headlines to come from the meeting. However, it is best to be aware that there will be some discourse on the impact of the US-Iran conflict on major economies.

One can safely assume that higher oil prices and energy security will be among the discussions. That as it will start to stir up conversations about inflation pressures once again. From yesterday: Inflation fears reemerge…

• Prior 53.5

The headline estimate misses on expectations but still reaffirms an expansion in Spain's services sector to start the year. That being said, the rate of growth is the weakest since June last year. That amid reports of softer demand and cooler market conditions. Adding to that, employment also rose to a lesser degree, with some evidence of firms not replacing leavers as expectations about the future softened to their lowest for six months.

On the prices front, cost pressures are seen intensifying as input price inflation accelerated to its highest level in a year. So, that's something to be wary about.

HCOB notes that:

“The Spanish private sector economy is continuing to lose growth momentum, with the HCOB Composite PMI posting at…

• Prior +0.1%
• Core CPI +0.4% y/y
• Prior +0.5%

Headline annual inflation remains unchanged and continues to border on deflation territory. The bad news for the SNB is that core annual inflation is seen trickling lower to 0.4%. For some context, core annual inflation was still hovering at 0.9% in February 2025. It's a slow descend but one that continues to threaten a return to deflation for the Swiss economy.

The bright side is that the US-Iran conflict might help to push up price pressures a little, even if temporary. However, it's a double-edged sword as the SNB has to deal with a much stronger Swiss franc amid heightened geopolitical tensions. And they're already having to step into the market this week it would seem here.

Despite that, EUR/CHF…

Upcoming events traders and investors may want to look at, in a nutshell

• Several scheduled market events line up over the next few sessions.

• Oil inventories, Treasury auctions, and weekly options expiration often affect liquidity and short-term volatility.

• Energy markets could react quickly to the EIA petroleum report.

• Treasury bill auctions may nudge short-term yields and rate-sensitive stocks.

• Friday’s weekly options expiry can create late-session positioning and strike-related flows.

A cluster of timing events for markets

The global market landscape remains fraught with volatility as Wall Street braces for more trouble up ahead, driven by deteriorating technicals and a failed recent bounce that left the S&P 500 struggling below key moving…

• 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.…