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Summary – February 23

LATAM
  • The Latam data calendar is light on Friday, with just Mexico Q4 current account and Chile January PPI in the docket. Elsewhere, data releases are also few and far between for the Friday session, with no Fed speakers scheduled.
  • USD – the dollar remains firmer off the Thursday lows, with the ability of US stock futures to hold the NVIDIA-triggered rally helping aid greenback sentiment. A Japanese market holiday kept Asia-Pac trade muted, but firmer front-end US yields upon the re-opening of trade has also proved USD-supportive.
  • Global News:
    • US (MNI) – the Fed can take its time as it considers when to begin cutting interest rates because the economy and employment remain robust, Fed Governor Waller said Thursday. A hotter-than-expected January CPI reading was a reminder that the path back to the Fed’s 2% inflation target will not be a straight one, he said, adding that he needs “at least another couple of months” of additional data on inflation before making a judgment as to whether disinflation is stalling.
    • US/RUSSIA – the US will sanction more than 500 people and entities linked to Russia’s war machine, in its biggest sanction package of the two-year war, according to a Treasury Department spokesperson. The actions will be announced Friday by the State and Treasury Departments, the spokesperson said, following the death of Russian opposition leader Alexey Navalny.
    • EU – ECB Governing Council member Robert Holzmann said he doesn’t see reductions in interest rates coming before the US. “If the Fed changes its policy hiking, then I assume it will have the same conditions like in Europe, because these currency areas are interrelated so this would then also mean that we have to rethink,” the hawkish Austrian official said.
    • US/CHINA – the US and China are discussing new measures to prevent a wave of emerging market sovereign defaults, according to people familiar with the situation. The talks are broadly aimed at both easing the $400bn-plus annual debt service burden for poor countries and finding an alternative to the high borrowing rates those nations now face in the market.

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