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• Prior month -122.11 billion
• Trade deficit -$153.26B to a new record. Trump anticipated tariffs to blame as imports surged by $34.6 billion.

Details from the Census Bureau.

Advance International Trade in Goods

• Trade Deficit: $153.3 billion in January, up $31.2 billion from December.
• Exports: $172.2 billion in January, an increase of $3.3 billion from December.
• Imports: $325.4 billion in January, up $34.6 billion from December.

Looking at other advance data from the Census Bureau shows:

Advance Wholesale Inventories

• Inventory Level: $905.2 billion in January, up 0.7% from December and 1.1% from January 2024.
• Revision: November-to-December change revised from -0.5% to -0.4%.

Advance Retail Inventories

• Inventory Level: $821.3 billion in January, down 0.1% from December but up 4.9% from January 2024.
• Revision: November-to-December change revised from -0.4% to -0.5%.

This article was written by Greg Michalowski at www.forexlive.com.

Official February 2025 PMIs from China’s National Bureau of Statistics (NBS)

Manufacturing 50.2

• expected 50.0, prior 49.1

Services 50.4

• expected 50.3, prior 50.2

Composite is 51.1

• prior 50.1

I posted background to these here.

Next week we’ll get the privately surveyed Caixin PMIs

Manufacturing is due on Monday, March 3 at 0145 GMT / 2015 US Eastern time

• prior 50.1

Services due on Wednesday March 5 at 0145 GMT / 2015 US Eastern time

• prior 51

The PMIs (Purchasing Managers’ Indexes) from China’s National Bureau of Statistics (NBS) and Caixin/S&P Global differ primarily in survey scope, methodology, and focus. Here’s a breakdown of the key differences:

1. Provider and Affiliation

• NBS PMI:

  • Compiled by the National Bureau of Statistics of China, a government agency.
  • Seen as the official PMI, closely aligned with government policies and priorities.

• Caixin/S&P Global PMI:

  • Compiled by Caixin Media in collaboration with S&P Global.
  • A private-sector index, often considered more market-driven.

2. Survey Scope

• NBS PMI:

  • Focuses on large and state-owned enterprises.
  • Covers a broader range of industries, including manufacturing and non-manufacturing sectors (e.g., construction and services).
  • Reflects conditions in sectors heavily influenced by government policies and infrastructure spending.

• Caixin PMI:

  • Focuses on small to medium-sized enterprises (SMEs), particularly in the private sector.
  • Captures the performance of companies that are more exposed to market-driven forces and less influenced by state interventions.

3. Sample Size and Composition

• NBS PMI:

  • Larger sample size, with about 3,000 enterprises surveyed for the manufacturing PMI.
  • Emphasizes state-owned enterprises and larger companies, which tend to dominate traditional industries.

• Caixin PMI:

  • Smaller sample size, surveying around 500 enterprises, with a stronger focus on export-oriented and technology-driven firms.
  • Provides insights into the private sector and its responsiveness to global economic conditions.

4. Release Dates

• NBS PMI:

  • Released monthly, typically on the last day of the month.
  • Provides separate PMIs for manufacturing and non-manufacturing sectors.

• Caixin PMI:

  • Released a few days later, usually on the first business day of the following month.
  • Includes only the manufacturing PMI and services PMI, with no equivalent for non-manufacturing activities like construction.

5. Interpretation and Use

• NBS PMI:

  • Reflects the overall economic landscape, especially trends in industries influenced by government policy.
  • Analysts use it to gauge the impact of fiscal and monetary policies on the broader economy.

• Caixin PMI:

  • Viewed as a better indicator of the health of the private sector and market-driven segments of the economy.
  • Considered more sensitive to external shocks (e.g., global trade conditions).

6. Key Insights and Differences in Results

• The NBS PMI often reflects policy-driven stability, showing less volatility because it covers sectors cushioned by government support.
• The Caixin PMI can be more volatile, as SMEs are more sensitive to real-time changes in market demand, supply chain disruptions, and global economic shifts.

Why Both Matter:

• NBS PMI offers a macroeconomic view of China’s state-influenced economy.
• Caixin PMI provides a microeconomic perspective of the more market-driven and globally competitive sectors.

