GGMA Morning Brief: Nvidia beats earnings expectations, BOJ hawk urges further hikes, NZ inflation threat?, Today: Fed & ECB speak, US jobless claims
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Good morning,
I hope all is well.
Here are the main overnight news and market movers:
Markets: Nvidia beats earnings expectations, Asian stocks continue to outperform
Global equity futures edged lower in early European hours as Nvidia’s earnings beat failed to sustain after-hours gains, underscoring fragile sentiment around the AI trade. The chipmaker guided Q1 revenue of $76.4–79.6B above the $72.8B consensus, yet shares pared initial gains to just +0.2% in extended trading. Asian markets diverged sharply: Japan’s Nikkei 225 surged to an all-time high above 59,000, but pared some of the gains later, while South Korea’s KOSPI rallied 3.5% to a fresh record, but Hong Kong’s Hang Seng slipped 0.7%.
The yen strengthened 0.3% after BoJ board hawk Takata renewed calls for further rate increases, while gold climbed 0.6% toward $5,200/oz on dollar weakness and safe-haven demand amid tariff uncertainty. The offshore yuan reached its strongest level in nearly three years versus the dollar after China signalled tolerance for a managed appreciation via the daily fix. The People's Bank of China set the yuan's daily reference rate at 6.9228 per dollar on Thursday, strengthening it for a second session, according to Bloomberg.
The oil price has only changed a little this morning. Yesterday, the EIA weekly petroleum report showed US commercial crude stockpiles surged by approximately 16 million barrels for the week ending February 20, the largest build in months, pushing inventories to 435.8 million barrels.15 The outsized build reflects a snap-back in production following winter storm freeze-offs rather than a demand collapse.
BOJ hawk urges further hikes after Takaichi names doves
The Bank of Japan’s most hawkish board member, Hajime Takata, renewed his call for raising the benchmark interest rate a day after Prime Minister Sanae Takaichi signalled her desire for the continuation of loose monetary policy. “I believe the bank should make a further gear shift, and engage in communication that assumes that the price stability target is almost achieved,” Takata said Thursday. The Bank of Japan is expected to keep policy on hold at a March 18-19 policy board meeting, despite Takata's proposal for a further policy shift. (BBG – Continue Reading)
In an interview with the Yomiuri Shimbun, Bank of Japan Governor Kazuo Ueda stressed that interest rates would continue to rise in response to improvements in economic activity and prices. He expressed his intention to examine the "impact of the rate hikes we conducted last December and earlier". Specifically, the Bank identified whether financial institutions were not taking a hard line in lending money to firms and individuals, and whether firms' willingness to invest in business fixed investment had declined. In addition, the Bank would gather information that a rise in mortgage interest rates might not have a negative impact on private consumption in the future. Regarding the current situation, Mr Ueda explained, "At the moment, I do not judge that there is very negative information." “We will hold a policy meeting in March and April, so we would like to reach a decision by scrutinising data available by then,” Ueda said, addressing growing market speculation that a hike could come as early as April.
Fed’s Musalem: Monetary policy is appropriately balancing risks
St. Louis Federal Reserve President Albert Musalem on Wednesday said he feels the current setting of the U.S. policy rate appropriately balances the current economic risks, even as his baseline outlook calls for inflation to head back down toward 2% later this year and for the labour market to stabilise. "If there were an increase in layoffs with low job creation, you could have a risk of the labour market deteriorating further; it’s not my base case, but I think it could happen," Musalem said. "On the inflation side, there is a possibility that inflation could stay higher than we would all like it to be for longer ... these two risks in my assessment are roughly balanced right now." (RTRS)
Iran, US resume nuclear negotiations as war clock ticks down
On the eve of a third round of nuclear talks between the United States and Iran on Thursday in Geneva, where Tehran is expected to deliver a new proposal, much of the world is holding its breath to see if the massive military force President Donald Trump has assembled in the Middle East is a threat designed to bring the Iranians to heel or a promise to attack if negotiations don’t immediately produce a deal to his liking. “I don’t think a final decision has been made yet,” said Sen. Mark R. Warner (D-Virginia), one of a small group of senior congressional leaders briefed on the president’s plans just hours before Trump delivered the annual State of the Union speech Tuesday evening before a joint session of lawmakers. (WP – Continue Reading)
New Zealand pricing, wage expectations pose inflation threat
NZ business confidence eased slightly to 59 in February but remains strong. The key tension is rising inflation pressure — cost expectations hit a 2½-year high, wage expectations jumped to 3.01%, and inflation expectations rose to 2.93%, all running counter to RBNZ forecasts. Agriculture is buoyant on dairy price gains, while construction cooled sharply. Credit conditions tightened notably after the recent rise in interest rates. ANZ says they're keeping an open mind on whether inflation will behave as the RBNZ expects.“ The survey continues to show inflation pressures rising,” said ANZ New Zealand Chief Economist Sharon Zollner. “The increase in wage pressures looks very modest thus far, but the level of pricing intentions is not consistent with widespread expectations that headline inflation will trend lower this year.” (BBG)
Bank of Korea holds rates steady, lifts growth forecast
South Korea’s central bank kept its policy rate on hold for a sixth straight meeting and raised its growth and inflation forecasts for this year. Policymakers last cut rates in May 2025. Strong demand for Korean chip exports has since reduced the economy’s need for support. The central bank is also concerned that lower rates could weaken the won and raise the risk of excessive household debt. (WSJ – Continue Reading) The BOK simultaneously also introduced a new Fed-style dot plot system, publishing each board member’s median projection of the base rate six months hence. (CNBC)
Today’s Macro Roadmap: Fed & ECB speak, US jobless claims
The RBA Bulletin will be released today — watch for any updated commentary on the investment outlook given the RBA’s recent hawkish turn (rate hike to 3.85% in February on inflation persistence).
US initial jobless claims are expected to edge higher to 215k from 206k the prior week. Analysts note the series had risen since mid-January, likely due to Winter Storm Fern and subsequent inclement weather, before the latest print reversed that rise. The prior reading — which covered the February payroll survey week — was lower than the corresponding week in 2025, “a positive message for the next employment report.” Continuing claims have been inching up after declining through mid-January, but the four-week average has moved sideways at recent lows.
Good luck today, and feel free to ping me in the chat to discuss markets and views!
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