Market Notes

Market mood

Overall sentiment sits at -24 on our scale, which signals a cautious setup and limited appetite for risk. Expect choppy trading and quick shifts around headlines.

VIX (the volatility index, which measures how much traders expect the S&P 500 to swing over the next 30 days; below 15 is calm, above 25 is stressed) is near 25.8. This is in the stressed zone, so intraday moves can be larger than usual.

S&P 500 futures (the pre-market price for the main US stock index) are down about 0.2 percent, pointing to a softer open.

DXY (the US Dollar Index, which measures USD (United States dollar) against six major currencies; higher means a stronger dollar) is down about 0.5 percent. A weaker dollar often supports commodities and non-US equities, but it also suggests investors are slightly less defensive than earlier in the week.

The US 10-year yield (the interest rate the US government pays to borrow for 10 years; higher yields tend to pressure stocks and support the dollar) is a touch higher. Firm yields into the US data at 12:30 UTC raise the stakes for the growth and inflation releases.

Gold is down about 0.2 percent while oil is up roughly 3.5 percent. This points to geopolitics driving energy more than broad fear lifting all safety trades.

Bitcoin is down about 0.3 percent, showing limited appetite for high-volatility assets ahead of key data and headlines.

The CNN Fear and Greed Index (a composite of seven market indicators; 0 means extreme fear, 100 means extreme greed) is not updated pre-open. Treat VIX and the dollar as the cleaner guides for session tone.

Compared with the prior session, oil is stronger and the dollar is softer. Expect headline-driven swings with wider ranges than usual.

What happened in the last 24 hours

1) Shipping slows as Tehran dictates terms in the Strait of Hormuz (the narrow waterway between Iran and Oman; roughly a fifth of global oil flows through it). Fewer tankers moved even after talk of a US-Iran ceasefire. New conditions from Tehran are adding uncertainty to delivery schedules. Higher odds of supply delays are lifting oil prices and increasing volatility in energy-linked assets.

2) Cross-border fire after strikes in Lebanon. Hizbollah attacked Israel despite ceasefire talk, and the United States said it will keep military assets in the region until a broader deal. The chance of a quick de-escalation has fallen. This supports oil and keeps a floor under volatility while limiting stock market rallies.

3) Dollar pulls back on fragile ceasefire signals. The dollar slipped as immediate escalation odds dipped, but the truce looks fragile. Mixed signals are creating back-and-forth moves in currencies and interest rates. A softer dollar helps commodities and non-US stocks, but quick reversals are likely if geopolitics or US data surprise.

4) Iran weighs tolls on tankers using Hormuz. A fee would raise shipping costs and add new friction at a key chokepoint. Insurance and route planning would get more complicated, which can discourage traffic. Added costs and uncertainty support oil on dips and increase intraday swings in crude futures.

5) German industrial output fell in February. Weaker production underscores a sluggish European economy. That weighs on earnings for exporters and slightly cools inflation pressure. This can pressure the DAX (Germany’s main stock index) and support expectations for easier policy later in the year, which can weigh on the euro versus USD.

Today's calendar

Released earlier today

• 05:00 UTC. Japan Consumer Confidence. Actual 33.3 vs 38.0 forecast vs 39.7 previous. The sharp miss signals cautious households, which can slow spending; JPY (Japanese yen) and Japanese equities are sensitive, but global spillover is limited unless confidence keeps sliding.

Still ahead

• 12:00 UTC. Brazil Retail Sales MoM. Forecast 0.6 percent vs 0.4 percent previous. A beat supports local growth-sensitive stocks and BRL; a miss would cool that tone.
• 12:00 UTC. Mexico Inflation Rate YoY. Forecast 4.61 percent vs 4.02 percent previous. A hotter reading tightens financial conditions locally and can lift MXN yields; a cooler print does the opposite.
• 12:30 UTC. United States GDP Growth Rate QoQ (Gross Domestic Product, the broadest measure of economic output). Forecast 0.7 percent vs 4.4 percent previous. A big miss lower would likely pressure S&P 500 futures, push the US 10-year yield down, and weaken USD; a strong upside surprise would tend to lift yields and USD while challenging equities.
• 12:30 UTC. United States Initial Jobless Claims. Forecast 210 thousand vs 202 thousand previous. Higher claims point to softening labor demand and support government bonds; lower claims support growth, push yields up, and can weigh on large technology stocks that react to interest rates.
• 12:30 UTC. United States Jobless Claims 4-week Average. Forecast 216.0 thousand vs 207.75 thousand previous. This smooths weekly noise; a rising average signals cooling labor markets and supports bonds.
• 12:30 UTC. United States Continuing Jobless Claims. Forecast 1,840 thousand vs 1,841 thousand previous. Rising continuing claims suggest people are staying unemployed longer, which supports bonds and can weigh on consumer stocks.
• 12:30 UTC. United States Personal Income MoM. Forecast 0.3 percent vs 0.4 percent previous. Faster income growth supports spending and can be inflationary; slower growth does the opposite.
• 12:30 UTC. United States Personal Spending MoM. Forecast 0.5 percent vs 0.4 percent previous. Strong spending supports growth and earnings, lifting yields and possibly the dollar; a weak print would favor bonds and weigh on stocks tied closely to economic growth.
• 12:30 UTC. United States Core PCE Price Index MoM (the Federal Reserve’s preferred inflation measure; it strips out food and energy to show the underlying trend). Forecast 0.4 percent vs 0.4 percent previous. A hotter reading tends to push the US 10-year yield and USD higher while pressuring gold and equities; a cooler print does the opposite.
• 12:30 UTC. United States PCE Price Index MoM. Forecast 0.4 percent vs 0.3 percent previous. Confirms the inflation pulse alongside Core PCE; reaction pattern is the same.
• 12:30 UTC. United States GDP Price Index QoQ. Forecast 3.8 percent vs 3.7 percent previous. A hotter reading signals firmer inflation in GDP components, which can lift yields and the dollar.
• 12:30 UTC. United States Corporate Profits QoQ. Forecast 3.9 percent vs 4.7 percent previous. Stronger profits support equities; weaker profits make it harder for stock prices to rise faster than earnings.
• 13:00 UTC. Poland Interest Rate Decision. Forecast 3.75 percent vs 3.75 percent previous. A surprise cut would weigh on PLN and support Polish equities; a hold is the base case.
• 22:30 UTC. New Zealand Business NZ PMI (a monthly survey of manufacturing; readings above 50 mean expansion). Forecast 55.6 vs 55.0 previous. A stronger PMI supports NZD and local growth-sensitive stocks; a weaker print does the reverse.

Key concept today

Priced in. When something is priced in, the market already expects it, and asset prices have moved in advance as if it were true.

How to spot it. Before an event, watch how related assets move and how commentary frames the baseline. If most signs point the same way and prices already reflect that path, the baseline result is largely in the price.

Why it matters. Bigger moves often come from surprises. If most people expect A and A happens, there is less new information to move prices. If B happens instead, many traders must change their bets quickly, which can create a larger and faster move.

Applying it today. The Federal Reserve is widely expected to hold rates in April, so a textbook hold may not move markets much. The swing is more likely to come from a meaningful surprise in GDP or Core PCE, or from an unexpected geopolitical headline that changes oil supply risk. The same logic applies to ceasefire expectations and shipping conditions in the Strait of Hormuz.