Summary:China’s official PMI data point to persistent domestic weakness at the start of 2026, according to analysis from ING.The official manufacturing PMI fell back into contraction, reinforcing doubts that December marked a genuine turning point.Price indicators showed tentative improvement, offering some relief from deflation concerns.Private-sector PMI data painted a more constructive picture, highlighting the role of exports and private firms.Services activity also slipped into contraction, underscoring the challenge of reviving domestic demand.China’s softer-than-expected PMI readings in January suggest that domestic economic challenges have carried over into the start of 2026, even as external demand continues to provide pockets of support, according to analysis from ING Group.The official manufacturing purchasing managers’ index slipped back into contractionary territory at 49.3 in January, down from 50.1 in December and well below market expectations for a second month of expansion. The setback reinforces concerns that December’s improvement may have been temporary rather than the start of a sustained recovery. Manufacturing activity has now been in contraction for nine of the past ten months, highlighting the fragility of underlying demand conditions.ING noted that the weakness was broad-based across most sub-indices. Production remained marginally in expansion but slowed notably, while new orders fell back below the 50 threshold, erasing December’s gains. Export orders also deteriorated, pointing to softer momentum even as overseas demand remains comparatively stronger than domestic consumption. Other indicators, including employment and order backlogs, edged lower, reinforcing the picture of subdued factory activity.There were, however, some tentative positives in the price data. Measures of ex-factory prices moved into expansion for the first time in almost two years, while raw material input costs rose to their highest levels in around 20 months. ING views these developments as encouraging signs in the context of China’s long-running deflation concerns, even if they do not yet signal a broader turnaround in demand.The official PMI also highlighted a growing divergence by firm size. Large enterprises continued to outperform, remaining in expansionary territory, while small and medium-sized firms stayed under pressure—an outcome consistent with tighter financing conditions and weaker domestic demand.In contrast, private-sector survey data painted a more optimistic picture. The RatingDog manufacturing PMI edged higher in January, supported by gains in production, new orders and employment, alongside rising output prices. ING noted that this divergence reflects differences in survey coverage, with the private PMI skewed more toward export-oriented and privately owned firms, which have benefited from stronger external demand.The contrast echoes a key theme from 2025, when exports and industrial output held up relatively well while household demand and services lagged. That imbalance was also evident in the non-manufacturing PMI, which slipped back into contraction in January, hitting its weakest level in more than three years. Services indicators such as new orders softened again, underscoring the difficulty policymakers face in shifting growth toward domestic consumption.Overall, ING concludes that China’s PMI data point to stabilisation rather than recovery. Without a more durable pickup in domestic demand, the economy is likely to remain reliant on external drivers and policy support as 2026 unfolds. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Japan’s government is trying to walk back and “de-risk” Prime Minister Sanae Takaichi’s weekend remarks that were widely interpreted as being comfortable with a weak yen. And also insensitive to Japanese people grappling with higher cost of living brought on somewhat by the lower yen driving up the JPY cost of imports. A government spokesperson refused to comment on FX levels and said Takaichi was not endorsing yen weakness, but arguing for an economy resilient to currency swings.The clarification highlights a growing messaging problem: political campaigning is colliding with the finance ministry’s long-running stance that it may act against “excessive” FX moves. Markets remain sensitive because yen weakness is feeding inflation, while the Bank of Japan has openly debated the risk of being behind the curve on inflation. With the February 8 snap election approaching, inconsistent rhetoric risks adding volatility to USD/JPY and long-dated JGBs as investors reassess intervention and policy risks.Japan’s currency messaging is getting messier after new comments from a government spokesperson sought to neutralise market fallout from Prime Minister Sanae Takaichi’s weekend remarks on the yen.In brief, the spokesperson on Sunday declined to comment on specific foreign-exchange levels, while emphasising that Takaichi was not attempting to advertise the benefits of a weak yen. Instead, the spokesperson said the prime minister’s intention was to stress the goal of building a stronger domestic economy that can withstand exchange-rate fluctuations.That clarification follows Takaichi’s campaign comments a day earlier that were taken by markets as being relatively tolerant of yen weakness, an awkward tone given the government’s parallel effort to keep intervention risk credible. Reporting around the remarks highlighted the contrast between campaign