The Big Three
Economic Dashboard
| INDICATOR | ACT | EST | PREV | VERDICT |
|---|---|---|---|---|
| Core PPI MoM (Jan) | 0.8% | 0.3% | 0.6% | ▼ Hot |
| PPI YoY (Jan) | 2.9% | 2.6% | 3.0% | ▼ Above est. |
| Chicago PMI (Feb) | 57.7 | 52.0 | 54.0 | ▲ 4-year high |
| Atlanta Fed GDPNow (Q1) | 3.0% | — | 3.1% | ● Slight trim |
| CPI YoY (Feb, flash) | 1.9% | 2.0% | 2.1% | ▲ Below target |
| HICP YoY (Feb, flash) | 2.0% | 2.1% | 2.1% | ▲ Soft |
| CPI YoY (Feb, flash) | 1.0% | 0.8% | 0.3% | ▼ Rebound |
| CPI YoY (Feb, flash) | 2.3% | 2.2% | 2.3% | ▼ Sticky |
| Unemployment Change (Feb) | +1K | +2K | +1K | ▲ Better |
| GDP Annualized QoQ (Q4) | −0.6% | 0.0% | 2.4% | ▼ Contraction |
| GDP QoQ (Q4, final) | 0.2% | 0.2% | 0.2% | ● In-line |
| GDP Quarterly YoY (Q3) | 7.8% | 7.2% | 8.2% | ▲ Beat |
| Mid-Month CPI MoM (Feb) | 0.84% | 0.60% | 0.20% | ▼ Hot |
| Housing Starts YoY (Jan) | −0.4% | −1.9% | −1.3% | ▲ Better |
| Construction Spending MoM (Dec) | 0.3% | 0.2% | −0.1% | ▲ Beat |
Europe
German inflation drops below 2%, France rebounds, Spain holds firm
German CPI fell to 1.9% YoY in February from 2.1% — below the 2.0% consensus and the ECB’s target. The HICP measure printed at 2.0%, also undershooting the 2.1% estimate. Energy prices declined 1.9% YoY while food costs rose a modest 1.1%. But core inflation excluding food and energy remained stubborn at 2.5%, keeping the ECB cautious. German unemployment was unchanged at 6.3%, with the monthly change of +1K beating the +2K estimate.
French CPI rebounded sharply to 1.0% YoY from 0.3% in January — the lowest since late 2020 — topping the 0.8% forecast. The jump was driven by a less severe decline in energy prices (-3% vs -7.6% prior) and food inflation accelerating to a two-year high of 2.1%. French GDP confirmed at 0.2% QoQ in Q4, in line with estimates. Consumer spending rose 0.5% MoM, beating the 0.4% forecast — a rare bright spot for the French consumer.
Spanish CPI held at 2.3% YoY, marginally above the 2.2% estimate, while Spanish HICP came in at 2.5% versus 2.3% expected. The Stoxx 600 ended about 0.2% higher in a mixed session, with BASF, Swiss Re, and Holcim among the European earnings reporters. The DAX was flat at 25,284 while the CAC 40 dipped 0.5%. Swiss Re surged 3.8% after reporting record profits of $4.8 billion, up 47% YoY.
Verdict
Mildly dovish. German headline inflation breaking below 2% strengthens the ECB doves’ hand, and money markets are now pricing a 70% chance of a June cut. But core inflation at 2.5% remains the sticking point — until that breaks lower, the ECB stays patient. The French CPI rebound is a one-off driven by base effects in energy, not a reversal of the disinflation trend.
United States
Scorching PPI hammers equities as Dell defies the selloff
The January PPI report was a gut-punch. Core wholesale prices surged 0.8% MoM — the hottest since July and nearly triple the 0.3% consensus — while headline PPI rose 0.5%. Services inflation was the culprit, jumping 0.8% with professional equipment wholesaling margins spiking 14.4%. Goods prices actually fell 0.3%, led by a 5.5% plunge in gasoline.
Year-over-year, core PPI accelerated to 3.6% from 3.3%, well above the 3.0% estimate. The data raises the risk that the March 13 PCE print runs hot, pushing back Fed rate-cut expectations into July at the earliest. The Fed funds rate remains at 3.50–3.75%.
Equities buckled. The Dow dropped 521 points (−1.05%) to 48,978, the S&P 500 fell 0.43% to 6,879, and the Nasdaq lost 0.92% to 22,668. February was brutal: the Nasdaq shed over 3% for its worst month since March 2025, the S&P lost nearly 1%, while the Dow eked out a 0.2% gain.
The AI trade remained under pressure — Nvidia fell another 4% extending its post-earnings slide, CoreWeave plunged 18% on disappointing guidance, and Zscaler dropped 12% on weak billings. Block surged 23% after-hours on mass layoffs of over 40% of its workforce, a sign that AI-driven efficiency cuts are accelerating across fintech.
