Daily update
Daily update
- Yesterday saw some increase in macro uncertainty, in case investors thought the world was getting predictable. US President Trump’s comments on Ukraine, and on Russia presented a change of tone. That added some risk premium into the oil price. However, investors tend to be cautious about overreacting to such individual statements.
- Federal Reserve Chair Powell’s Rhode Island excursion was of more market interest. Powell deliberately noted that both inflation and unemployment are moving in the wrong direction from the Fed’s perspectives. This shifts the narrative (slightly) from the idea that employment is more of a focus. There is little the Fed can do about the current inflation drivers (which are not, generally, cyclical), and so labor market weakness is likely to be the ultimate determinant of policy. Powell apparently just wants investors’ confidence to be somewhat less certain.
- Argentinean President Milei did not get US taxpayer cash, but did get promises of more prompt payments of previously pledged international agency money. As with all cases where intervention is more verbal than practical, the ultimate success of this depends on whether Argentina’s problems are sentiment-driven or fundamental in nature.
- The data calendar is quiet—the German ifo business sentiment poll, and some US construction data are the main releases.