rhetoric and the finance ministry’s repeated warnings that it will respond if FX moves become excessive or disorderly. The timing matters. The yen has been hovering near multi-month lows, and currency depreciation has become politically sensitive because it lifts import costs and adds to household inflation. That inflation channel is also central to the BOJ debate: the bank’s January meeting discussion leaned more hawkish, with some policymakers raising concerns about falling behind the curve if inflation risks intensify, particularly when yen weakness is amplifying price pressures. Markets have already shown they are quick to punish perceived policy slippage. Recent episodes of yen weakness and bond-market volatility have been linked to worries about fiscal loosening under Takaichi, including tax-cut talk, with some investors likening the risk to a credibility shock if policy discipline is questioned. Those dynamics make message discipline critical: if the government wants to deter one-way yen selling, it cannot appear relaxed about depreciation, even rhetorically.The spokesperson’s attempt to “reframe” Takaichi’s comments is therefore best read as damage control and a reminder that Tokyo wants to keep two options alive at once: supporting growth and reflation domestically, while preserving the ability to warn markets against disorderly FX moves.For traders, the takeaway is that the yen story is now a political story as much as a monetary one. With the February 8 election nearing, any further muddled messaging risks adding headline-driven volatility, especially if it clashes again with finance ministry guidance or BOJ hawkishness. This article was written by Eamonn Sheridan at investinglive.com.

China’s private manufacturing PMI edged higher in January, but rising costs and weak confidence point to a fragile and uneven recovery.Summary:China’s private-sector manufacturing PMI edged higher in January, signalling a second straight month of modest expansion.Output and new orders improved, with overseas demand—particularly from Southeast Asia—providing support.Employment rose slightly and backlogs eased, pointing to marginal operational improvement.Cost pressures intensified, pushing factory-gate prices higher for the first time in over a year.The private PMI contrasts with weaker official PMI data, highlighting a still-fragile and uneven recovery.China’s manufacturing sector showed tentative signs of improvement at the start of 2026, according to private-sector PMI data, though the recovery remains shallow and increasingly challenged by rising cost pressures and subdued confidence.The RatingDog China General Manufacturing PMI rose to 50.3 in January, up from 50.1 in December, remaining just above the 50 threshold that separates expansion from contraction. While the reading points to continued growth for a second month, the pace of improvement was modest and broadly consistent with a fragile recovery rather than a strong rebound.Production expanded at a slightly faster rate as manufacturers reported higher new business inflows. Demand conditions improved marginally, supported by a renewed rise in export orders following a contraction in December. Survey evidence pointed to firmer demand from Southeast Asian markets, helping to offset still-soft conditions at home. Total new orders have now expanded for several consecutive months, though growth remained limited, with some firms citing elevated prices and weak underlying market conditions as constraints.Manufacturers responded to rising workloads by increasing staffing levels for the first time in three months. Although employment gains were modest, the increase in workforce capacity, alongside efficiency improvements, helped reduce outstanding work for the first time since mid-2025. Purchasing activity also strengthened as firms replenished raw materials and semi-finished goods, leading to a second consecutive rise in input inventories. In contrast, stocks of finished goods continued to decline as companies focused on fulfilling existing orders rather than building inventories.Supply-chain conditions were broadly stable, with delivery times unchanged. However, inflationary pressures intensified. Input costs rose at their fastest pace in four months, driven largely by higher metals prices amid a broader commodities upswing. As a result, manufacturers lifted output prices for the first time since November 2024, with export charges also increasing at the quickest pace in around 18 months.Despite these improvements, business confidence weakened. Sentiment fell to a nine-month low as firms expressed concern over rising costs and uncertainty around the broader economic outlook. The softer confidence reading reinforces the message that momentum remains fragile.Crucially, the private PMI stands in contrast to official PMI data from China’s National Bureau of Statistics, which showed both manufacturing and non-manufacturing activity slipping into contraction in January. The divergence underscores the uneven nature of China’s recovery, with pockets of export-linked resilience sitting alongside weak domestic demand and cautious consumers.Taken together, the data suggest China’s manufacturing sector is stabilising rather than accelerating. Without a stronger demand recovery or more decisive policy support, rising cost pressures risk squeezing margins and limiting the durability of the upturn. This article was written by Eamonn Sheridan at investinglive.com.