By analyzing both, investors and policymakers can obtain a more comprehensive picture of China’s economic health and its underlying dynamics.

This article was written by Eamonn Sheridan at www.forexlive.com.

Taking its cue from the book “It can’t get any worse?”, the US stock market is closing higher despite the Trump vs Zelenskiy brouhaha in the Oval Office.

Despite the rebound, the broader S&P and Nasdaq indices are closing lower for the 2nd consecutive week.

The final nmbers for the day are showing:

• Dow industrial average closed up 600.49 points or 1.39% at 43839.99.
• S&P closed up 92.82 points or 1.58% at 5954.39
• Nasdaq closed up 302.86. or 1.63 percent at 18847.28
• Russell 2000 closed up 23.40 points or 1.09% at 2163.06

For the trading week:

• Dow industrial average closed up 0.95%
• S&P index closed lower by -0.98%
• NASDAQ index closed lower by -3.47%
• Russell 2000 fell -1.47%

The Oval Office showdown was extraordinary and leaves a lot of questions unanswered, but assuming calmer minds prevail there can only be good news ahead… I think. The other question is how bad does relations with the EU get and what might that lead to?

Of course on Tuesday, tariffs on Mexico and Canada (and China) are expected to start. Will they be delayed? Adam speaks to it in his post HERE.

This article was written by Greg Michalowski at www.forexlive.com.

Taking its cue from the book “It can’t get any worse?”, the US stock market is closing higher despite the Trump vs Zelenskiy brouhaha in the Oval Office.

Despite the rebound, the broader S&P and Nasdaq indices are closing lower for the 2nd consecutive week.

The final nmbers for the day are showing:

• Dow industrial average closed up 600.49 points or 1.39% at 43839.99.
• S&P closed up 92.82 points or 1.58% at 5954.39
• Nasdaq closed up 302.86. or 1.63 percent at 18847.28
• Russell 2000 closed up 23.40 points or 1.09% at 2163.06

For the trading week:

• Dow industrial average closed up 0.95%
• S&P index closed lower by -0.98%
• NASDAQ index closed lower by -3.47%
• Russell 2000 fell -1.47%

The Oval Office showdown was extraordinary and leaves a lot of questions unanswered, but assuming calmer minds prevail there can only be good news ahead… I think. The other question is how bad does relations with the EU get and what might that lead to?

Of course on Tuesday, tariffs on Mexico and Canada (and China) are expected to start. Will they be delayed? Adam speaks to it in his post HERE.

This article was written by Greg Michalowski at www.forexlive.com.

• Trump: Zelensky disrespected Oval Office and he can come back when he’s ready for peace
• More from Trump to Zelenskyy: You either make a deal or we are out
• Atlanta Fed GDPNow tracker swan dives into recessionary territory
• US January PCE core +2.6% vs +2.6% expected
• US advance goods trade balance for January -$153.26 billion versus -$122.0B last month
• Canada GDP for Q4 annualized 2.6% versus 1.8% estimate
• US advance wholesale inventories +0.7% vs -0.5% exp
• Trump: This is a great agreement if war stops. Zelenskyy: I want to see what US is to do
• Goolsbee: Cautions against over-anticipating productivity impact.
• Mexico open to new tariffs on China to avoid Trump duties
• Bessent gives away the game on the Mexico/Canada tariff strategy
• Canada December FY YTD budget deficit at $21.72B vs $22.72B a year ago
• Germany February preliminary CPI +2.3% vs +2.3% y/y expected

Markets:

• Gold down $23 to $2852
• US 10-year yields down 7.7 bps to 4.21%
• WTI crude oil down 36-cents to $70.00
• S&P 500 up 1.2%
• USD leads, NZD lags

Every day is an adventure so far in 2025.

This one had it all. We started out with some economic data that highlighted a benign inflation environment as the PCE report was very close to estimates. All eyes were there but at the same time the January trade balance numbers were released and saw a huge influx of imports.

