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The major US stock indices are trading back into negative territory after giving up earlier gains. The S&P index traded above its record high closing level at 6118.71 reaching a high of 6125.39, but has since rotated and currently trades down -1 point or -0.02% at 6113.50.

The NASDAQ index is trading down -14 points or -0.07% at 20,112.23. It high price extended to 20110.11.

The Dow up 30 is trading down -148 points or -0.34% at 44396. Traders eyes 44602.02.

Shares of Meta (traded as high as $737, but as rotated sharply lower and currently trades at $718.75 down -$18. The shares of matter have risen for 20 consecutive days.

Intel shares are up 8.86% at $25.69. There were tops over the weekend that Broadcom and Taiwan Semiconductor were interested in different parts of the Intel business at the request of the Trump administration. TSMC shares are down -0.90%. Broadcom shares are down -2.99%

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

• Prior month 47
• NAHB housing market index 42 versus 47 estimate
• Current single-family home sales 46 versus 50 in January (revised from 51)
• Index of prospective buyers 29 versus revised 32 in January (was previously 33)
• Sales expectations in the next six months plunged -13 points to 46

The latest HMI survey also revealed that

• 26% of builders cut home prices in February, down from 30% in January and the lowest share since May 2024.
• The average price reduction was 5% in February, the same rate as the previous month.
• The use of sales incentives was 59% in February, down from 61% in January.

Regionally indices were lower led by a sharp fall in the Northeast. The West index is at its lowest level going back to at least January 2024. The prior below was 37 in May, July, and August 2024:

• Northeast 48 versus 65 last month
• Midwest 43 versus 44 last month
• South 42 versus 47 last month
• West 35 versus 42 last month

Weakness in housing is starting to gather a little more momentum. Treasury Secretary Bessent said last week that the Trump administration is focused on bringing down the 10 year treasury yield. That yield is instrumental in the setting of the mortgage rates.

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

Not surprising, Ukraine’s president Zelenskiy is saying:

• Negotiations with Russia should not happen behind our backs.

He also said:

• He had constructive talks with Turkish Pres Erdogan
• Turkey and Europe should be involved in discussions regarding ending the war.
• Cancels trip to Saudi Arabia following US, Russia talks. UPDATE: The meeting is now scheduled for March 10
• There is no decision to end the war without Ukraine

The Ukraine president was due to visit Saudi Arabia on Wednesday. A meeting at Diriyah Palace in Riyadh underscored Crown Prince Mohammed bin Salman’s efforts to position Saudi Arabia as a key diplomatic player.

Saudi state media framed the talks as initiated by the prince, who has maintained close ties with Russia throughout its war on Ukraine.

Saudi Arabia also played a role in prisoner negotiations and hosted Ukrainian President Zelenskyy for an Arab League summit in 2023. Zelenskyy is expected to visit the kingdom later this week.

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

ECBs Cipollone:

• Policy rates remain our primary instrument for adjusting the monetary policy stance
• We should also consider the role played by quantitative tightening in influencing overall financial and financing conditions.
• We should ensure that our rate decisions adequately compensate for the tightening induced by the reduction of our balance sheet.

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

• Talks with US were useful.
• Have agreed to point invoice as soon as possible
• Agree to remove barriers for diplomatic missions
• Agreed to form process for Ukraine conflict settlement.
• Also agree to create conditions to restore cooperation in full.
• There was also higher interest to live barriers for economic cooperation
• We showed bilateral commitment to find a solution

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

• Prior month 1.9%
• CPI MoM 0.1% versus 0.1% estimate. Prior month -0.4%
• Core CPI MoM 0.4% versus -0.3% last month
• CPI YoY 1.9% versus 1.9% estimate
• Core CPI YoY 2.1% versus 1.8% last month
• CPI Median YoY 2.7% versus 2.5% estimate. Last month 2.6% revised from 2.4%
• CPI Trim 2.7% versus 2.6%. Last month 2.5%
• CPI Commopn 2.2% versus 2.0% last month

In January, rising energy prices, particularly gasoline and natural gas, drove inflation higher, though this was partially offset by price declines due to the GST/HST tax break. Food prices fell 0.6% year-over-year, the first annual decline since 2017, led by a record 5.1% drop in restaurant food prices.