Australian job ads surged in January, signalling renewed labour demand and reinforcing expectations the RBA may need to tighten policy.Summary:Australian job advertisements surged 4.4% m/m in January, snapping a six-month run of declines and marking the strongest monthly gain in four years.The rebound adds to evidence the labour market remains resilient despite higher interest rates and slowing growth elsewhere.Job ads are only modestly lower than a year ago and remain well above pre-pandemic levels.Hiring gains were concentrated in consumer-facing sectors, suggesting demand has not cooled materially.The data reinforces market expectations that the RBA may well hike tomorrow, February 3, amid sticky inflation and labour tightness.Australia’s labour market showed renewed momentum at the start of the year, with private-sector data pointing to a sharp rebound in hiring demand that underscores the economy’s resilience and complicates the near-term policy outlook for the central bank.Job advertisements rose 4.4% in January, reversing a 0.8% decline in December and ending a six-month downward streak, according to data compiled by Australia and New Zealand Banking Group and employment platform Indeed. The January increase was the strongest monthly rise in four years, signalling that employers have become more willing to add staff after a prolonged period of caution.In level terms, job ads were just 3.2% lower than a year earlier, a relatively modest pullback. Importantly, advertised job numbers remain 11.8% above pre-pandemic levels, highlighting how elevated labour demand continues to be relative to historical norms.The rebound was led by consumer-facing sectors such as retail, customer service and food services, areas that are typically sensitive to shifts in household spending. The strength in these categories suggests that demand conditions have not softened as much as policymakers might have hoped, even as higher borrowing costs squeeze real incomes.For markets, the timing of the data is critical. The strong jobs print lands just ahead of the next Reserve Bank of Australia policy decision, with investors increasingly convinced that inflation risks remain tilted to the upside. Market pricing implies roughly a three-in-four chance of a 25bp rate hike, reflecting concerns that resilient labour demand could sustain wage growth and slow the return of inflation to target.While job advertisements are not a direct measure of employment outcomes, they are widely viewed as a forward-looking indicator of labour market conditions. The January surge suggests that the expected cooling in hiring demand has been delayed, raising the risk that labour market tightness persists longer than anticipated.From a policy perspective, the data strengthens the argument for caution. Even if the RBA opts to hold rates steady in the near term, the combination of firmer inflation readings and renewed labour demand boosts the scope for hiking ahead. RBA policymakers may need to maintain a hawkish lean until clearer signs of slack emerge in the jobs market.Overall, the January job ads rebound reinforces a key theme of the Australian outlook: growth may be slowing, but the labour market remains a pillar of strength, complicating the inflation fight and keeping rate expectations elevated.-Coming up on February 3:That 0330 is GMT, which is 2230 US Eastern time. Reserve Bank of Australia Governor Bullock news conference is an hour later. This article was written by Eamonn Sheridan at investinglive.com.

Earlier:China Pres Xi revive push for yuan as reserve currency The PBOC follows a managed floating exchange rate system. Allows the yuan to fluctuate within a +/- 2% range, around a central reference rate, or "midpoint."Previous close 6.9566Injects 75bn yuan in 7 RRs @ 1.4% (net 75.5bn drain after maturities today) This article was written by Eamonn Sheridan at investinglive.com.

