The desire to believe

Daily update

Markets desperately want to believe in the positive. Focus on the apparent 15-point US plan to end the war has received more attention than Iranian dismissals of this, or the fact that passage through the Strait of Hormuz is minimal. Domestic US politics may be reinforcing the perception that the US wishes to exit the war. The Florida state house district that includes the Mar-A-Lago estate was won by a Democrat who campaigned on the affordability crisis, despite US President Trump endorsing and voting (by mail) for the Republican candidate.
UK February inflation data shows that pre-war inflation pressures were moderating. Output producer price inflation was weaker than expected, and consumer price inflation was not especially threatening. With this backdrop, the language of the Bank of England at its latest meeting might be considered an overreaction to the consequences of a relative price shock.
US February import and export price data is of some interest as the Federal Reserve has been focused on the effects of tariffs on core inflation. However the numbers will just continue to confirm that tariffs are born domestically, which is already established.
German ifo business confidence is likely to be affected by the news cycle more than economic reality.