EXECUTIVE SUMMARY
- JOHNSON SCORES MAJOR WIN W/BUDGET VOTE, CHALLENGING NEGOTIATIONS AHEAD
- ZELENSKYY TO VISIT WHITE HOUSE AFTER MINERALS DEAL AGREED
- COPPER SURGES IN US AS TRUMP LAUNCHES PROBE INTO IMPORTS
- TOP FINANCE MINISTERS SNUB G20 AS GLOBAL CO-OPERATION COMES UNDER STRAIN
Figure 1: Copper futures surge over 3% as Trump considers possible import tariffs
Source: MNI/Bloomberg
NEWS
US (MNI): Johnson Scores Major Win w/Budget Vote, Challenging Negotiations Ahead
House Speaker Mike Johnson (R-LA) scored a major win yesterday, with the House voting 215-213 to pass a budget resolution that will underpin a mammoth reconciliation bill covering the bulk of President Donald Trump’s agenda. A flurry of last-minute talks, including direct calls between Trump and GOP holdouts, was enough to overcome opposition from a disparate group of moderates and deficit hawks. Rep Thomas Massie (R-KY) was the only GOP 'no' on the final roll call. The blueprint provides the House Ways and Means Committee USD$4.5 trillion to write up a tax reform package, including the extension of Trump’s 2017 Tax and Jobs Cuts Act (TJCA), and new proposals such as exempting tipped earnings from federal taxation and raising the State and Local Tax (SALT) deduction cap.
US/UKRAINE (MNI): Zelenskyy to Visit White House After Minerals Deal Agreed
Widely reported overnight that President Volodymyr Zelenskyy will visit the White House on Friday 28 Feb to meet with US President Donald Trump and sign a deal with the US with regard to providing mineral access rights to US firms in Ukraine. On 25 Feb, asked on the possible visit Trump said “I hear that [Zelenskyy is] coming on Friday. Certainly it’s OK with me if he’d like to.” The meeting will be the first since a war of words between the two leaders, with Trump calling Zelenskyy a "dictator", after which Zelenskyy accused Trump of being taken in by Russian disinformation.
US/COMMODITIES (BBG): Copper Surges in US as Trump Launches Probe Into Imports
Copper futures surged after President Donald Trump ordered the US Commerce Department to examine possible imports tariffs on all forms of the metal. The move was the latest in a string of steps aimed at imposing sector-specific levies to protect US producers and remake global supply chains. Copper markets have already seen major dislocations this year as traders bet on tariffs opening a gap between prices in America and the rest of the world.
US/EUROPE (BBG): France Expects US to Provide Backup After Ukraine Ceasefire
French Finance Minister Eric Lombard said he expects the US to provide backup for European troops to help maintain peace once a ceasefire is agreed between Ukraine and Russia. The UK, France and other European countries are willing to send troops to guarantee a truce, he told Bloomberg Television in an interview in Cape Town, where he’s attending a meeting of Group of 20 finance chiefs. “If we want a ceasefire to be respected, we need a US backup,” he said on Wednesday. “I believe the Americans have agreed to do that.”
US/S.KOREA (BBG): South Korea’s Trade Minister to Meet With Lutnick Over Tariffs
South Korea’s top trade official said he’ll seek an exemption from US tariffs when he meets with Commerce Secretary Howard Lutnick in Washington this week. “I plan to discuss how we can protect our companies as much as possible from the various tariff measures the U.S. is talking about,” Ahn Duk-geun, Minister of Trade, Industry and Energy, told reporters Wednesday before departing for the US. “I will strongly emphasize the need for our industries to work together with the U.S. industrial ecosystem.”
US (BBG): US and Iraq Talk About ‘Quickly’ Resuming Key Oil Pipeline
The US and Iraq discussed the resumption a major pipeline that can transport oil from the Middle Eastern country to global markets, after the link was shut almost two years ago following regional cost disputes. US Secretary of State Marco Rubio and Iraqi Prime Minister Mohammed Shia Al-Sudani “agreed on the need for Iraq” to quickly reopen the conduit, according to a Feb. 25 statement on the Department of State’s website.
GLOBAL (FT): Top Finance Ministers Snub G20 as Global Co-operation Comes Under Strain
Finance ministers from many of the world’s largest economies are poised to skip G20 meetings in South Africa this week, underscoring the declining relevance of the body at a time when global co-operation is faltering. Among the countries that are not expected to send their finance ministers to Cape Town are India, China, Brazil and Mexico, according to people familiar with the organisation of the meetings.