India’s budget-driven derivatives tax hike is seen as a near-term equity headwind, with investors also disappointed by the lack of immediate measures to stem foreign outflows.Summary:India’s budget proposal to raise taxes on equity derivatives trading is being flagged by analysts and fund managers as a near-term headwind for domestic equities, mainly via higher trading friction and potential liquidity impacts. The budget increases the securities transaction tax (STT) on equity futures to 0.05% from 0.02% and on options to 0.15% from 0.10%, lifting the cost of trading in a market where derivatives volumes are large. The same package did not include major, immediate measures to entice foreign flows, a key disappointment given ongoing foreign selling. Indian equities fell sharply on budget day, reflecting concerns about liquidity, valuation sensitivity, and a lack of foreign-investor “sweeteners.” The near-term focus is on whether the tax changes cool activity and whether domestic flows can continue to offset foreign outflows amid a tighter global backdrop.India’s latest budget proposals have put domestic equities on watch after the government outlined higher transaction taxes on equity derivatives, a move analysts say could weigh on near-term sentiment by raising trading costs without delivering immediate offsets aimed at stabilising foreign portfolio flows.At the centre of investor concern is a proposed increase in the securities transaction tax (STT) applied to derivatives. Under the budget plan, STT on equity futures rises to 0.05% from 0.02%, while the levy on options premium is increased to 0.15% from 0.10% (with the tax on exercised options also lifted). In practice, this increases friction in a part of the market that plays an outsized role in price discovery and liquidity.Market participants argue the bigger issue is not only the tax increase itself, but the timing and the policy mix. The budget did not offer major, near-term initiatives designed specifically to draw foreign capital back into Indian equities, despite a backdrop of persistent foreign selling pressure. That omission matters because foreign flows often act as a marginal driver of index performance and sector leadership, especially during periods of global risk repricing.The immediate reaction was risk-off. Indian equities recorded their worst budget-day decline in six years, with broad-based selling across most sectors, as investors priced in potential impacts on trading activity and earnings sensitivity for market-facing financial firms. A key fear is that higher derivatives costs could reduce volumes and widen spreads at the margin, which can amplify volatility on down days and make rallies harder to sustain.Strategically, the government appears to be leaning toward cooling speculative excess in an “overheated” derivatives market rather than prioritising flow support. But for equity investors, the near-term question is whether domestic institutional buying remains strong enough to counterbalance foreign outflows, and whether earnings and central bank policy become the dominant catalysts once the budget impulse fades. Overall, the message from analysts and fund managers is straightforward: a derivatives tax hike can be absorbed over time, but in the near term it risks acting as a drag on sentiment, especially if foreign selling remains active and the policy package lacks immediate confidence-building measures for offshore investors. ---The big sell-off in Indian stocks tied to the budget tax story occurred on February 1, 2026. Saw India’s main indices post their worst Budget-day performance in six years, with the Nifty 50 down about 1.96% and the Sensex falling around 1.88% as investors sold off broadly and in particular brokers, exchanges and mid-/small-caps amid concerns about higher trading costs and absent measures to support foreign inflows. This adverse reaction unfolded during a special Sunday trading session held alongside the Union Budget announcement, highlighting how swiftly markets repriced risk once the tax changes were unveiled. This article was written by Eamonn Sheridan at investinglive.com.

Oracle plans a $45–50bn capital raise in 2026 to fund cloud infrastructure expansion, splitting funding between equity and a one-off bond issuance.Summary:Oracle plans to raise $45–50bn in 2026 to expand Oracle Cloud Infrastructure capacity.Funding will be split roughly evenly between equity and debt.Equity raising includes mandatory convertibles and up to $20bn via an at-the-market programme.Debt funding will come from a single investment-grade bond deal early in 2026.The plan reflects strong contracted cloud demand from major technology customersOracle Corporation said it plans to raise between $45 billion and $50 billion in 2026 to fund a significant expansion of its cloud infrastructure capacity, as demand from large enterprise and technology customers continues to grow.The company said the capital raising will be structured through a balanced mix of equity and debt, with the aim of preserving its investment-grade credit profile while funding long-term growth. The proceeds will be used to build additional Oracle Cloud Infrastructure capacity to meet already-contracted demand from some of the world’s largest technology groups.Oracle expects approximately half of the funding to come from equity-related issuance. This will include a combination of common equity and equity-linked securities, including a mandatory convertible preferred offering that will represent a relatively small portion of the overall equity raise. In addition, Oracle has authorised an at-the-market equity programme of up to $20 billion, allowing the company to issue shares gradually over time depending on market conditions and capital needs.The remaining funding is expected to be sourced from debt markets. Oracle plans a single issuance of investment-grade senior unsecured bonds early in the 2026 calendar year. The company said it does not expect to return to the bond market again later in the year, indicating a preference for a one-off transaction rather than multiple debt deals.Oracle said the funding strategy reflects its focus on disciplined capital allocation and balance-sheet strength as it scales its cloud business. The company has positioned Oracle Cloud Infrastructure as a core growth engine, competing more directly with other hyperscale cloud providers amid rising demand for data-intensive workloads, including artificial intelligence.The funding plan has been approved by Oracle’s board of directors. Goldman Sachs will lead the senior unsecured bond issuance, while Citigroup will lead the equity-related transactions, including the at-the-market programme and the mandatory convertible offering.The announcement underscores the scale of capital required to compete in global cloud infrastructure and highlights Oracle’s intention to lock in long-term capacity to support contracted customer demand through the next phase of growth. