Weekly economic & financial comentary

Wells Fargo Research Team Wells Fargo

Summary

United States: Labor Market Continues to Tread Water

The longest government shutdown on record continues to drag on. Private sector data show hiring remains weak, but layoffs remain contained. That said, the pressure to trim headcount appears to be broadening, as cost pressures continue to mount and tariff uncertainty persists.
Next week: NFIB Small Business Optimism Index (Tue.)

International: Global Policy Pause: A Week of Holds with One Exception

This week, several central banks across both G10 and emerging markets convened to assess monetary policy, with most opting to keep interest rates unchanged. The Bank of England, Riksbank, Norges Bank, Reserve Bank of Australia and Brazil’s Central Bank all held their respective policy rates steady. The only exception was Banxico, which delivered a rate cut, albeit with a hawkish tilt.
Next week: U.K. GDP (Thu.), China Industrial Production and Retail Sales (Fri.)

Topic of the Week: Supreme Court Hears Tariff Case

Wednesday’s oral arguments provided the first indication of how the U.S. Supreme Court will strike down President Trump’s tariffs under the International Emergency Economic Powers Act (IEEPA). No matter what the Court decides, the high-tariff environment is set to remain.

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Wells Fargo Research Team

Wells Fargo

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.