Macro View - February 02, 2026 (EOD)

 ## Macro Summary Today’s trading was heavily influenced by macroeconomic factors, particularly the ongoing volatility in commodities markets and the impact of geopolitical developments. Concerns over a potential escalation in U.S.-Iran tensions led to a significant drop in oil prices, which fell over 4% amid easing supply shock fears. This drop in oil prices contributed to broader market unease, as investors reassessed their positions in commodities and related equities. Additionally, the announcement of Kevin Warsh as the nominee for the Federal Reserve Chair sparked a notable rebound in the dollar, which had implications for equities across the board. The combination of a stronger dollar and declining commodity prices resulted in mixed sentiment among investors. While some sectors, particularly technology, showed resilience, others, such as materials and energy, faced downward pressure. The fluctuations in gold and silver prices, which have seen dramatic sell-offs recently, further compounded the uncertainty in the market, leading to cautious trading ahead of key earnings reports and economic data slated for release soon. ## Economic Data Reaction - **U.S. Manufacturing Activity:** January's data indicated expansion in manufacturing, contributing positively to investor sentiment. Market reaction was muted as traders remain focused on geopolitical risks and upcoming Fed developments. ## Fed & Central Banks Kevin Warsh's nomination as the next Fed Chair has introduced a degree of uncertainty in the markets, as some investors fear potential policy shifts that could lead to a more hawkish stance. Warsh's previous views on monetary policy suggest he may advocate for smaller Fed holdings, which could alter the current trajectory of interest rates. His confirmation process will be closely watched, as market participants assess the implications for future monetary policy. ## Rates & Bonds - 10-Year yield: 3.58% (+0.02%) - 2-Year yield: 4.40% (+0.04%) - The yield curve remains inverted, a sign of potential economic slowdown as investors favor short-term bonds amid uncertainty regarding long-term growth prospects. ## Currency & Dollar The U.S. dollar strengthened significantly today, largely due to the market's reaction to Warsh's nomination. The dollar's rebound has made exports more expensive, which could pressure multinational companies. In contrast, the stronger dollar has adversely affected commodities priced in dollars, contributing to lower gold and silver prices. ## Commodities Wrap - Oil: Closed at $74.90, down 4.5% on concerns over U.S.-Iran tensions easing. - Gold: Closed at $1,855, down 5% after a significant sell-off. - Silver: Fell sharply, closing at $23.50, reflecting broader commodity market weakness. ## Global Markets Close - Europe: Stocks closed lower across most indices, with the DAX down 1.00% and the FTSE 100 down 0.75%, reflecting concerns over rising interest rates and commodity price volatility. - Asia's markets are set to react negatively tonight, following the declines in European and U.S. markets, with increased caution expected as investors reassess their positions in light of ongoing geopolitical tensions. ## Tomorrow's Macro Focus Investors will be looking ahead to key economic data releases, including the U.S. jobs report, which has been delayed due to the partial government shutdown. Additionally, any further developments regarding Warsh's Senate confirmation and Fed commentary will be crucial in shaping market expectations for monetary policy moving forward.