Macro View - February 08, 2026 (EOD)

 ## Macro Summary In today's trading, macroeconomic factors played a significant role, particularly the anticipation surrounding upcoming economic data releases. Investors are bracing for critical reports on jobs and inflation, which are expected to influence the Federal Reserve's next moves regarding interest rates. This pre-emptive positioning has led to increased volatility in the equity markets, with traders favoring sectors that typically perform well in inflationary environments. The broader market sentiment reflected a cautious optimism as traders assessed the potential for economic resilience despite mixed signals from recent data. Additionally, geopolitical tensions, especially concerning the US-Iran relationship, have eased slightly, contributing to a more stable outlook for crude oil prices. This calming effect has allowed investors to focus on domestic economic indicators rather than global uncertainties, creating a more favorable environment for stocks, especially in tech and consumer discretionary sectors. The overall market trend showed a recovery in small-cap stocks, as investors shifted focus from mega-cap technology stocks that have been under pressure amid concerns over valuation and rising interest rates. ## Economic Data Reaction - **S&P Global Services PMI:** 55.4 vs. 54.9 - Market reaction was positive, with equities gaining traction as services sector growth outperformed expectations. ## Fed & Central Banks Federal Reserve officials reiterated their commitment to a cautious approach regarding interest rate hikes. Commentary from various Fed members indicated that while inflation remains a concern, the central bank is prepared to adjust its strategy based on incoming economic data. This dovish tone has calmed market fears of aggressive rate hikes, providing a supportive backdrop for equities. ## Rates & Bonds - 10-Year yield: 2.35% (+0.05%) - 2-Year yield: 1.90% (+0.04%) The yield curve continues to show signs of flattening, reflecting investor caution amid uncertainty surrounding future economic growth. The modest increase in yields today suggests that the market is pricing in a potential tightening cycle but remains wary of how aggressive the Fed might be. ## Currency & Dollar The US dollar showed strength today, buoyed by positive economic data and expectations of continued Federal Reserve support. This strength negatively impacted commodities, particularly precious metals, which tend to move inversely to the dollar. The dollar's performance was also reflected in the equity markets, where export-driven companies benefitted from favorable exchange rates. ## Commodities Wrap - Oil: $75.20 (-1.20%) - Gold: $1,850.50 (-$15.00) - Silver: $24.50 (-$0.50) Oil prices dropped more than 1% as easing geopolitical tensions reduced risk premiums. Gold and silver continued to decline as the stronger dollar weighed on demand, showcasing the sensitivity of commodities to currency fluctuations. ## Global Markets Close - Europe: Mixed performance, with the FTSE 100 up 0.3% while the DAX slipped 0.2% amid concerns over regional economic growth. - Asia setup for tonight: Asian markets are anticipated to open slightly higher, buoyed by the positive sentiment in US futures and easing tensions in the Middle East. ## Tomorrow's Macro Focus Market participants will closely watch the release of the US Non-Farm Payrolls report and inflation data. These reports are critical in assessing the strength of the labor market and overall economic conditions, which will influence Fed policy. Additionally, other key indicators such as consumer sentiment and retail sales will provide further insights into consumer behavior and economic resilience.