Macro View - February 18, 2026 (EOD)

 ## Macro Summary Today's trading was influenced heavily by a combination of geopolitical tensions and economic data releases, particularly relating to inflation and interest rates. The ongoing discussions surrounding US-Iran relations have created a backdrop of uncertainty, impacting oil prices and influencing investor sentiment across sectors. As investors seek safe havens, gold prices have steadied, reflecting a cautious approach amidst volatile market conditions. Additionally, the release of key economic indicators, including housing starts and manufacturing output, revealed a mixed economic picture. While housing starts rose to a five-month high, indicating some resilience in the housing market, manufacturing output showed signs of slowing growth. This dichotomy has led to a cautious tone in the markets, with investors weighing the potential for future Federal Reserve actions against the backdrop of these mixed economic signals. ## Economic Data Reaction - **Housing Starts:** 1.45M vs. 1.40M expected - Positive market reaction. - **Manufacturing Output:** 0.2% vs. 0.3% expected - Negative market reaction. ## Fed & Central Banks Recent comments from Federal Reserve officials indicate a divided sentiment regarding interest rate policy. While some members express the need for a pause in rate hikes to assess the impacts of previous increases, others highlight ongoing inflationary pressures that may necessitate further tightening. The release of Fed minutes has added to this uncertainty, with traders now closely monitoring future economic data for clues on the Fed's next move. ## Rates & Bonds - 10-Year yield: 3.84% (+0.05%) - 2-Year yield: 4.21% (+0.02%) The yield curve remains inverted, reflecting market expectations of a potential recession as short-term rates continue to exceed long-term rates. This inversion signals investor caution, as they weigh the risk of stagflation against the need for sustained economic growth. ## Currency & Dollar The US dollar experienced modest strength today amid geopolitical tensions and ongoing economic uncertainty. The dollar index rose by 0.4%, driven by safe-haven demand. This strength in the dollar impacted commodity prices, particularly in precious metals, as a stronger dollar typically pressures commodity markets. ## Commodities Wrap - Oil: Closed at $70.50 (+2.5%) - Concerns over US-Iran tensions buoyed prices. - Gold: Closed at $1,950 (+0.2%) - Steadying after recent volatility. The rise in oil prices is attributed to geopolitical uncertainties, while gold's modest increase reflects its status as a safe haven amidst market volatility. ## Global Markets Close - Europe: The STOXX 600 was up 0.5%, driven by gains in energy and materials sectors as oil prices surged. - Asia: Markets are set to open positively, tracking Wall Street's gains, with a focus on tech stocks amid ongoing AI developments. ## Tomorrow's Macro Focus Key economic data releases will include the Producer Price Index (PPI) and initial jobless claims, which will provide further insights into inflation and labor market conditions. Additionally, continued focus on Fed commentary will shape market expectations as investors prepare for potential policy shifts. Geopolitical developments, particularly regarding US-Iran talks, will also remain a critical factor in market sentiment.