Leading financial and environmental intermediary
Contact UsAFS Markets Blog: afternoon 03/02/2026
AFS afternoon commentary
.jpg)
- Meanwhile in markets, equities are back, baby, hitting fresh all-time highs. The TACO trade reigns supreme, with the geopolitical chaos of late-January in the rear mirror for now;
- The Stoxx 50 rose half a percent to a fresh record this morning, while S&P 500 futures – up half a percent – sit just a whisker from theirs. It’s a global sweep: the FTSE 100, Nikkei, and IBEX are all currently at historic peaks;
- While on the topic of equities, we want to highlight Raiffeisen Bank International, which is up fifteen percent in 2026. The stock has effectively become our premier peace gauge for the Russia-Ukraine conflict, due to RBI’s heavy exposure to Russian assets;
- The latest optimism comes ahead of tomorrow’s trilateral talks between the US, Ukraine, and Russia. Besides that, the FT also reported that Ukraine has agreed to a framework for security guarantees, under which European forces would respond within 24 hours to any skirmish, with US support following within 72 hours if fighting persists. Whether this is acceptable to Russia is unclear;
- Over in the US, a deal is expected to end the partial government shutdown today, but it’s too late to save the week's data dump. Today’s job openings data and Friday’s US labor market report are set to be delayed. Since the ECB is set to deliver a yawn-inducing hold on Thursday, we want to highlight the less covered Bank of England decision that same day;
- The Old Lady is set to hold rates, but the underlying narrative is far less comfortable than that of the ECB. The UK is currently grappling with both inflation remaining stubbornly above target – core inflation at 3.2% in December – and a weakening labor market. The friction in the economy can be found back in the Monetary Policy Committee. We’ve seen back-to-back 5-4 decisions – a hold in November followed by a pivot to cut in December – leaving BOE Governor Andrew Bailey as the tie breaker;
- Thursday’s MPC meeting should – finally – be a relatively straightforward hold, though we expect some dissent in favor of a cut. After December’s move, the Committee has breathing room to let inflation cool. For the March meeting, SONIA futures price just 4bps of easing, which we think underprices the risk of further cuts at that meeting. Any further cooling in inflation data or labor market cracks could quickly turn this quiet pause into a renewed dove-versus-hawk showdown;
- Shifting to broader market commentary, Bund and UST yields are up by one basis point across their curves. The demise of gold and silver was also greatly exaggerated, with the recent swings reminiscent of meme stock moves. Gold trades at $4,900 a troy ounce, which is up 10 percent from yesterday’s lows, but still a little over 10 percent below last week highs;
- Touching on FX, EURUSD is trading at 1.17, down almost three cents from last week Tuesday’s highs. The yen continues to weaken after PM Takaichi’s comment that a weak yen isn’t all that bad. USDJPY trades at 155.8, the highest since reports that the BOJ and Fed were conducting price checks – ahead of a potential FX intervention – were released two weeks ago;
- Looking ahead, with no US job openings data release, today’s calendar is light and limited to Fed-speak. Tomorrow brings more substance, including the US ISM Services and additional Eurozone CPI releases. Besides that, the National Bank of Poland is expected to cut rates at their decision.