ISRAEL/MIDDLE EAST (WSJ): A Decimated Hamas Prepares for a New Fight With Israel
Hamas is regrouping its military forces for a potential return to fighting with Israel in Gaza, as mediators work to salvage the cease-fire that expires this weekend in the strip. The militant group’s armed wing has appointed new commanders and begun mapping out where to position fighters in the event of a return to war, according to Arab officials who talk with Hamas. The U.S.-designated terrorist group also has started repairing its underground tunnel network and has passed out leaflets to inexperienced new fighters on how to use weapons to mount a guerrilla war against Israel, these officials said.
GERMANY (MNI): Party Faction Meetings Continue as Pressure Mounts for Swift Gov't Deal
Debate continues in Germany regarding the speed at which the presumptive new gov't should look to either reform the debt brake, or alternatively set up a separate 'special fund' to pay for a significant increase in defence spending. In the immediate term, parties continue to deal with the fallout of the federal election by organising their new leadership teams.
CHINA (BBG): Xi Urges Officials to Stay Calm as US Raises Pressure on China
Chinese President Xi Jinping called on officials to stay composed in the face of domestic and global challenges, signaling Beijing will take a measured approach to the Trump administration’s new trade and investment restrictions. China “must enhance its political capabilities and calmly respond to challenges brought about by changes in the domestic and international situation,” Xi told top officials including Politburo and State Council party members, according to a Xinhua News Agency report on Wednesday.
CHINA (BBG): China Plans Bank Capital Injections of at Least $55 Billion
China plans to start re-capitalizing several of its biggest banks in coming months, according to people familiar with the matter, following through on a broad stimulus package unveiled last year to shore up the struggling economy. Authorities are looking to inject at least 400 billion yuan ($55 billion) of fresh capital into the first batch of banks that include Agricultural Bank of China Ltd. and Bank of Communications Co., said the people, asking not to be identified discussing private information.
DATA
GERMANY DATA (MNI): Consumer Confidence Falls to Lowest Value Since April
- GERMANY GFK CONSUMER CLIMATE MAR -24.7
The German GfK consumer climate fell to -24.7 according to the March advance reading, down from a revised -22.6 in February (previously -22.4) in its weakest print since April 2024. The print gives another blow to the narrative of a potential German "consumption-driven recovery" en vogue a while ago, but which seems like a distant memory now. Private consumption rose 0.1% Q/Q in Q4 according to yesterday's final GDP figures - but the increase was so small that its contribution to overall real Q4 GDP growth rounded down to 0.0pp.
SPAIN DATA (MNI): Highest PPI Y/Y Since Feb'23 as Energy Dominates
- SPAIN JAN PPI 0.4% M/M, 2.6% Y/Y
Spain January PPI rose to 2.6% Y/Y from 2.3% in December - the highest level since February 2023. This is the fourth consecutive monthly increase. On a sequential basis producer prices rose a non-seasonally adjusted 0.4% M/M after 0.9% M/M in December and 0.2% M/M in Jan 2024. Energy was the main driver of the acceleration, at 8.6% Y/Y (from 7.9% in Dec) for its highest reading since December 2022. Recall energy HICP rose sharply in January to 7.8% Y/Y (from 5.5% in December) and 6.1% M/M (from
1.1% prior). Intermediate goods rose a marginal 0.2% Y/Y, though this is notable given it is the first positive Y/Y print since March 2023.
FRANCE FEB CONSUMER SENTIMENT 93 (MNI)
AUSTRALIA DATA (MNI): Aussie Monthly Trimmed Mean CPI at 2.8% Y/Y
Underlying inflation rose 10 basis points to 2.8% y/y over January, while headline inflation remained flat at 2.5%, 10bp better than expected, data from the Australian Bureau of Statistics showed Wednesday. “The CPI excluding volatile items and holiday travel measure rose 2.9% in the 12 months to January, compared to a 2.7% rise in the 12 months to December,” noted Michelle Marquardt, head of prices statistics at the ABS. The Reserve Bank of Australia cut the cash rate 25bp to 4.10% last week following better than expected Q4 trimmed mean inflation.
FOREX: USD Holds APAC Demand, CAD Left Isolated
- The greenback trades stronger headed into the NY crossover, holding the bulk of a phase of dollar demand through the Asia-Pac session - although European trade so far has been considerably more subdued. EURUSD highs over the past two sessions at 1.0525 and 1.0528 have fallen just shy of key resistance, building the significance of 1.0533, the Jan 27 high and an important reversal trigger.
- In contrast with the general stability in G10 FX through the open, USD/CAD remains well within range of the overnight highs, keeping the pair on track to post four consecutive sessions of gains and five consecutive sessions of higher lows.
- The significantly calmer MXN market shows it's Canada that markets see as the risk here - with Sheinbaum's frequent public commentary and several meetings between ministers clearly soothing any tensions and showing through in currency risk premia. Resistance to watch remains 1.4380, the Feb 10 high. A move above this hurdle would highlight an early reversal signal and would be a key consideration on prolonged uncertainty.