That really shouldn’t have been a surprise given tariff threats and the potential to front-run them but it wasn’t in the economist estimates and it took until the Atlanta Fed GDPNow number highlighted the impact on Q1 GDP for the market to really care. That led to a further bid in bonds and now we’ve seen the yield curve invert again and year-end pricing is for 68 bps in easing compared to 40 bps a couple weeks ago.

Despite that, the US dollar was a big winner on the day. Much of that comes down to geopolitics as Trump and Zelensky had a major falling out in the Oval Office, in public. That led to selling in the euro and some widespread confusion along with USD bids. Initially, it led to selling in stocks as well but was followed by an incredible turmaround into the close, including a 50 point rise in the S&P 500 in the final minutes of trading.

I’m inclined to think there was some month-end rebalancing there or short covering but it could have been driven by rate cut hopes/expectations. On that front, next week is a big one with non-farm payrolls coming up. Internationally, we get China’s National People’s Congress as well, which is also sure to be a big market mover.

Finally, the loonie got a boost initially from strong GDP numbers but it sold off later in a catch-down to the antipodeans. There are some real concerns about tariffs with Tuesday’s deadline a big risk. USD/CAD was last at 1.4469, finishing near the highest since Feb 3.

Have a great weekend, I’m sure March will be just as volatile as February.

This article was written by Adam Button at www.forexlive.com.

• Trump: Zelensky disrespected Oval Office and he can come back when he’s ready for peace
• More from Trump to Zelenskyy: You either make a deal or we are out
• Atlanta Fed GDPNow tracker swan dives into recessionary territory
• US January PCE core +2.6% vs +2.6% expected
• US advance goods trade balance for January -$153.26 billion versus -$122.0B last month
• Canada GDP for Q4 annualized 2.6% versus 1.8% estimate
• US advance wholesale inventories +0.7% vs -0.5% exp
• Trump: This is a great agreement if war stops. Zelenskyy: I want to see what US is to do
• Goolsbee: Cautions against over-anticipating productivity impact.
• Mexico open to new tariffs on China to avoid Trump duties
• Bessent gives away the game on the Mexico/Canada tariff strategy
• Canada December FY YTD budget deficit at $21.72B vs $22.72B a year ago
• Germany February preliminary CPI +2.3% vs +2.3% y/y expected

Markets:

• Gold down $23 to $2852
• US 10-year yields down 7.7 bps to 4.21%
• WTI crude oil down 36-cents to $70.00
• S&P 500 up 1.2%
• USD leads, NZD lags

Every day is an adventure so far in 2025.

This one had it all. We started out with some economic data that highlighted a benign inflation environment as the PCE report was very close to estimates. All eyes were there but at the same time the January trade balance numbers were released and saw a huge influx of imports.

That really shouldn’t have been a surprise given tariff threats and the potential to front-run them but it wasn’t in the economist estimates and it took until the Atlanta Fed GDPNow number highlighted the impact on Q1 GDP for the market to really care. That led to a further bid in bonds and now we’ve seen the yield curve invert again and year-end pricing is for 68 bps in easing compared to 40 bps a couple weeks ago.

Despite that, the US dollar was a big winner on the day. Much of that comes down to geopolitics as Trump and Zelensky had a major falling out in the Oval Office, in public. That led to selling in the euro and some widespread confusion along with USD bids. Initially, it led to selling in stocks as well but was followed by an incredible turmaround into the close, including a 50 point rise in the S&P 500 in the final minutes of trading.

I’m inclined to think there was some month-end rebalancing there or short covering but it could have been driven by rate cut hopes/expectations. On that front, next week is a big one with non-farm payrolls coming up. Internationally, we get China’s National People’s Congress as well, which is also sure to be a big market mover.

Finally, the loonie got a boost initially from strong GDP numbers but it sold off later in a catch-down to the antipodeans. There are some real concerns about tariffs with Tuesday’s deadline a big risk. USD/CAD was last at 1.4469, finishing near the highest since Feb 3.

Have a great weekend, I’m sure March will be just as volatile as February.

This article was written by Adam Button at www.forexlive.com.

It’s getting easier to connect the dots on the North American trade fight.

