10-Year Treasury Yield
10-year Treasury yield rises back above 4% as U.S.-Israel strikes fail to spark safe-haven buying. U.S. Treasury yields moved higher on Monday even after the U.S. and Israel launched attacks on Iran over the weekend as investors failed to use the U.S. bond market as a safe haven. The benchmark 10-year Treasury yield rose 8 basis points to 4.044%. The 30-year Treasury bond added more than 5 basis points to yield 4.688%.
The situation is not expected to defuse for weeks, which is driving investors into the safe-haven U.S. Dollar. During situations like this, global investors also tend to seek protection in U.S. Treasuries, but this has been the case with the U.S. 10-year Treasury note yields edging higher in early trading.
PMI Mfg Index
Economic activity in the manufacturing sector expanded in February for the second straight month but only the third time in 40 months, say the nation's supply executives in the latest ISM® Manufacturing PMI® Report. The report was issued today by Susan Spence, MBA, Chair of the Institute for Supply Management® (ISM®) Manufacturing Business Survey Committee. "The Manufacturing PMI® registered 52.4 percent in February, a 0.2-percentage point decrease compared to the reading of 52.6 in January. The overall economy continued in expansion for the 16th month
ISM Mfg Index
Activity in the United States' manufacturing sector expanded in February, albeit at a slower pace than the previous month, the Institute for Supply Management (ISM) said in its report published on Monday. The Manufacturing Purchasing Managers' Index (PMI) dipped from the previous month's 52.6% to 52.4%, expanding for the second month in a row. Meanwhile, the Employment Index rose by 0.7 percentage points compared to January to 48.8%. The Production Index went down by 2.4 percentage points to 53.5%.
US Dollar Index
US Dollar Index (DXY) rallies as Middle East conflict fuels safe-haven demand and oil price surge. The U.S. Dollar is trading higher against a basket of major currencies on Monday, driven by a jump in energy prices and increased safe-haven demand as investors react to escalating Middle East tensions. The dollar surged on the weekly chart following U.S. and Israeli bombing strikes inside Iran, with the situation intensifying throughout the weekend as Iran claimed to have hit at least three U.S. and British oil tankers.
Crypto World Bitcoin
A war between the US and Israel against Iran and its proxies is bullish for Bitcoin’s price, according to analysts at the London Crypto Club.The analysts suggested two distinct scenarios stemming from the joint strikes on Iran on Saturday that killed Supreme Leader Ali Khamenei and unleashed waves of retaliation against the Islamic Republic’s Gulf neighbours. The optimistic forecasts come as Bitcoin trades 47% below its October peak of $126,000 while assets like gold and stocks have blazed new all-time highs.
MBA Mortgage Applications
Weekly mortgage demand surged 11% higher last week, as rates sat near 4-year low. Mortgage rates hovered around a four-year low last week, prompting more borrowers to refinance and more potential homebuyers to get off the fence. Total mortgage application volume rose 11% from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. Applications to refinance a home loan, which are most sensitive to weekly rate moves, jumped 14.3% from the previous week and were 109% higher than the same week one year ago.
ADP Employment Report
Private companies added 63,000 jobs in February, January revised to just 11,000 additions, ADP says. Companies added 63,000 workers in February, an improvement from the downwardly revised 11,000 in January and better than the consensus estimate for 48,000. Most of the hiring came in just two sectors: health services and construction. Job growth in other sectors either was flat or lower. Pay grew 4.5% for those staying in their jobs while wage gains for job switchers moved down to 6.3%, the smallest gap since ADP began tracking the metric.
EIA Crude Oil Report
Global traders are starting to price in the impact of a prolonged war with the possibility of the closing of the Strait of Hormuz, potentially shutting down up to 25 percent of world oil production. With the death of Iran’s Supreme Leader Ali Khamenei, the fight to take control of the government is intense and could be contributing to the fury of Iran’s counter-attack on area U.S. naval bases and surrounding Arab neighbors. Whatever leadership is left to call the shots may feel the end is near and could start blasting all the missiles they have, further threatening oil supply in the area. Strait of Hormuz closure fears threaten 25% of global oil supply, lifting crude and the greenback. U.S. crude oil on Friday posted its biggest weekly gain in futures trading history, as the escalating war in the Middle East has triggered a major disruption to global fuel supplies.
Beige Book
Fed's Beige Book paints mixed picture of economy as hiring remains flat and tariffs raise costs. US economic growth was lukewarm across the country in February as hiring remained flat and tariffs increased costs for businesses, according to the Federal Reserve’s Beige Book released on Wednesday. Seven of the Fed’s districts saw modest growth increases, while five districts saw flat to declining growth, the Fed's summary of national and regional economic activity stated. While consumer spending increased slightly, many districts noted that uncertainty and price sensitivity dampened sales, as lower-income consumers pulled back on spending. Severe winter storms also contributed to slower retail traffic.
