MPC Morning Call 20th February 2026 – Markets on edge as Trump gives Iran 10-days to strike a deal
stocks closed in the red overnight as heightened geopolitical tensions in the middle east, a hawkish fed and poor outlook from Walmart weighed on the market
WATCH ON YOUTUBE MPC Morning Call 20th February 2026 – Markets on edge as Trump gives Iran 10-days to strike a deal stocks closed in the red overnight as heightened geopolitical tensions in the middle east, a hawkish fed and poor outlook from Walmart weighed on the market The Fed’s January minutes showed officials unanimously held rates but adopted a more hawkish tone, with several members wanting “two‑sided” language that explicitly leaves the door open to future hikes if inflation stays above the 2% target. Policymakers also flagged artificial intelligence as a key source of uncertainty, split on whether it will prove net inflationary or disinflationary over time. Against this backdrop, markets are now highly focused on the upcoming PCE inflation print and Q4 GDP, as any upside or downside surprise could quickly shift expectations for the timing and extent of rate cuts this year. On the data front, the US trade deficit widened sharply to 70.3 billion dollars in December, taking the 2025 annual gap to about 901.5 billion dollars, a historically elevated level. At the same time, weekly initial jobless claims fell to 206,000, undershooting expectations and reinforcing the picture of a still‑resilient labour market that does not yet argue for urgent easing. Equity sentiment was described as cautious with a mild risk‑off bias, as investors weigh softer trade data against solid employment figures and await clarity from the PCE and GDP releases. In corporate and commodity news, Walmart posted better‑than‑expected quarterly earnings and announced a 30 billion dollar buyback, but issued conservative profit guidance for the current quarter and fiscal 2027, prompting a 1.4% pullback in the share price even as some analysts noted the company’s long history of lowball forecasts. Oil markets extended gains, with Brent around the low‑70s and WTI mid‑60s per barrel, their highest levels in over six months, as escalating US‑Iran tensions, increased military presence in the Persian Gulf, fading hopes of relief on Russian energy sanctions, and a draw in US crude inventories all stoked supply concerns. This combination of hawkish Fed messaging, mixed macro data, cautious corporate guidance, and geopolitically driven oil strength is leaving risk assets searching for direction near term. US defense officials have reportedly told President Donald Trump that a major US build-up of jets, tankers, and warships in the Middle East will leave Washington ready to launch sustained air strikes on Iran as soon as Saturday, including options ranging from targeting nuclear facilities and senior regime figures to broader command-and-control assets, though Trump has not yet decided whether to attack and continues to warn that “really bad things will happen” if no deal with Tehran is reached. Earnings: Walmart -1.4% - the retail giant delivered a quarterly top-and-bottom line beat and announced a new $30 billion share buyback but fell after the company issued current quarter and full fiscal year 2027 profit guidance that fell short of consensus estimates. Commodities, Energy & FX ASX Overnight: SPI 9003 (-0.48%) The Day Ahead: The ASX will be dominated by earnings again today. Corporate news RIO earnings – Click here to read summary NEM Earnings – Click here to read summary
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