US data stole the show today after the ISM manufacturing survey delivered a genuine upside shock, printing at its highest level since August 2022 and completely flipping the near-term macro narrative. New orders hit the strongest reading since February 2022 and employment rebounded sharply from 44.8 to 48.1.
USD reacted accordingly, firming across the board as higher yields forced some positioning cleanup after recent USD weakness. Overall, the day felt less like a trend reversal and more like a reminder that the US economy is still capable of uncomfortable upside surprises.
*Daily move - against G10 rates as of 17:00 GMT, 02.02.26
** Indicative rates - interbank rates as of 17:00 GMT, 02.02.26
The RBA has emerged as the clear outlier among G10 central banks after delivering a 25bp rate hike and reinforcing expectations of further hikes, positioning AUD to outperform its peers. GBPAUD now at the lowest levels since December 2024, with markets now pricing in an additional 40bp worth of hikes for this year.
Across the Channel, French price growth slowed sharply, with headline inflation in January dropping to a five‑year low, surprising to the downside and holding comfortably beneath the ECB’s 2% target. Softer energy and manufactured goods prices were the key drivers, underscoring the entrenched disinflationary backdrop across the euro area.
UK grocery price inflation eased to 4% in the four weeks to 25 January, the lowest since April, as shoppers increasingly turned to own-brand products and promotions. Promotional spending jumped 10.9% year-on-year, while full-price sales rose just 1.7%, with own-label items accounting for a record share of grocery spend. The data highlight ongoing pressure on household budgets despite easing inflation, which is still running above the broader UK CPI rate.
Today's scheduled JOLTS report is being delayed due to the partial government shutdown.
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