Market Brief, North America

The Federal Reserve’s preferred inflation measure landed in line with expectations in January, but left markets mostly unmoved, given that it predated the Iran conflict and was stale on arrival. Data released by the Bureau of Economic Analysis this morning showed the core personal consumption expenditures index rising 0.4 percent from the prior month, accelerating slightly to 3.1 percent on a year-over-year basis, matching economist estimates. The overall personal consumption expenditures index climbed 0.3 percent relative to the prior month, and was up 2.8 percent from a year ago, down slightly from December’s 2.9 percent pace. Personal income rose 0.4...

Inflation slowed in the United States last month—before the war in Iran sent oil prices spiralling higher and triggered a sharp reappraisal of the Federal Reserve’s expected policy path. According to data published by the Bureau of Labor Statistics this morning, the core consumer price index—with highly-volatile food and energy prices excluded—rose 0.2 percent in February from the prior month, decelerating slightly from January’s 0.2-percent increase, and rising 2.46 percent over the same period last year—marking a five-year low. This was in line with consensus estimates among economists polled by the major data providers ahead of the release. On a...

Foreign exchange markets are in upheaval after Iran war fears drove global crude prices nearly 30 percent higher over the weekend—but conditions could stabilise in coming hours if G7 countries tap their strategic petroleum reserves. According to the Financial Times, finance ministers from the major advanced economies are now discussing a co-ordinated release of oil reserves, with an announcement expected this morning. The dollar is giving back some of its weekend gains but—along with the Canadian dollar—is still up from its late-February levels, having climbed against its more vulnerable energy-importing rivals. Brent crude surged past $130 a barrel when markets...

Good morning. Currency markets are still struggling to navigate conflicting signals from the Middle East. Iran’s deputy foreign minister reportedly told Sky News Arabia that Tehran might be willing to surrender its enriched uranium stockpile in “return for something good”, but an empty tanker was struck off the coast of Kuwait overnight, pointing to a widening campaign against Gulf shipping. Against that backdrop, ten-year Treasury yields are rising for a fourth consecutive day, equity futures are little changed, and the dollar is edging higher. The euro, sterling and yen are all on the defensive, yet holding above key technical levels...