Energy prices rise:

Energy prices rose 5.3% year-over-year in January, accelerating from 1.0% in December, driven by higher gasoline and natural gas prices. Gasoline prices increased 8.6% YoY, up from 3.5% in December, with Manitoba (+25.9%) seeing the sharpest rise due to the partial reintroduction of its provincial gas tax. Natural gas prices rose 4.8% YoY in January, rebounding from a 5.5% decline in December, with the largest monthly increase in British Columbia (+12.8%).

The money markets are now pricing:

• 8 bps of cut for next meeting vs 11 bps before the announcement
• For the end of year, the markets are pricing 41 bps of cutsvs 45 before the release

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

• Prior was -12.6

Business activity edged higher in New York State in February, according
to firms responding to the Empire State Manufacturing Survey. The
headline general business conditions index climbed eighteen points to
5.7.

New orders and shipments grew moderately. Delivery times were
slightly longer, and supply availability was slightly lower. Inventories
continued to expand modestly.

Employment levels moved lower. Input
prices increased at the fastest pace in nearly two years, and selling
price increases also ticked up noticeably. Though firms expect
conditions to improve over the next six months, optimism about the
outlook dropped significantly.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Will point teams to reestablish the functionality of their missions in DC and Moscow.
• Work remains, today’s meeting is the first step of a long and difficult journey
• everyone involved in Ukraine conflict has to be okay with solution to end it
• No one is being side-lined here
• EU needs to be involved at some point

Meanwhile US national security advisor Waltz is saying:

• There needs to be a permanent and to Ukraine war
• there will be talked about territory and security guarantees
• Trump is determined to move very quickly
• No data has been set for Trump/Putin meeting

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

• Kremlin’s Aide Ushakov: Russia – US negotiations went well – IFA

• ECB’s Holzmann: Services and Core inflation are concerns
• Germany February ZEW survey current conditions -88.5 vs -90.0 expected
• BOE’s Bailey: We are in a period of heightened uncertainty
• Don’t expect any breakthroughs from US-Russia talks today
• US-Russia talks get underway in Riyadh
• France January final HICP +1.8% vs +1.8% y/y prelim
• What are the main events for today?
• BOJ governor Ueda: We are aware of views we had not been clear enough on policy guidance
• UK December ILO unemployment rate 4.4% vs 4.5% expected
• Russia dubs Trump as a problem solver ahead of peace talks in Riyadh
• RBA governor Bullock: We still think policy is in restrictive territory
• RBA’s Bullock: If we thought we needed to raise rates further previously, we would’ve
• RBA governor Bullock: We cannot declare victory on inflation yet
• FX option expiries for 18 February 10am New York cut

It’s been a relatively calm session with limited newsflow and data release. The main highlight was the UK Employment report and the US-Russia talks in Saudi Arabia.

The UK data beat expectations across the board keeping the BoE in an uncomfortable position amid strong wage growth and high inflation.

The US-Russia talks have ended in a meeting that lasted 4.5 hours. It’s been reported that the talks have went well. It was also reported that the Trump-Putin meeting that was expected for next week won’t take place but the conditions for the meeting were discussed.

The focus now switches to the Canadian CPI report. The Canadian CPI
Y/Y is expected at 1.9% vs. 1.8% prior, while the M/M reading is seen at 0.1%
vs. -0.4% prior. The Trimmed-Mean CPI Y/Y is expected at 2.6% vs. 2.5% prior,
while the Median CPI Y/Y is seen at 2.5% vs. 2.4% prior.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Russia – US negotiations went well.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Services and Core inflation are concerns.
• Rate cuts can’t replace economic strategy.
• March rate decision to depend on data.
• Harder to cut rates as we approach neutral.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

• Prior -90.4
• Outlook 26.0 vs 20.0 expected
• Prior 10.3

That’s the best reading since October with the outlook reading also improving to its highest since July. It points to some optimism to start the year in the German economy. However, it is still premature to say that this will be where things will recover strongly from hereon.

This article was written by Justin Low at www.forexlive.com.