Market Commentary: Wednesday 19th February

We are still seeing gold, the S&P, and the Nasdaq at all-time highs, with caution around increasing trade tensions and geopolitical uncertainty keeping markets in a bit of a holding pattern.

There is momentum in China following DeepSeek's breakthrough, with $1.3 trillion of value added to Chinese onshore and offshore equity markets in the last month as investors increasingly view China as a vital part of the AI ecosystem.

The U.S. and Russia met yesterday for a first round of talks over the Ukraine war, which were broadly positive, and Marco Rubio assured that Russian sanctions will remain in place until a deal to end the conflict is reached.

Regarding trade, Trump has signalled April 2nd as the date for new tariffs on automobile, semiconductor, and pharmaceutical imports, suggesting these will be at least 25% as he attempts to encourage companies to relocate to the U.S. to avoid tariffs.

This morning, UK CPI came in slightly hotter than expected, but prices still fell month-over-month (-0.1% vs. -0.3%), and year-over-year Core CPI met expectations. The spike higher in GBP/USD was brief, and we are now trading at the same levels as before the announcement.

Later this evening, FOMC meeting minutes will be released, with investors looking for clues on the interest rate path.

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