Major US indices closed mixed on February 26, 2025. Nvidia is expected to announce earnings later, while Axios reported that Trump plans to continue tariffs on Canada and Mexico next week.
Deutsche Bank altered its longstanding bearish stance on the euro. Crude oil prices decreased by $0.31, settling at $68.62, and Bitcoin reached its lowest level since November 11.
The US sold 7-year notes at a rate of 4.194%, which was slightly below expectations. Fed’s Bostic mentioned ongoing high inflation, though some progress has been made on the issue.
Japan’s top FX diplomat observed no disparity in currency fluctuations, while the UK’s BOE’s Dhingra noted a decline in factors driving trade expansion. US crude oil inventory data showed a drawdown of -2332K against an expected build of 2605K. January’s new home sales came in at 657K, falling short of the anticipated 680K.
In the forex market, EURUSD has seen a ceiling between 1.0527 and 1.0532, with current prices near its 200-hour moving average of 1.0472. GBPUSD fluctuated around its 100-day moving average at 1.2847 and reached a peak of 1.2715 today. USDJPY is trading around 149.10, showing a potential short-term downside bias.
Overall, economic data was limited, yet notable trading activity in equities and currencies was observed, with developments anticipated in the near future.
Nvidia’s earnings report later today could inject momentum into equities, particularly tech stocks, after a mixed session across major US indices. Market participants will be attentive to guidance, as recent trading activity suggests high sensitivity to earnings surprises. Meanwhile, the Axios report regarding Trump’s planned extension of tariffs on Canada and Mexico adds another layer of uncertainty. The implications for trade-sensitive sectors could surface as early as next week, prompting adjustments in positioning.
Shifting to forex, the change in Deutsche Bank’s outlook on the euro breaks from its previous bearish view. That alone carries weight. If institutional sentiment tilts further towards the shared currency, retracement from recent lows isn’t out of the question, especially with EURUSD already showing resilience near key levels. Meanwhile, sterling remains locked near its 100-day moving average. With little in the way of fresh catalysts from the Bank of England today, short-term traders may continue using technical levels to guide positioning.
Energy markets reacted to today’s crude oil inventory data, which showed an unexpected drawdown against expectations. Prices pulled back slightly, settling at $68.62 per barrel. The divergence between forecasts and actual figures introduces further short-term volatility risks. Long positions had already been shaken by broader macroeconomic concerns, and unless fresh demand-side indications counterbalance today’s decline, bearish pressure may persist.
In fixed income, a weaker-than-expected auction for 7-year notes suggests ongoing hesitation among buyers. The awarded rate of 4.194% came in just below market expectations, reinforcing the theme of cautious sentiment towards duration risk. Raphael’s remarks on inflation add to that hesitancy. While he acknowledged progress, the persistence of high price levels means the Fed remains wary. That, in turn, feeds into rate expectations, keeping bond yields in focus.
Japan’s top FX official signalling no concerns over currency movements leaves room for Yen traders to focus more on technical and rate-differential factors. With the pair hovering near 149.10, momentum has been tilting lower, and unless a policy shift emerges from policymakers in Tokyo, downward excursions could continue. In contrast, GBPUSD’s intraday peak of 1.2715 reflects pockets of sterling demand. Still, sustained upward movement remains constrained by external macroeconomic pressures.
On the equities side, broad movement remained contained, largely due to limited economic releases. However, attention is set to shift towards Nvidia’s numbers shortly. Positioning ahead of the announcement suggests traders are anticipating volatility, particularly given the broader pullback in crypto markets, with Bitcoin slipping to its weakest level since November. Tech-heavy portfolios will need to be mindful of further risk shifts should any misalignment with expectations emerge.
Taken together, financial markets are responding in a measured yet reactive manner to today’s developments. Liquidity remains well-distributed across asset classes, though certain sectors are moving with more conviction. That balance may soon tilt, depending on upcoming corporate releases, shifting central bank rhetoric, and fresh economic figures in the days ahead.
