(14 FEBRUARY 2019)DAILY MARKET BRIEF 2:Investors climb the wall of worry

Markets are watching geopolitics closely, especially the China/US trade conflict. Meanwhile, the US Federal Reserve Bank has entered “wait-and-see” mode on monetary policy and will maintain as long as economic indicators stall. US headline inflation in January eased to 1.6% annually - compared to 1.9% in the previous month a forecast of 1.7% - amid a collapse in oil prices. Core inflation came in above forecast, printing at 2.2% compared to 2.1% expected. More data is coming this afternoon: publication of January’s producer prices, initial jobless claims, December’s retail sales and business inventories. On Friday come industrial production, Michigan sentiment index, Empire Manufacturing and most importantly durable goods orders for the month of December as well as purchasing manager indicators.

The US dollar bounced back at the European opening, especially against the Australian and New Zealand dollar. Over the last days, the greenback has traded with an upward bias, remaining insensitive to economic data. Trade negotiations between the US and China are still the main driver in FX.