Dell was the bright spot, soaring 22% after Q4 revenue of $33.4 billion (+39% YoY) crushed the $31.6 billion estimate. AI-optimized server revenue hit a record $9 billion, up 342% YoY, with $34.1 billion in quarterly AI orders. The FY27 guide of $138–142 billion with $50 billion in AI revenue confirmed the infrastructure thesis. Dell also announced a $10 billion buyback expansion and a 20% dividend increase.
The Chicago PMI surged to 57.7 from 54.0, crushing the 52.0 estimate and hitting a four-year high — the strongest reading since May 2022. Production, employment, and new orders all expanded sharply. Treasuries rallied hard: the 10-year yield fell below 4.0% to its lowest since November 2025, down 25 basis points for the month, as safe-haven demand overwhelmed the hot PPI signal. The Atlanta Fed GDPNow ticked down to 3.0% from 3.1%.
Verdict
Stagflationary signals, but nuance matters. The PPI print is unambiguously hawkish for the Fed — services inflation is reaccelerating and the PCE-relevant components look hot. But the bond market is voting with its feet: the 10-year below 4% says growth fears and geopolitical risk outweigh inflation concerns. Dell’s blowout proves the AI infrastructure spend is real and broadening beyond Nvidia, even as the “picks and shovels” trade rotates from GPUs to servers. The market is in a tug-of-war between inflation anxiety and AI euphoria.
Asia-Pacific
India GDP beats at 7.8%, Japan housing improves, China eyes NPC
India’s Q3 GDP came in at 7.8% YoY, comfortably beating the 7.2% estimate and moderating only slightly from Q3’s 8.2%. Full-year growth is tracking at 7.6%. The beat underscores India’s position as the fastest-growing major economy, though bank loan growth decelerated to 13.6% from 14.6% and FX reserves slipped to $723.6 billion from $725.7 billion, reflecting RBI intervention to support the rupee.
Japan’s housing starts surprised positively at −0.4% YoY versus the −1.9% estimate, a significant improvement from the prior −1.3%. Construction orders slowed sharply to 5.7% from 20.2% but the housing data suggests the residential sector is stabilizing. The Nikkei 225 closed modestly higher at 58,850 (+0.16%), as investors looked past Thursday’s Nvidia selloff and focused on the weaker yen supporting exporters.
Chinese markets closed higher — the Shanghai Composite gained 0.39% to 4,163 and the Hang Seng rose 0.95% to 26,631 — as investors positioned ahead of next week’s National People’s Congress starting March 5. The Politburo reaffirmed its commitment to proactive fiscal and moderately loose monetary policy. Coal and consumer stocks outperformed while chip stocks lagged following Nvidia’s overnight decline.
Verdict
Constructive. India’s GDP beat reinforces the structural growth story and justifies the RBI’s patient stance. Japan’s housing improvement is a tentative positive after months of weakness. All eyes on China’s NPC next week — fiscal stimulus targets and any tech sector support measures will set the tone for APAC markets into Q2.
Latin America & Africa
Brazil inflation surges, Canada contracts, Mexico trade swings to deficit
Brazil’s mid-month CPI surged 0.84% MoM in February — well above the 0.60% estimate and a dramatic acceleration from January’s 0.20%. Year-over-year, the reading eased to 4.10% from 4.50%, but the monthly acceleration validates the BCB’s hawkish tightening cycle. The budget balance posted a surplus of R$103.7 billion in January and the gross debt-to-GDP ratio held at 78.7%, below the 79.0% forecast — a rare piece of fiscal discipline.
Canada’s Q4 GDP was the shock of the day: the economy contracted 0.6% annualized, far below the flat consensus. The culprit was a massive $23.5 billion inventory drawdown as businesses sold off stockpiles built ahead of tariffs. Household spending rose 0.4% and exports grew 1.5%, suggesting underlying demand is holding. December monthly GDP recovered 0.2% but January’s advance estimate shows flat growth. Full-year 2025 growth came in at 1.7% — the slowest since the pandemic. BoC rate-cut odds for March 18 remain below 10%.
Mexico’s January trade balance swung to a $6.5 billion peso deficit against a $2.2 billion estimate, while the USD-denominated balance was −$1.25 billion. The reversal from December’s $2.4 billion surplus suggests tariff front-loading has exhausted itself. Chile’s copper production fell 3.0% YoY and manufacturing contracted 3.8%, while Colombia’s unemployment jumped to 10.9% from 8.0% — a seasonal spike but a sharp one. South Africa’s trade balance narrowed sharply to R$9.3 billion from R$22.4 billion.
Verdict
Hawkish for Brazil, dovish for Canada, cautious everywhere else. Brazil’s mid-month CPI surge justifies the BCB’s aggressive tightening and the real should hold its recent gains. Canada’s contraction is noise — inventory-driven, not demand-driven — but it leaves the economy on shaky footing as tariff uncertainty persists. Mexico’s trade reversal confirms the front-loading effect has faded, leaving CUSMA-exposed exporters vulnerable.