last week
Last week saw everything from developments in the Iran conflict, updates on tariffs, and important macro data.
- Iran conflict: Major economies agreed to release a record 400 million barrels of oil from reserves – enough to replace about 20 days’ supply from the Strait of Hormuz. Nevertheless, there is no end in sight to the conflict, with Brent oil prices ($100 per barrel) about 40% higher than pre-conflict levels.
- Tariff: US Trade Representative Greer announced an investigation of the country’s top 16 trading partners – a necessary step to eventually impose long-term tariffs to replace tariffs found illegal by the Supreme Court.
- macro: Most of the data is a bit out of date as it predates the Iran conflict. But…
- Revised Q4 real GDP growth halved to a 0.7% annual pace due to weak trade and consumer spending and a big hit from the government shutdown. Nevertheless, domestic demand remained stable at a growth rate of 1.9%.
- Real consumer spending increased by +0.1% month-on-month in January, despite the impact of the blizzard on goods spending (-0.4%).
- And we got two inflation reports: January headlines pce Inflation eased to 2.8% year-on-year (YoY) from 2.9% in February as the contribution of core commodities and energy slowed. CPI Inflation remained unchanged at 2.4% year-on-year.
One piece of data that partially captures the Iran conflict was preliminary March data from the University of Michigan for consumer sentiment, which slipped as consumers expect gas prices to rise next year.
Given the increasing pressure on inflation from higher energy prices, 10-year Treasury yields have risen nearly 10 basis points to 4.25% since March 6, although the Nasdaq-100® is flat.
this week
Here are the top events I’m watching this week:
- Today: Industrial Production (February)
- Wednesday: Fed meeting, producer price inflation (February)
- Thursday: unemployment allowance