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s manufacturing sector returned to growth in January, posting its strongest improvement since 2022 as demand, output and hiring all rebounded.Summary:Japan’s manufacturing sector returned to expansion in January, recording its strongest improvement since August 2022.Output and new orders rose for the first time in well over a year, signalling a broad-based recovery in demand.Employment growth accelerated sharply as backlogs of work increased for the first time in three-and-a-half years.Cost pressures intensified, pushing selling price inflation to a 19-month high, partly reflecting yen weakness.Improved demand optimism was tempered by concerns around inflation and the durability of future growth.Japan’s manufacturing sector showed its clearest signs of revival in nearly three-and-a-half years at the start of 2026, with January PMI data pointing to a broad-based improvement in activity, demand, and employment. The latest survey suggests that factories are emerging from a prolonged period of stagnation, supported by stronger domestic and external demand, even as rising cost pressures re-emerge as a key risk.The headline S&P Global Japan Manufacturing PMI rose to 51.5 in January from 50.0 in December, moving back into expansion territory and marking the strongest improvement in operating conditions since August 2022. While the pace of growth remains moderate, the breadth of improvement across output, orders, and hiring underscores a notable shift in momentum.Production returned to growth for the first time since mid-2025 as new business inflows strengthened. Total new orders expanded at their fastest pace in nearly four years, reflecting improved demand conditions and successful product launches. Export demand also improved meaningfully, with overseas orders rising for the first time since early 2022, supported by firmer demand from key markets including the United States and Taiwan. Investment goods producers led the recovery, though gains were seen across all major manufacturing segments.The rebound in demand placed renewed pressure on capacity. Backlogs of work increased for the first time in three-and-a-half years, prompting firms to step up hiring. Employment growth accelerated to its strongest pace in more than three years as manufacturers sought to rebuild capacity after a prolonged period of caution. Purchasing activity also increased for the first time since late 2024, reinforcing the view that firms are positioning for sustained output growth.Despite the improving growth backdrop, inventories continued to decline. Input stocks were drawn down as materials were used to support higher production, while finished goods inventories fell at a slower pace as companies fulfilled rising orders. Supply-chain conditions remained mildly stretched, with delivery times lengthening due to staff shortages and low supplier inventories.Inflation pressures intensified notably. Input costs rose at the fastest pace in nearly a year, driven by higher labour and raw material costs as well as the weaker yen. Firms passed through some of these pressures, lifting factory-gate prices at the sharpest rate in 19 months. While confidence about the year ahead remains generally positive, supported by global demand for semiconductors and automobiles, business sentiment eased slightly as firms weighed inflation risks against the sustainability of demand.Overall, the January PMI signals that Japan’s manufacturing sector is regaining momentum, but the resurgence in price pressures will be closely watched by policymakers and markets alike. Earlier:Japan PM softens weak yen comments as election and intervention risks collideFormer "Mr Yen" Watanabe warns of risk of renewed yen selling backlash into Japan electionBoJ: Moderate recovery, inflation persistence reinforce cautious further tightening case This article was written by Eamonn Sheridan at investinglive.com.

The People’s Bank of China is due to set the daily USD/CNY reference rate at around 0115 GMT (2115 US Eastern time), a fixing that remains one of the most closely watched signals in Asian foreign exchange markets. China operates a managed floating exchange rate system, under which the renminbi (yuan) is allowed to trade within a prescribed band around a central reference rate, or midpoint, set each trading day by the PBOC. The current trading band permits the currency to move plus or minus 2% from the official midpoint during onshore trading hours. Each morning, the PBOC determines the midpoint based on a range of inputs. These include the previous day’s closing price, movements in major currencies, particularly the US dollar, broader international FX conditions, and domestic economic considerations such as capital flows, growth momentum and financial stability objectives. The midpoint is not a purely mechanical calculation, allowing policymakers discretion to guide market expectations. Once the midpoint is announced, onshore USD/CNY is free to trade within the allowable band. If market pressures push the yuan toward either edge of that range, the central bank may step in to smooth volatility. Intervention can take the form of direct buying or selling of yuan, adjustments to liquidity conditions, or guidance through state-owned banks. As a result, the daily fixing is often interpreted as a policy signal rather than just a technical reference point. A stronger-than-expected CNY midpoint is typically read as a sign the PBOC is leaning against depreciation pressure, while a weaker fixing for the CNY can indicate tolerance for a softer currency, often in response to dollar strength or domestic economic headwinds.In periods of heightened global volatility, such as shifts in US rate expectations, trade tensions or capital flow pressures, the fixing takes on added significance. For investors, it provides insight into Beijing’s currency priorities, balancing competitiveness, capital stability and financial market confidence. This article was written by Eamonn Sheridan at investinglive.com.

