Many Data Releases and a Chinese Warning about U.S. Treasury Exposures and the Dollar – Currency Thoughts
Many Data Releases and a Chinese Warning about U.S. Treasury Exposures and the Dollar
February 10, 2026
U.S. retail sales, import prices and the employment cost index get released within the hour followed tomorrow by January labor market figures tomorrow and consumer prices data on Friday. Meanwhile, many economic statistics from other countries were reported earlier today, with a particular emphasis on consumer price inflation and industrial production.
A second area of interest in today’s financial news concerns a warning from Chinese officials to the banks to be especially careful about avoiding excessive exposures to the dollar and U.S. Treasuries. This admonition is not an isolated event. This week’s cover story in The Economist covers The Dangerous Dollar with a subtitle opining that “holders of American assets must get used to a weaker and more volatile currency.” The dollar is coming off a difficult year, and the possibility continues that some countries — Japan and Switzerland, for instance — stand ready to sell their currencies against the dollar to counter market forces.
Just prior to the aforementioned U.S. data releases, the dollar was trading 0.4% below yesterday’s close against the yen but had advanced 0.2% relative to the euro and sterling. Swissy was unchanged. U.S. stock futures were also flat, but Japan’s Nikkei advanced another 2.3% this Tuesday in continuing response to the historic landslide election win by the ruling LDP and Prime Minister’s announced plans to halt the 8% sales tax rate on food for two years. Ten-year sovereign debt yields were down on the day by five basis points in Japan, three bps in the United States and two bps in Germany, Great Britain, France, Italy and Spain. Prices for Bitcoin, gold, silver, and oil were each in the red.
U.S. retail sales flat-lined unexpectedly in December, depressing their 12-month rate of increase to a 15.-month low of 2.4% from 3.3% in both October and November. Up to now, there had been a dichotomy between depressed consumer confidence readings and the resilience of personal consumption. In today’s other U.S. data reports, the quarterly employment cost index registered a marginally slower year-on-year increase of 3.4% last quarter versus 3.5% in the third quarter, 3.6% in in the first half of 2024, 3.8% in the final quarter of 2024, 4.2% in 4Q 2023 and a peak of 5.1% in 4Q 2022. Import prices rose only 0.1% in December and were unchanged from a year earlier, but export prices climbed 0.3%, which resulted in a higher-than-expected 3.1% year-on-year advance. Finally, the NFIB-compiled monthly index of small business sentiment ticked 0.2 points lower in January to a 2-month low of 99.3. The index’s high point in 2025 was touched in January at 102.8 and followed the cyclical crest of 105.1 in December 2024 right after the reelection of President Trump. His deregulatory agenda had appealed to small firms, but the tariff hikes and uncertainties have been a big disappointment.
Brazilian consumer price inflation rose 0.2 percentage points to a 2-month high of 4.44% last month. Such had imploded from 12.1% in April 2022 to 3.16% in mid-2023 but was as high as 5.5% last April.
Norwegian CPI inflation, which peaked in 2022 at 7.5%, accelerated unexpectedly from 3.2% in December to a 4-month high of 3.6% in January. There was also a 0.3 percentage point increase of core inflation to 3.4%.
A 0.8% rate of Danish consumer price inflation last month was its lowest in 21 months and down from a peak of 10.2% in October 2022.
After being invaded by Russian for forces early in 2022, Ukraine’s rate of CPI inflation spiked to 26.6% by the end of that year. Such then see-sawed down to 3.3% by the spring of 2024 only to leap back to 15.9% last May. A reading of 7.4% last month was down from 8.0% in December and its lowest point in a year and a half.
Moldovan consumer price inflation crested in 2022 at 34.6% but was also down to an 18-month low last month as such declined two full percentage points to 4.8% from 6.8% in December.
Having peaked at 38.0% in September 2023, Egyptian CPI inflation fell to a 14-month low of 11.9% last month.
December industrial production data released today included year-on-year changes of 4.2% in Sweden, 3.9% in Greece, 2.0% in Finland, -2.1% in Turkey, -2.4% in Austria, -4.1% in Slovenia, -6.7% in Bulgaria and -8.5% in Slovakia.
British same-store sales recorded their largest 12-month increase in five months (+2.3%) in January.
Ireland’s construction purchasing managers index rose 0.2 points to a 7-month high of 48.6 in January.
The January NAB-compiled indices of Australian business confidence (+3) and business conditions (+7) respectively represent a 3-month high and a 2-month low.
Singaporean real GDP expanded 5.0% last year, down from 5.3% in 2024.
Copyright 2025, Larry Greenberg. All rights reserved.
Tags: Brazilian CPI, U.S. import prices and small business sentiment, U.S. retail sales and employment cost index
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