11.02.26 - US macro: mixed data

Retail sales disappointed yesterday, reinforcing concerns that the US consumer is finally starting to feel the pressure from high interest rates and sticky inflation.

Today’s January employment report, delayed by the partial government shutdown, surprised on the upside:

• Non-farm payrolls: +130k (vs. +70k expected)

• Unemployment rate: down to 4.3% from 4.4%

Markets:

• Equities: mixed without clear trend

• Currencies: USD stabilized after recent decline while the strength of Swiss franc took a pause

• Bonds: US yields dropped sharply with negative retail sails to 4.15%% - while Japanese yields moved higher again, close to 2.3%

• Commodities: Silver, gold continue to rise

• Cryptos: broadly drop with Bitcoin down to USD 66k

My View: This combination underlines the current macro dilemma: economic momentum is slowing in parts of the economy, while the labor market remains relatively resilient. For markets, this is an uncomfortable mix – not weak enough to justify rapid rate cuts, but no longer strong enough to support aggressive risk-taking.

In such an environment, markets tend to swing quickly between optimism and risk aversion – driven more by headlines and short-term data surprises than by a clear, stable trend. This increases the probability of false breakouts and short-lived rallies.

Therefore, I continue to favor a defensive and selective positioning.

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