Guardian Weekly Market Report – Issue 206

Reports of Note Due This Week

The last full week of February features several important U.S. data releases and auctions. Factory orders kick off the week on Monday, followed by housing price indices and the Conference Board’s consumer‑confidence report on Tuesday. Mid‑week brings a slew of treasury auctions and surveys, while Thursday’s docket includes the current‑account balance, survey of employment payrolls, initial jobless claims, and a 7‑year note auction. On Friday, markets will focus on the second estimate of U.S. Q4 GDP, monthly GDP, the producer price index, and construction spending.

• Monday:
  10:00 – Factory Orders (Dec)
• Tuesday:
  9:00 – S&P/Case-Shiller Home Price Index (Dec)
  10:00 – Conference Board Consumer Confidence (Feb)
  10:00 – Richmond Fed Manufacturing Index (Feb)
• Wednesday:
  2:00 – Germany GDP (Q4 final)
  5:00 – Eurozone CPI (Jan final)
• Thursday:
  8:30 – Durable Goods Orders (Jan prelim)
  8:30 – Canada Current Account (Q4)
  8:30 – Initial Jobless Claims
• Friday:
  8:00 – Germany CPI (Feb prelim)
  8:30 – Canada GDP (Q4)
  8:30 – Producer Price Index (Jan)
  9:45 – Chicago PMI (Feb)

Geopolitics

U.S. tariff policy re-entered the spotlight this week as trade tensions flared following a major legal and political pivot. After the Supreme Court struck down tariffs imposed under emergency powers, the White House quickly replaced them with a temporary 10% global import surcharge, framing the move as necessary to address balance-of-payments risks. President Trump then signaled the rate could rise to 15%, injecting fresh uncertainty despite no formal escalation yet. The rapid shifts unsettled allies: the EU warned against further increases and delayed trade votes, while China criticized the approach as unilateral and destabilizing. Indonesia secured a partial carve-out, highlighting how trade policy is increasingly shaped through bilateral leverage rather than multilateral rules. Taken together, tariffs remain a central geopolitical instrument – less about near-term economics and more about strategic pressure – keeping global markets cautious and risk premiums elevated.

The United States and Iran made limited progress in nuclear talks in Geneva, agreeing on broad “guiding principles” but stopping short of a deal, as both sides acknowledged major gaps remain. Iran’s foreign minister said the path to an agreement had begun but warned it would take time, with draft texts to be prepared ahead of another round of negotiations. U.S. officials echoed the cautious optimism, noting unresolved issues and Iranian resistance to U.S. red lines. The talks unfolded amid a major U.S. military buildup and Iranian naval drills near the Strait of Hormuz, underscoring the risk of escalation. Washington is pressing for curbs beyond Iran’s nuclear program, while Tehran insists negotiations focus solely on nuclear limits in exchange for sanctions relief, rejecting any discussion of missiles or ending uranium enrichment entirely.

Ukrainian drones struck an industrial site in Russia’s Udmurt Republic more than 1,400 kilometers from Ukraine, injuring 11 people and damaging facilities, Russian officials said Saturday. While local authorities did not name the target, Russian Telegram channel Astra reported that the strike hit the Votkinsk Machine Building Plant, a major state-owned defense factory that produces Iskander ballistic missiles and nuclear-capable intercontinental ballistic missiles. Videos shared by residents showed smoke and damaged buildings, and other channels reported multiple explosions and the sound of drones. Ukraine has not commented on the attack.

Mexican authorities said the killing of Nemesio Rubén Oseguera Cervantes, known as “El Mencho,” leader of the Jalisco New Generation Cartel (CJNG), triggered widespread retaliatory violence across Mexico, with cartel members burning vehicles, erecting hundreds of roadblocks and effectively paralyzing parts of Jalisco, including Guadalajara and tourist hub Puerto Vallarta. Oseguera Cervantes died after being wounded during a military operation in Tapalpa, as he was flown to Mexico City, prompting coordinated unrest in roughly 20 states that led to school closures, travel disruptions and shelter-in-place warnings. The Mexican government said the operation was carried out by its forces with U.S. intelligence support, underscoring heightened bilateral cooperation amid pressure from Washington to curb fentanyl trafficking. While officials hailed the death as a major blow to organized crime, analysts and residents warned it could fuel short-term instability and power struggles within the cartel rather than end drug-related violence.