Morning Brew Ferbuary 28 2025

Good morning,

Tariffs and a lack of inspiration from Nvidia have dampened the mood ahead of key inflation data. As I mentioned yesterday, the movement in Nvidia did not cover the option premium, but if you had puts, it certainly did yesterday! The stock plummeted 8.5%, wiping out nearly $280 billion in market capitalisation. This decline dragged down the semiconductor sector and the broader market, with the Semiconductor Index losing 6%, the S&P 500 dropping 1.6%, the Nasdaq falling 2.8%, and the Dow decreasing by 0.45%.

Yields on the 10-year Treasury fell to 4.22%, while the USD Index surged above 107, reaching 107.40. EUR/USD is below 1.04, GBP/USD fell to 1.2580, and USD/JPY is at 149.99. USD/CAD jumped to 1.4440. Gold and silver dropped to 2,864 and 31.25, respectively, while Bitcoin fell below 80k.

Ole comments: Gold's overdue correction gained further momentum overnight as volatility spikes across markets forced leveraged funds to reduce exposure across the board. The November correction saw a drop of USD 253 before rallying USD 419, and so far, the setback is less than USD 100. We are looking for support at $2,813 ahead of the key $2,790 level. We view this as a healthy correction before a fresh push towards USD 3,000 and beyond.

Donald Trump announced yesterday that tariffs against Canada and Mexico of 25% will come into effect on Tuesday. Additionally, he plans to impose an extra 10% on imports from China. These tariffs are related to fentanyl and are not yet trade-related.

Today, any news regarding tariffs, the PCE Deflator, and month-end adjustments could potentially move markets. Swiss KOF, French and German CPI, and Canadian GDP are also of interest but typically have less market impact. The PCE is expected at 2.5% and the Core at 2.6%—can Trump deliver on his promise to fix inflation?

• Friday: Japan CPI, UK House Prices, CH KOF, US PCE. Earnings: Frontline.
• Monday: International PMI, EU Inflation.