Markets continued their steady climb despite ongoing uncertainties surrounding trade policies and tariffs. Equity markets also remained buoyant, supported in part by a strong rally in U.S. steel and aluminium stocks as they benefitting from latest Trump tariffs. Steel and aluminium importers to pay 25% on top of existing tariffs. Trump also warned of broader “reciprocal” tariffs later in the week, suggesting retaliation from recent moves from trade partners.
Global Equities were in the green, while U.S. Treasuries were lacklustre, 10yr notes hovering around 4.5%. Commodities were hot, with broad-based gains across metals and energy markets. Oil prices climed 1.4% to $72.4 for WTI and almost $76 for Brent crude, partly driven by escalating tensions between Israel and Hamas, as both sides accused each other of violating ceasefire agreements. Copper rallied 2.36%, while gold set another all time high, rallying over 1.5% and now at $2,922. There is a massive disconnect between “paper gold” and the real stuff. Borrowing costs for physical are creeping towards 20%. For more information on physical precious metals and Conduit physical precious metals note backed by allocated, vaulted gold (no lending permitted) please reach out.
.In currency markets the Chinese yuan remained stable, China inflation data released on Sunday suggested a mixed picture for the world's second-largest economy. Consumer inflation picked up to 0.5% year-on-year, the fastest pace in five months, but producer prices remained stuck in deflation, falling 2.3% year-on-year for the 28th consecutive month. The data highlights the uneven nature of China’s post-pandemic recovery, with consumer demand showing signs of resilience, while industrial activity continues to struggle.
Looking ahead, market attention will be firmly fixed on Powell’s semi-annual testimony to Congress, which begins tomorrow before the Senate Banking Committee and continues Wednesday before the House Financial Services Committee. Powell is expected to reinforce the message that the Fed is not in a hurry to cut rates, citing strong labour market data and persistent inflation risks. Last Friday’s payroll report, while showing slightly weaker headline job gains (+143,000), was bolstered by significant upward revisions to previous months and a drop in the unemployment rate to 4.0%. Wage growth was stronger than expected, growing 0.5% month on month.
Inflation will remain a key market theme this week, with the January CPI on Wednesday. Economists expect headline inflation to hold steady at 2.9% y/y, while core inflation is expected to tick down slightly to 3.1%. This follows the New York Fed 1yr inflation expectations coming in unchanged at 3% yesterday. Thursday’s PPI will also be closely watched, particularly given the importance of its components in the Fed’s preferred core PCE measure. Meanwhile, US retail sales on Friday provides a critical gauge of consumer strength, with the consensus forecast pointing to a modest 0.3% m/m increase.
In Europe, the UK’s fourth-quarter GDP report on Thursday will take centre stage, following last week’s Bank of England meeting, which left rates unchanged but hinted at a gradual shift toward easing later in the year. Inflation data from Denmark, Norway, and Switzerland is also on the docket, while earnings season continues in full force, with key reports from companies across the S&P 500 and Stoxx 600.
Emerging markets saw a sharp focus on Ecuador following the first round of the presidential election over the weekend. With nearly 96% of ballots counted, incumbent President Noboa secured 44.4% of the vote, slightly ahead of Luisa at 43.86%, with Iza trailing in third at 5.2%. The unexpectedly tight result sets the stage for a high-stakes runoff election on April 13th, raising concerns over potential political instability. Ecuador’s bonds were off around 9 points, sliding back to levels seen at the beginning of the year.
Columbia was stable following the announcement that there will be $3.6bn of issuance this year. lower than market expectations. Political uncertainty remains a lingering factor, although the market seemed to shrug off President Petro’s request for his cabinet to resign. Dominican Republic (DOMREP) announced a tender for its 2026 USD and local currency bonds, in conjunction with new issuance.
In Asia Mongolia is preparing for an offering of 5yr and 10yr bonds with the proceeds earmarked for tendering the outstanding 2028 bonds.
Comments