Australia’s Inflation Gauge cooled on the month but edged higher on the year, keeping inflation worries, and RBA hike risk,front and centre.Summary:The Melbourne Institute’s monthly inflation gauge rose 0.2% m/m in January, a sharp slowdown from 1.0% in December. The annual pace edged up to 3.6% y/y from 3.5%, keeping the signal consistent with inflation that is still uncomfortably sticky. The print lands at a sensitive moment for policy, with recent data (notably Q4 core inflation) already lifting expectations of a more cautious, or even tighter, RBA stance. A recent Reuters poll (reported Friday) showed a clear tilt toward a February 3 hike, highlighting how quickly the policy narrative has shifted back toward inflation control. Bottom line: a softer monthly read helps at the margin, but the still-high annual pace keeps pause/hike risk in play until the official CPI confirms a convincing downtrend.Australia’s Melbourne Institute Monthly Inflation Gauge posted a modest rise in January, with the index up 0.2% on the month after a much larger 1.0% gain in December. While the monthly pace cooled sharply, the annual rate ticked higher to 3.6% y/y from 3.5%, keeping the broader message one of inflation that is not yet comfortably back in the Reserve Bank of Australia’s target zone. Because the Melbourne Institute gauge is designed to provide a timely read on consumer price trends using an approach aligned with the ABS CPI framework, markets often treat it as a “temperature check” rather than a decisive signal on its own, particularly when the move is small. (Note, though, the importance of the data has diminished now that the Australian Bureau of Statistics provide monthly CPI readings in Australia.) Still, the direction of travel matters: the annual rate edging higher, even as the month-on-month pace moderated, fits with a theme investors have been grappling with since late 2025, disinflation is proving bumpy, and underlying pressures are not cooling as smoothly as policymakers would like.That context is important because the RBA has already been pulled back into a more hawkish conversation. Australia’s Q4 2025 inflation profile, especially on underlying measures, ran firmer than expected, which has lifted market pricing for tighter policy and sharpened the debate around whether the central bank can safely sit still. A Reuters poll reported late last week showed most economists expecting the RBA to lift rates at its February 2-3 meeting, a sharp reversal from earlier expectations of an extended hold. Against that backdrop, the January Inflation Gauge delivers mixed comfort. The smaller monthly increase is the kind of reading that, if repeated, would help rebuild confidence that inflation is moderating. But the slightly higher annual pace is a reminder that inflation outcomes are still running above levels consistent with a durable return to the RBA’s target band.For markets, the practical takeaway is that the Inflation Gauge is unlikely to change the near-term policy debate by itself. Instead, it reinforces the idea that the RBA’s next steps will remain tightly conditional on incoming official CPI and activity data. If inflation continues to print “sticky” and demand holds up, the RBA may be forced to maintain a restrictive stance for longer—and the risk of a hike remains alive. They are sitting around the policy table today and tomorrow at the RBA. This article was written by Eamonn Sheridan at investinglive.com.