- US New Home Sales data is the scheduled data highlight Wednesday, with appearances from Fed's Barkin & Bostic and BoE's Dhingra - ahead of a slew of appearances for the RBA, as Hauser, Jones and McPhee all testify in front of lawmakers. The G20 finance ministers meeting is set to kick off in South Africa, at which Trump's approach to both global military security and global trade is the key focus. Any signs of discord here are unlikely to be received well by the White House - meaning any communique will draw market attention.
EGBS: Bund Futures Strengthen Alongside European Equities; Spreads Tighten
Major EGB futures have strengthened this morning with no obvious catalyst. A renewed fall in natural gas futures (-4% today) will have helped limit retracements over the last 90 minutes, even in the presence of modest 15-year Bund supply.
- Bund futures are +24 ticks at 132.72, through the Feb 21 high of 132.60. Recent gains still appear corrective for now, but clearance of key near-term resistance at 132.97 (Feb 13 high) would signal a reversal. Support is seen at the Feb 19 low (131.96).
- The German curve has bull flattened, with 30-year yields down 2.5bps.
- Today ‘s 15-year Bund auction passed smoothly.
- European equity futures are also higher, facilitating a tightening of 10-year EGB spreads to Bunds. The BTP/Bund spread is 1bp narrower at 111.5bps, after mechanically widening on the back of a BBG benchmark BTP roll earlier this week.
- Regional focus remains on tomorrow’s data calendar. Which includes Spanish flash February inflation.
GILTS: Off Highs After Futures Pierce Initial Resistance
Gilts are off highs after rallying alongside wider core global FI markets during the European morning.
- The uptick gained momentum as gilt and Bund futures broke through their respective Tuesday highs, although there was no clear headline catalyst driving the rally.
- M5 futures pierced initial resistance at the Feb 13 high (93.39), with the contract topping out at 93.51 before fading back to 93.35.
- Fresh extension higher would target the Feb 6 high & bull trigger (93.83). A break there would reignite bullish momentum.
- Yields 1.5-3.0bp lower, curve flatter.
- The 10-Year UK/German yield spread is close to its ’25 closing low (203.8bp), with a post-election increase in odds of near-term German fiscal support driving spread tightening week-to-date.
- GBP STIR pricing little changed on the day, with 57bp of cuts showing through year-end.
- ~20bp of cuts priced through May, with the next full 25bp move discounted through the end of the June MPC.
- Little of note on the UK data calendar today,
- BoE dove Dhingra will speak on “Trade fragmentation and monetary policy” from 16:30 GMT, don’t expect a change in tone after she reaffirmed her dovish stance earlier in the week (pushing back against the idea of gradual cuts given her view on consumption).
BoE Meeting | SONIA BoE-Dated OIS (%) | Difference vs. Current Effective SONIA Rate (bp) |
Mar-25 | 4.447 | -0.8 |
May-25 | 4.254 | -20.0 |
Jun-25 | 4.187 | -26.8 |
Aug-25 | 4.046 | -40.9 |
Sep-25 | 3.993 | -46.1 |
Nov-25 | 3.910 | -54.5 |
Dec-25 | 3.882 | -57.3 |
EQUITIES: Recent Weakness in Eurostoxx 50 Futures Considered Corrective
The trend needle in the Eurostoxx 50 futures contract continues to point north and short-term weakness is considered corrective. Note too that moving average studies are in a bull-mode set-up, highlighting a dominant uptrend and positive market sentiment. Sights are on 5574.57 next, a Fibonacci projection. Initial firm support to watch is 5393.82, the 20-day EMA. A clear break of the EMA would signal scope for a deeper retracement. The move down this week in S&P E-Minis. appears corrective, however, price has breached support at 6014.00, the Feb 10 low. This exposed a key support at 5935.50, the Feb 3 low, that was pierced yesterday, a clear break would allow for a deeper retracement. MA studies remain in a bull-mode condition that suggests the trend direction remains up. A resumption of gains would refocus attention on key resistance at 6178.75, the Dec 6 ‘24 high.
- Japan's NIKKEI closed lower by 95.42 pts or -0.25% at 38142.37 and the TOPIX ended 8.3 pts lower or -0.3% at 2716.4.
- Elsewhere, in China the SHANGHAI closed higher by 34.174 pts or +1.02% at 3380.214 and the HANG SENG ended 753.91 pts higher or +3.27% at 23787.93.
- Across Europe, Germany's DAX trades higher by 254.11 pts or +1.13% at 22669.35, FTSE 100 higher by 55.89 pts or +0.64% at 8730.86, CAC 40 up 77.96 pts or +0.97% at 8126.81 and Euro Stoxx 50 up 54.89 pts or +1.01% at 5502.5.
- Dow Jones mini up 100 pts or +0.23% at 43803, S&P 500 mini up 27.5 pts or +0.46% at 5999.25, NASDAQ mini up 155.5 pts or +0.74% at 21313.25.
