Elias Haddad of Brown Brothers Harriman (BBH) notes that the dollar is slightly stronger, mainly due to the weakening Japanese yen, and US stocks are stabilizing after the AI-fueled sell-off. The bank notes a potential deterioration in risk sentiment from recent global U.S. tariffs and possible trade frictions, while comments from Fed Governor Waller and upcoming ADP and confidence data shape expectations for the next FOMC decision.
Tariffs, Fed rhetoric and focus on data
“The U.S. dollar is slightly stronger, largely reflecting weakness in the broad yen. S&P 500 futures point to a firmer opening after the benchmark fell 1% yesterday on the so-called AI fear trade. At the same time, the U.S. Supreme Court’s ruling on tariffs could exacerbate trade frictions, worsening broader risk sentiment.”
“Fed Governor Christopher Waller sees an even chance of a 25-basis-point cut at the next FOMC meeting on March 17-18. Waller said that “if the good labor market news from January is reversed or evaporates in February, it would confirm my position at the last FOMC meeting that a 25-basis-point rate cut is appropriate and that such a cut should be made at the March meeting.” The Fed is funding futures prices with almost zero chance of a cut in March.”
“ADP’s private sector employment change for the four weeks to February 7 will be next (1:15 p.m. in London, 8:15 a.m. in New York). The latest report showed that private employers added an average of 10.25k jobs per week in the four weeks ending January 31. As a side note, ADP’s January jobs print increased by 22,000, while non-farm private sector (NFP) wage growth was much stronger at 172 thousand.
“Another highlight is the Conference Board’s February Consumer Confidence Index (3 p.m. in London, 10 a.m. in New York). Consumer confidence returns to 87.1 after falling to 84.5 in January, the lowest level in over a decade. Note consumer views on the labor market, which deteriorated in January.”
(This article was created with the facilitate of an artificial intelligence tool and has been reviewed by an editor.)