BoJ policymakers signalled moderate economic momentum and stickier inflation trends, endorsing careful future rate increases if forecasts unfold as expected.Summary:BOJ policymakers agreed the Japanese economy has recovered moderately but noted uneven momentum in parts of the economy. Inflation is projected to continue rising moderately, underpinned by wage and price interactions and import pass-through. The depreciation of the yen is seen as adding to domestic price pressures via higher import costs. Financial conditions remain broadly accommodative even after recent policy tightening, and further rate increases were judged appropriate over time. Board members emphasised careful, timely policy adjustments to balance price stability and economic resilience.The Bank of Japan (BOJ) released the Summary of Opinions from its January 22–23 Monetary Policy Meeting, shedding light on how board members currently view economic and price conditions ahead of the next policy decisions. While the economy has shown signs of moderate recovery, policymakers highlighted a mix of opportunities and risks that could shape future monetary moves. Overall economic activity in Japan was judged to have regained moderate momentum, supported by recoveries in global demand and government economic measures. However, some sectors still show uneven performance, and external policy shifts in key trading partners continue to influence the domestic outlook. The BOJ’s assessment is in line with its recent quarterly Outlook for Economic Activity and Prices report, which projects continued moderate growth partly supported by accommodative global conditions. On inflation, members expect consumer prices to continue rising at a moderate pace, with an ongoing interaction between wages and prices underpinning this trend. The pass-through of rising personnel costs into prices is considered moderate so far, though the impact of higher import costs, amplified by the weak yen, remains a key factor in price dynamics. Policymakers emphasised the need to monitor the balance between inflation, wages, and household income, especially as government measures and fiscal policy also play a role in shaping real income trends. Views on monetary policy reflect a cautious but increasingly vigilant stance. Even after the BOJ’s December decision to raise the policy rate to a level not seen in decades, financial conditions were judged to remain accommodative. Some members pointed to the appropriateness of continuing gradual rate increases if the current outlook materialises, with emphasis on careful timing and consideration of economic feedback effects. The board also discussed how to manage policy communication effectively to avoid lagging behind emerging price pressures, including risks tied to exchange rate movements. Long-term bond market developments and volatility in super-long Japanese government bond yields were noted as areas requiring ongoing attention, with indications that flexible responses could be needed under exceptional market conditions. In this context, members signalled that further adjustments to policy accommodation should be made in a timely way, without pre-commitment to a set pace but with responsiveness to data on prices, growth, and financing conditions. Government representatives attending the meeting underscored the importance of appropriate monetary policy coordination alongside fiscal efforts to achieve sustainable price stability and economic growth, highlighting cooperation under the Bank of Japan Act and shared objectives toward the inflation target.Full text here:Summary of Opinions at the Monetary Policy Meeting on January 22 and 23, 2026 Earlier:Japan PM softens weak yen comments as election and intervention risks collideFormer "Mr Yen" Watanabe warns of risk of renewed yen selling backlash into Japan election This article was written by Eamonn Sheridan at investinglive.com.

Oil opens softer as traders fade some geopolitical premium, while OPEC+ keeps March output unchanged and leaves the post-March path deliberately open.Summary:Oil is starting the week on the back foot after a strong run-up, as traders reassess how much geopolitical risk is already priced in. OPEC+ agreed to hold output policy steady for March, extending the first-quarter pause in planned increases. The group offered no guidance beyond March, keeping optionality high as uncertainty around Iran and demand trends persists. US–Iran tensions remain a two-way risk: escalation would tighten supply perceptions, but talk of dialogue can also drain the risk premium quickly. No Trump attack on Iran over the weekend is weighing on the oil price.On Saturday Trump told reporters Iran was "seriously talking" with Washington.Supply noise from Kazakhstan (including disruption/restart dynamics around the Tengiz oilfield) is another variable supporting recent tightness, even as 2026 “oversupply” debates linger.Oil prices are opening lower to begin the week, with markets taking a breath after a sharp January rally and a run toward six-month highs. The early pullback fits a familiar pattern: when crude rallies hard on geopolitical headlines, the next session often tests whether the “risk premium” can stay embedded without fresh escalation. The weekend decision from OPEC+ adds to the cautious tone. The group’s eight key producers, led by Saudi Arabia and Russia, reaffirmed that they will keep March output policy unchanged, extending the pause on planned increases that had already been rolled over for January and February. The pause followed a 2025 period in which quotas were lifted by roughly 2.9 million barrels per day from April through December, before the group opted to freeze further increases into early 2026 amid seasonally softer demand. What markets are noticing most was not just the hold, but the lack of forward guidance beyond March. That ambiguity matters because it keeps traders guessing about the