Time: 09:50 GMT
COMMODITIES: Tuesday's Sell-Off in WTI Futures Reinforces Bearish Conditions
A bearish theme in WTI futures remains intact and Tuesday’s sell-off reinforces current conditions. The move lower has resulted in a clear breach of support at $70.20, the Feb 6 low. This confirms a resumption of the downtrend that started on Jan 15 and paves the way for an extension towards $67.75, the Dec 20 ‘24 low. Key short-term resistance has been defined at $74.06, Feb 3 high. Despite Tuesday’s pullback, a bull cycle in Gold remains in play. Recent fresh cycle highs once again confirm a resumption of the uptrend and maintain the bullish price sequence of higher highs and higher lows. Moving average studies are in a bull mode position too, highlighting a dominant uptrend and positive market sentiment. Sights are on the $2962.2, a Fibonacci projection. The first key support to watch is $2879.0, the 20-day EMA.
- WTI Crude up $0.3 or +0.44% at $69.24
- Natural Gas down $0.02 or -0.46% at $4.137
- Gold spot down $0.68 or -0.02% at $2913.89
- Copper up $17.3 or +3.82% at $470.75
- Silver up $0.05 or +0.15% at $31.7699
- Platinum up $3.9 or +0.4% at $974.32
Time: 09:50 GMT
| Date | GMT/Local | Impact | Country | Event |
| 26/02/2025 | 1200/0700 | ** |  US | MBA Weekly Applications Index |
| 26/02/2025 | - |  EU | ECB's Lagarde and Cipollone in G20 FMs and CB Governors meeting | |
| 26/02/2025 | 1330/0830 | * |  CA | Capital and repair expenditure survey |
| 26/02/2025 | 1330/0830 | US | Richmond Fed's Tom Barkin | |
| 26/02/2025 | 1500/1000 | *** | US | New Home Sales |
| 26/02/2025 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 26/02/2025 | 1630/1630 |  GB | BOE's Dhingra lecture on Trade fragmentation and monetary policy | |
| 26/02/2025 | 1630/1130 | ** | US | US Treasury Auction Result for 2 Year Floating Rate Note |
| 26/02/2025 | 1700/1200 | US | Atlanta Fed's Raphael Bostic | |
| 26/02/2025 | 1800/1300 | ** | US | US Treasury Auction Result for 7 Year Note |
| 27/02/2025 | 0030/1130 | * |  AU | Private New Capex and Expected Expenditure |
| 27/02/2025 | 0745/0845 | ** |  FR | PPI |
| 27/02/2025 | 0800/0900 | ** |  SE | Economic Tendency Indicator |
| 27/02/2025 | 0800/0900 | *** |  ES | HICP (p) |
| 27/02/2025 | 0800/0900 | *** |  CH | GDP |
| 27/02/2025 | 0900/1000 | ** | EU | M3 |
| 27/02/2025 | 0900/1000 | ** |  IT | ISTAT Consumer Confidence |
| 27/02/2025 | 0900/1000 | ** | IT | ISTAT Business Confidence |
| 27/02/2025 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 27/02/2025 | 1000/1100 | * | EU | Consumer Confidence, Industrial Sentiment |
| 27/02/2025 | 1230/1330 | EU | Publication of MonPol Meeting Account | |
| 27/02/2025 | 1330/0830 | * | CA | Current account |
| 27/02/2025 | 1330/0830 | * | CA | Payroll employment |
| 27/02/2025 | 1330/0830 | *** | US | Jobless Claims |
| 27/02/2025 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 27/02/2025 | 1330/0830 | ** | US | Durable Goods New Orders |
| 27/02/2025 | 1330/0830 | *** | US | GDP |
| 27/02/2025 | 1415/0915 | US | Kansas City Fed's Jeff Schmid | |
| 27/02/2025 | 1500/1000 | ** | US | NAR Pending Home Sales |
| 27/02/2025 | 1500/1000 | US | Fed Governor Michael Barr | |
| 27/02/2025 | 1530/1030 | ** | US | Natural Gas Stocks |
| 27/02/2025 | 1600/1100 | ** | US | Kansas City Fed Manufacturing Index |
| 27/02/2025 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 27/02/2025 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 27/02/2025 | 1645/1145 | US | Fed Governor Michelle Bowman | |
| 27/02/2025 | 1815/1315 | US | Cleveland Fed's Beth Hammack | |
| 27/02/2025 | 2015/1515 | US | Philly Fed's Pat Harker | |
| 28/02/2025 | 2330/0830 | ** |  JP | Tokyo CPI |
| 28/02/2025 | 2350/0850 | ** | JP | Industrial Production |
| 28/02/2025 | 2350/0850 | * | JP | Retail Sales (p) |