While today\u2019s economic calendar is uneventful, tomorrow features important data concerning the sentiment and behaviors of small and medium-size businesses, which are heavily levered to changes in domestic policy since most of their operations are onshore. The rest of the week brings crucial information on the trajectory and strength of inflation at the wholesale and consumer stages, while Friday will offer an update on the durability of spending across American households, according to retail sales data due before the market opens. Consumption numbers have been robust following the pandemic, and the pressures of elevated prices, heavy financing charges and reduced credit availability have so far been conquered by plentiful employment opportunities, robust wage growth and buoyant capital markets. Incoming publications will give us clues on whether the momentum is continuing or beginning to slowdown; however, we have seen the pot begin to cool off in some former months, only for it to heat up again. Folks, this is a strong consumer and IBKR Forecast Traders are projecting another mighty showing this week. But the solid demand is helping to support price pressures, and our marketplace believes headline and core consumer costs will arrive at annualized rates of 2.9% and 3.1% this Wednesday.<\/p>\n\n\n\n Source: ForecastEx<\/em><\/strong><\/em><\/strong><\/p>\n\n\n\n Markets are posting strong gains so far today with investors picking up financial instruments across asset classes. Tech stocks are leading the way for equities and the Nasdaq 100 benchmark is gaining the most; it\u2019s up 1.3%. The S&P 500, Dow Jones Industrial and Russell 2000 gauges are progressing more modestly, but are nonetheless advancing by 0.7%. 0.3% and 0.2%. Sectoral breadth is positive with 8 out of 11 segments in the green and led by energy, technology, and consumer discretionary, which are climbing 1.7%, 1.6% and 0.7%. In contrast, financials, healthcare and real estate are representing the laggards with drops of 0.8%, 0.3% and 0.1%. Treasurys are also getting scooped up in bull-steepening fashion, with the 2- and 10-year maturities changing hands at 4.25% and 4.48%, 4 and 2 basis points lighter on the session. The dollar is higher though, as expectations of relative economic outperformance aid the currency, which is appreciating against most of its major counterparts, including the euro, pound sterling, franc, yen, yuan and loonie. Conversely, it is depreciating relative to the Aussie tender. Commodities are also bullish overall, with copper, gold, crude oil and silver up 2.4%, 1.7%, 1.7% and 1.2%, but lumber is bucking the trend; it\u2019s slipping 1.2%. WTI is trading at $72.15 per barrel as oil traders dismiss Trump-tariff concerns and focus on fundamentals instead. Gold reached another fresh all-time high meanwhile and is getting closer to breaking the 3,000 level.<\/p>\n\n\n\n Despite the new administration being in the White House for only 21 days, investors are already tired of Trump bumps and are choosing to look at the light at the end of the tunnel. Moreover, they\u2019ve learned that much of the confrontational rhetoric may be intended to capture attention and generate fear amongst trade partners so that Washington can get its way. But two important dynamics occurring at the Treasury department are capping bond yields and offering the administration further leverage. First is Secretary Bessent\u2019s intention of keeping issuance levels steady to try and incrementally restore balance in the nation\u2019s fiscal budget. Second is the push toward public efficiency that is seeking to right-size government and limit wasteful spending on Capitol Hill. The two significant developments are contributing to lighter interest rates and offering the President increased wiggle room considering the mild inflationary risks that could be unleashed by a decelerating labor pool and higher goods prices stemming from trade tensions.<\/p>\n\n\n\n China\u2019s inflation picked up in January, but the underutilization of its manufacturing sector caused wholesale prices to dip. The country\u2019s Consumer Price Index (CPI) accelerated to 0.7% month over month (m\/m) and 0.5% year over year (y\/y) compared to the 0.8% and 0.4% rates expected by Wall Street. In December, the m\/m and y\/y readings were flat and up 0.1%. When excluding volatile prices for food and fuel, CPI sped up to 0.6% in January y\/y from 0.4% the previous month. Within the broader gauge, costs for the movie and performance tickets group, the airfare classification and the tourism category increased the most y\/y, climbing 11.0%, 8.9% and 7.0%. As with other Asian countries, price gains were supported by the Lunar New Year occurring in January rather than last year’s February celebration. Meanwhile, wholesale prices as depicted by the Producer Price Index dropped 2.3% y\/y last month, matching the analyst consensus and December\u2019s result. Manufacturers continue to struggle with the one-two punch of supply chain issues and weak demand.<\/p>\n\n\n\n After sinking 3.4% m\/m in November, the volume of building permits issued in Australia climbed 0.7% during the final month of 2024, according to the Australia Bureau of Statistics. The tally met expectations, and its increase was led by approvals for private sector dwellings excluding houses, which jumped 15.2%. Permits for individual houses fell 3%. The headline number, however, sank 1.8% y\/y.<\/p>\n\n\n\n![\"\"](\"https:\/\/www.interactivebrokers.com\/campus\/wp-content\/uploads\/sites\/2\/2025\/02\/ForecastEX-retail-sales-growth-faster-than-0.3-january-1100x259.jpg\")
<\/figure>\n\n\n\nMarkets Kick Off Week with a Rally<\/strong><\/h2>\n\n\n\n
Investors Are Already Tired of Trump Bumps<\/strong><\/h2>\n\n\n\n
International Roundup<\/strong><\/h2>\n\n\n\n
China\u2019s Inflation Strengthens<\/strong><\/h2>\n\n\n\n
Australia Building Permits Increase<\/strong><\/h2>\n\n\n\n