Trump has scheduled 25% tariffs on Canada and Mexico for Tuesday at midnight but the market doesn’t really think it’s going to happen. The Trump admin has repeatedly said it’s about fentanyl but that’s obviously a canard.

The question has always been: What does the US really want?

Trump himself has hinted many times it was about trade deficits but that’s a tough problem to solve. I expect him to continue to push for reopening USMCA sooner but that might not be the big ‘ask’.

Earlier, a Bloomberg ‘source’ report said Mexico was open to tariffs on China to avoid Trump duties. Now (coincidentally) Treasury Secretary Bessent is speaking with Bloomberg and saying that a proposal from Mexico on matching US tariffs on China is ‘very interesting’ and that it would “be a nice gesture” if Canada does the same.

Hint. Hint.

This is all getting pretty transparent. That all aligns with comments earlier this week from the Mexican president who sounded very dismissive of the tariff threat.

Canada is the problem though as running on anti-Trump, no-deal politics is playing very well domestically for the Liberals, who look like the might mount a comeback for the ages under Mark Carney.

It sets up an interesting week.

This article was written by Adam Button at www.forexlive.com.

I think this is a big tell on the North American front.

Bloomberg reports that Mexico is open to new tariffs on China to avoid Trump duties.

I don’t think anyone really believed this was all about fentanyl, given Trump’s words. Now we get some confirmation of that with the aim shifting towards blocking China from North America. That kind of deal could ultimately be a huge tailwind for Mexico and Canada as the US sources more goods from both.

That said, it’s very tough to get away from China as it’s so strong (and cheap) on manufacturing.

Also notable here is that the initial headlines don’t mention Canada.

I had guessed that Trump’s ask on tariffs was to reopen USMCA earlier but this also makes a lot of sense.

This article was written by Adam Button at www.forexlive.com.

The FX market closes in three hours but there will be plenty of intrigue in the 48 hours before it ramps back up. That will start with an interview that’s scheduled for 6 pm ET between Ukraine President Zelensky and Bret Baier at Fox News. The interview is touted as ‘live’ and Baier says it’s still on the schedule.

This article was written by Adam Button at www.forexlive.com.

It’s a real mess out there many fronts right now and that makes it a good time to look at the charts.

Cable has my attention with the three-candle reversal that was completed yesterday. It was further validated by today’s decline, which is 40 pips to a 10-day low of 1.2560.

The pair is trading at a session low at the moment as uncertainty ratchets up in Europe following the disaster in the Oval Office today. You have to wonder if a broader schism is unfolding across the Atlantic. The UK has tried to find middle ground but that’s always a challenge.

This article was written by Adam Button at www.forexlive.com.

I don’t know if we’ve ever seen anything like this before.

Zelensky, Trump and Vance descended into open argument in the White House. It was one of the most extraordinary things you will ever see in diplomacy (or lack thereof).

The minerals deal was left unsigned and the Ukrainians have now left the White House. The scheduled press conference is cancelled.

A fresh report from Reuters citing a senior US official says Trump will likely accelerate efforts to investigate fraud and waste in Ukraine in light of today’s meeting.

Oftentimes Trump will patch things up later but we’ve never seen anything like this before. I fear that Trump will go in front of the cameras later today and say some more disparaging things. It’s tough to see where this is headed.

For now, the euro has slumped to the lows of the day and the lowest since Feb 12.

Here was Trump’s post.

I get the sense of what he’s mainly trying to say but is he also America won’t be involved?

This article was written by Adam Button at www.forexlive.com.

What a fiasco this has turned into. Trump is out with a statement:

“We had a very meaningful meeting in the White House today. Much was learned that could never be understood without conversation under such fire and pressure. It’s amazing what comes out through emotion, and I have determined that President Zelenskyy is not ready for Peace if America is involved, because he feels our involvement gives him a big advantage in negotiations. I don’t want advantage, I want PEACE. He disrespected the United States of America in its cherished Oval Office. He can come back when he is ready for Peace.”

That’s not good.

US stocks just hit the lows of the day, though I’m not sure how much this had to do with it.

This article was written by Adam Button at www.forexlive.com.