Weekly economic commentary: Mix of economic news and data from global economies

Wells Fargo Research Team Wells Fargo

Summary

United States: Hard to get a clear view on restless waters

Amid rising uncertainty, lagging indicators show activity was stable before the tariff storm. The number of job openings was slightly higher than anticipated at the end of January, and both the CPI and PPI came in softer than expected in February. Yet, we expect a mixture of weaker hiring and stronger inflation by midyear, which would present a challenge to the FOMC. We now look for the Committee to cut 75 bps, bringing the fed funds rate target range to 3.50%-3.75% by year-end.
Next week: Retail Sales (Mon.), Industrial Production (Tue.), FOMC (Wed.)

International: Mix of economic news and data from global economies

This week saw a variety of economic developments and data releases from G10 and emerging economies. The Bank of Canada lowered its policy rate by 25 bps this week to 2.75% and provided accompanying commentary that was somewhat mixed, but overall somewhat dovish-leaning, in our view. The U.K. economy unexpectedly shrank in January, early results from the spring wage negotiations in Japan look encouraging and Norway saw an upside inflation surprise. Brazil's monthly inflation data, while not coming in as a surprise, continued to point to elevated price pressures.
Next week: China Industrial Production and Retail Sales (Mon.), Bank of Japan Policy Rate (Wed.), Brazilian Central Bank Selic Rate (Wed.)

Credit market insights: Why have mortgage rates remained elevated?

Amid high mortgage rates, purchasing and refinancing applications remain suppressed from their earlier peaks. Even with the Federal Reserve's easing cycle being under way, mortgage rates remain high with upward pressure from the 10-year Treasury and mortgage spread.

Topic of the week: Steel yourself for a section 232 revival

This week, the 25% tariffs on steel and aluminum imports announced by the Trump administration last month went into effect. All imports of certain steel articles and derivative steel articles are subject to the 25% tariffs under Section 232, essentially eliminating the carve-outs to the original Section 232 tariffs enacted during President Trump's first term (with a few changes).

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Wells Fargo Research Team

Wells Fargo

EUR/USD steadies near 1.1650 ahead of US Nonfarm Payrolls

EUR/USD holds ground after five days of losses, trading around 1.1650 during the Asian hours on Friday. Traders remain cautious ahead of the US Nonfarm Payrolls report, which is expected to offer further insight into labor market conditions and the Federal Reserve’s policy outlook. December NFP is forecast to show job gains of 60,000, down from 64,000 in November.

GBP/USD: Further weakness could challenge 1.3400

GBP/USD remains under unabated selling pressure on Thursday, slipping to fresh three-day lows around 1.3415 in response to further improvement in the sentiment surrounding the Greenback ahead of Friday’s key NFP data.

Gold defends $4,450, looks to the crucial US NFP report

Gold struggles to capitalize on the previous day's goodish move up from the vicinity of the $4,400 mark and attracts some sellers while defending $4,450 in the Asian session on Friday. The critical US employment details will offer more cues about the Fed's rate-cut path, which, in turn, will influence the US Dollar price dynamics and provide a fresh impetus to the non-yielding bullion.

Forecasts for Payrolls are all over the place

Yesterday’s data put the kybosh on the idea the Fed needs to cut rates fairly urgently to protect the labor market. The jobs component of the ISM services index was nicely over 50, and that rising JOLTS voluntary quits rate also points to no real heartache in labor.

2026 economic outlook: Clear skies but don’t unfasten your seatbelts yet

Most years fade into the background as soon as a new one starts. Not 2025: a year of epochal shifts, in which the macroeconomy was the dog that did not bark. What to expect in 2026? The shocks of 2025 will not be undone, but neither will they be repeated.

XRP slides as institutional and retail demand falters

Ripple is trading down for the third consecutive day on Thursday amid escalating volatility in the cyrptocurrency market. After peaking at $2.41 on Tuesday, its highest print since November 14 amid the early-year rally, XRP has quickly ran into aggressive profit-taking.