Three-Dimensional Chaos
February 23, 2026
(151) Trading volume in the U.S. today will be muted by a blizzard affecting tens of millions in the Northeast corridor. Stock markets in Japan and China were shut by the Emperor’s Birthday holiday and the tail end of Lunar New Year observances, respectively.
The Middle East is on high alert of what appears to be a possible imminent attack by U.S. forces on Iran, as the nuclear deal that President Trump has been seeking remains elusive.
International trade is in a shambles following the U.S. Supreme Court ruling striking down as unconstitutional a big portion of the U.S. tariffs imposed last year. Huge sums of collected levies must be returned, but it’s unclear to whom (businesses or consumers) nor how that’s to be done. While condemning the ruling, Trump agreed to abide by the court ruling but instantly substituted other decades-old legislation to justify a 10% across-the-board tariff that he then raised to 15% a day later. There are signs that the EU and perhaps other economies that worked out trade deals with the United States will not accept this bait and switch. By the same token, with plenty of recent examples around the world of the extremes that rulers with absolute power will go when cornered, market anxiety is at a very high level especially in light of U.S. opinion polls showing the voter disapproval rating of Trump now above 60%.
Overnight movement in the dollar has been slim in its relationships with the yen (no change), euro, loonie and sterling (each +0.1%) and Swiss franc (+0.2%). Somewhat bigger gains have occurred of 0.6% versus the peso, 0.4% relative to the Australian dollar and 0.3% relative to the kiwi.
U.S. stock futures are down around 0.5% in the case of the DOW and S&P 500 and by somewhat more in the Nasdaq and Russell 2000.
The German DAX has fallen 0.5% so far as well, but the vast majority of other stock markets show gains such as 0.8-0.9% in Spain and Italy, 2.5% in reopened Hong Kong, 0.9% in New Zealand, 1.5% in Indonesia, and 0.5-0.7% in South Korea, India, Taiwan and Singapore.
Among ten-year sovereign debt yields, the U.S. and Switzerland issues show a dip of one basis basis point, Italy and Spain are up a basis point, and those in Germany, France and Great Britain remain unchanged.
Prices for silver and gold have spiked 4.9% and 1.8% higher, while Bitcoin has dropped 2.1%. Oil’s cost is little changed.
Like many Monday, data news has been light. Today’s major release so far involves the IFO Institute’s German business climate index, which improve a bit more than expected to a 6-month high of 86.7 in February. The manufacturing and construction sub-indices were less negative, and the services reading swung from -2.6 to +0.1. Perceived current conditions climbed a full point to a 19-month high, and outlook expectations rose more than anticipated as well to a 3-month low. All in all, IFO officials said the new findings indicate that “Germany’s economy is showing first signs of recovery.”
A 2.2% year-on-year drop in the combined Swiss index of producer and import prices in January was the most deflationary reading in 12 months. Domestic producer prices (-1.5%) and import prices (-3.5%) each experienced bigger on-year drops than in December.
Italian consumer price inflation in January was left unrevised from preliminary estimates of a 0.4% month rise and a 1.0% increase from January 2025, which was the smallest such rise in 15 months. Core CPI inflation printed at 1.7% for a third straight time.
Irish wholesale prices in January were 5.2% lower than a year earlier. The readings have been negative for the past year, but January’s drop was the least negative in three months.
Retail sales in New Zealand last quarter were 0.9% greater than in 3Q 2025. Sales in the second half of 2025 were 4.45% higher year-on-year. Polish retail sales in January were similarly 4.4% greater than a year earlier.
Although exceeding zero for only the second month in the last tend, the Chicago Fed National Activity index in January (0.18) fell a tad short of expectations. U.S. factory orders and the Dallas Fed monthly manufacturing survey will be reported later today.
Central banks in Israel and Jamaica are scheduled to announce their interest rate decisions later today following scheduled reviews.
Copyright 2026, Larry Greenberg. All rights reserved.
Tags: fallout following Supreme Court's tariff ruling, German business climate index, Swiss PPI and import prices
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