Headline consumer price growth in the Eurozone in February likely remained well beneath the level preferred at the European Central Bank, which is largely expected to leave interest rates at current levels this year and perhaps beyond, according to observers.

The bank’s next rate decision is on March 19.

An economists’ poll predicted that the annual Eurozone headline inflation rate in February held at 1.7%, well short of the ECB’s target of 2.0% over the medium term.

The less-volatile core rate was set to remain at 2.2% y/y, observers said.

“Flash HICP inflation is expected to have edged higher in February, driven by pass-through from the rebound in oil to petrol prices, but core inflation is expected to hold steady,” ABN Amro wrote. (LiveSquawk – Continue Reading)

It’s a big day for oil markets with all eyes on US-Iran nuclear talks, which are scheduled for later today. A constructive resolution would likely prompt the market to gradually unwind as much as a $10/bbl risk premium, which we believe is currently priced in. If talks break down, the upside risk remains, but the market may hold off on a full reaction until the scale of potential US action against Iran becomes clearer.

Targeted and brief strikes that avoid energy infrastructure (like those seen last year) with limited retaliation from Iran, would likely provide a brief spike higher in oil prices. The move, though, would likely be short-lived. Longer-term action from the US, with more aggressive retaliation from Iran, would increase supply risks for the oil market. This would make any further price increases more sustainable. (ING – Continue Reading)

Paramount Skydance Corp. finally clinched its deal for Warner Bros. Discovery Inc., outmanoeuvring its rival Netflix Inc. after a months-long battle by agreeing to pay $111 billion for the legendary Hollywood studio.

The victory for Paramount Chief Executive Officer David Ellison was hard won, requiring multiple bids over more than five months, visits to Washington, meetings with shareholders and President Donald Trump and the personal backing of his billionaire father Larry Ellison. (Bloomberg – Continue Reading)

The discussion of non-traditional or “alternative” economic or financial data has increased in recent years, especially after the longest government shutdown last year that disrupted its data collection. Many of the alternative datasets are from the private sector as advances in technology have made it easier for organizations to access the data, which may offer more depth and a higher frequency of reporting relative to some government data.

Whether it is a pandemic, government shutdown, or a normal economic environment, the Federal Reserve, market participants, and various private and public organizations having access to multiple data sets may offer more insight to economic analysis for decision-making and help to complement government data. (CME – Continue Reading)

UBS’ top equity strategist dialed back his view on U.S. stocks, citing mounting risks from a weakening dollar, stretched valuations and policy turbulence in Washington.

Andrew Garthwaite, head of global equity strategy at the investment bank, downgraded American equities to “benchmark” in a fully invested global equity portfolio, arguing that the factors that powered years of outperformance are starting to fade.

The dollar risk is a central concern, Garthwaite wrote. UBS forecasts the euro climbing to $1.22 by the end of the first quarter and sees “asymmetric structural downside risks” to the greenback. Historically, when the dollar’s trade-weighted index falls 10%, U.S. equities underperform by roughly 4% in unhedged terms, according to the bank. (CNBC – Continue Reading)

Financial markets recently reached two milestones. On January 26, gold hit $5,000 an ounce for the first time, and eleven days later, the Dow Jones Industrial Average cracked 50,000. Bullion got to its mark first – and that wasn’t supposed to happen.

Imagine if a prediction market in December 2020 had offered a proposition bet on which historic breakthrough would happen first. At that point, the Dow was already 61% of the way toward its big round number, while gold was just 37% of the way there. (Reuters – Continue Reading)