Hedging Gold
Wall Street divided on gold’s near-term direction as Iran conflict rages, Main Street sentiment settles back down as markets await key inflation and growth metrics Gold struggles to hold safe-haven bid but geopolitical uncertainty continues to support prices.
Jobless Initial Claims
The number of Americans filing new applications for unemployment benefits was unchanged last week and layoffs dropped sharply in February, consistent with stable labor market conditions.
Prductivity and Costs
US labor market holding steady; worker productivity still strong in Q4. Data from the Labor Department on Thursday showed worker productivity slowed in the fourth quarter, the trend remained strong, helping to curb growth in labor costs in 2025. Labor market stability. Worker productivity slows to a 2.8% rate in fourth quarter.
Import and Export Prices
A report released by the Labor Department on Thursday showed import prices in the U.S. increased by slightly more than expected in the month of January. The Labor Department said import prices rose by 0.2 percent in January, matching an upwardly revised uptick in December. Economists had expected import prices to inch up by 0.1 percent. The report also said export prices climbed by 0.6 percent in January, which also matched an upwardly revised increase in December. Economists had expected export prices to rise by 0.2 percent.
Fed Balance Sheet
The Fed's balance sheet is currently $6.6 trillion (as of March 4), as measured by total assets. This is down $2.3 trillion or 26% from the record high of $9.0 trillion during April 2022. Both figures are well above the pre-COVID peak of $4.5 trillion.
Copper
The copper mining sector is entering a renewed cycle of mergers and acquisitions as major producers seek to secure long term supply amid widening global deficits. Global Copper Market Tightens as Demand Rises and Supply Constraints Persist, Argentine Report Finds.
Mortgage Rates
Last week, the average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances, $832,750 or less, was unchanged from the previous week at 6.09%, with points decreasing to 0.52 from 0.53, including the origination fee, for loans with a 20% down payment. That rate is the lowest since 2022. Last year that rate was 64 basis points higher.
Non Farm Payrolls
U.S. payrolls unexpectedly fell by 92,000 in February; unemployment rate rises to 4.4%. Nonfarm payrolls in February fell by 92,000, compared with the estimate for 50,000 and below the downwardly revised January total of 126,000. It was the third time in five months that the economy lost jobs. Health care, the primary growth driver in payrolls, saw a loss of 28,000, due largely to a strike at Kaiser Permanente that sidelined more than 30,000 workers in Hawaii and California.Wages rose more than expected. Average hourly earnings increased 0.4% for the month and 3.8% from a year ago, both 0.1 percentage point above forecast.
Unemployment Rate
The unemployment rate edged higher to 4.4% as jobs declined across key areas. A broader measure of unemployment that includes discouraged workers and those holding part-time positions for economic reasons moved lower, to 7.9% or 0.2 percentage point below the January level. Inflation had been moderating, but a recent spike in gas prices following the fighting in the Middle East has raised questions about another jump.
Retail Sales
A report released by the Commerce Department on Friday showed a modest decrease by retail sales in the U.S. in the month of January. The Commerce Department said retail sales slipped by 0.2 percent in January after coming in unchanged in December. Economists had expected retail sales to fall by 0.4 percent. The dip by retail sales partly reflected a decrease in sales by motor vehicles and parts dealers, which slid by 0.9 percent in January after edging down by 0.2 percent in December.
Business Inventories
The Commerce Department released a report on Friday showing business inventories in the U.S. crept slightly higher in the month of December The report said business inventories inched up by 0.1 percent in December after coming in unchanged in November. Economists had expected business inventories to remain flat. The modest increase in business inventories came as wholesale inventories rose by 0.2 percent, while manufacturing and retail inventories both edged up by 0.1 percent.
Consumer Credit
In a notable development for the U.S. economy, the latest consumer credit data has revealed a significant slowdown in growth. The actual increase in consumer credit was reported at $8.05 billion, falling short of the anticipated forecast of $12.40 billion. This underperformance may raise concerns about consumer spending and confidence, key drivers of the U.S. economy. U.S. consumer credit increased by $8.05 billion in January, falling short of the expected $12 billion. According to Jin10, the previous month's figure was revised from $24.045 billion to $25.2 billion. This slowdown in credit growth may indicate a cautious approach by consumers amid economic uncertainties. The revised data suggests a more significant expansion in December than initially reported, highlighting fluctuations in consumer borrowing patterns.
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Geopolitical Risks
The rising conflict between Iran, the US, and Israel has prompted a wave of uncertainty that is affecting risk assets.This volatility reflects a mix of geopolitical fear and active liquidations in the derivatives market. |