group’s reaction function into Q2, when demand patterns and the “call on OPEC+ crude” can shift materially. It also signals that the alliance wants maximum flexibility while geopolitical risks remain fluid. Geopolitics remains the key swing factor. Reports that Donald Trump is weighing options on Iran, alongside indications both sides are at least signalling openness to talks, creates a wide distribution of outcomes. Escalation could rapidly lift crude via disruption fears; de-escalation can just as quickly compress the premium. Meanwhile, supply-side noise from Kazakhstan has been an additional support in recent sessions, with disruptions and staged restarts at the giant Tengiz complex tightening near-term balances at the margin. For now, crude’s softer open looks less like a fundamental regime change and more like positioning and risk-premium management: OPEC+ is steady, geopolitics is unresolved, and demand—especially from large importers—remains the big variable the cartel cannot control. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s election-driven fiscal debate is keeping bond and FX markets on edge, with any hint of looser policy risking renewed volatility.Summary:Japanese markets remain highly sensitive to fiscal policy signals ahead of the February 8 snap election, according to a former senior currency official.Any expansion of tax relief risks renewed selling pressure in government bonds and the yen.Investor nerves were exposed last month after proposals to cut food-related consumption taxes triggered sharp moves in JGBs and FX.While markets have stabilised, underlying concerns over debt, trade deficits and policy clarity persist.Election-driven fiscal promises could again test market tolerance and intervention thresholds.Japanese financial markets remain on a knife-edge as investors assess the risk that looser fiscal policy could resurface during the current election campaign, according to analysis from a former senior currency official in comments to Reuters.Concerns centre on the possibility that the ruling Liberal Democratic Party may lean further toward tax relief measures if political support appears to weaken ahead of the February 8 snap election. Even modest hints of expanded fiscal easing, particularly around consumption taxes, could reignite market volatility similar to the sharp selloff seen last month.That episode underscored investor sensitivity to Japan’s fiscal outlook. When Prime Minister Sanae Takaichi pledged a temporary cut to food-related consumption taxes, markets reacted swiftly. Super-long Japanese government bonds came under heavy pressure, while the yen weakened toward levels that have historically prompted official intervention. The moves revived global concerns about fiscal discipline in a country where public debt already exceeds twice the size of the economy.Since then, conditions have steadied somewhat. The yen has retraced part of its losses, aided by market speculation that Japanese and US authorities conducted so-called rate checks, a step widely interpreted as a warning shot ahead of potential FX intervention. Bond markets have also found temporary footing, though volatility remains elevated by historical standards.According to former vice finance minister Hiroshi Watanabe, investors remain acutely alert to political signals. Any suggestion that tax relief could broaden beyond current commitments risks provoking a renewed market backlash. He noted that recent policy messaging suggests senior officials have become more aware of the constraints imposed by global capital markets, particularly the caution expressed by large US and European investors.Despite the recent stabilisation, structural factors continue to limit the scope for sustained yen strength. Japan’s large public debt burden, a persistent trade deficit, and uncertainty surrounding the future path of Bank of Japan policy all weigh on investor confidence. While short-term yen rallies remain possible, especially if intervention risks resurface, longer-lasting appreciation appears difficult without clearer progress on fiscal sustainability and monetary normalisation.With election dynamics still in play, markets are likely to remain hypersensitive to policy headlines. The episode highlights how Japan’s reflation ambitions are increasingly constrained by the need to reassure investors that fiscal expansion will not come at the expense of long-term stability. This article was written by Eamonn Sheridan at investinglive.com.

Australia’s manufacturing sector started 2026 with stronger growth momentum, supported by rising orders, hiring, and improved confidence.Summary:Australia’s manufacturing sector expanded at a faster pace in January, marking a third consecutive month above the growth threshold.New orders strengthened sharply, including the first rise in export demand in five months, lifting production momentum.Employment growth accelerated to its strongest pace since early 2023 as firms responded to rising workloads.Supply-chain frictions persisted, contributing to higher input costs and renewed selling price inflation.Business confidence improved to its highest level in nearly four years, supported by a more optimistic demand outlook.Australia’s manufacturing sector entered 2026 on firmer footing, with January PMI data pointing to a clear acceleration in activity and improving demand conditions. The latest survey results indicate that growth momentum has broadened across output, orders, employment, and purchasing, reinforcing signs that the sector is emerging from a prolonged period of subdued conditions.The headline manufacturing PMI rose further above the 50 threshold in January, signalling a third consecutive month of expansion and the fastest pace of improvement in five months. Output growth strengthened as manufacturers reported a solid uplift in new business inflows, supported by both domestic demand and a renewed contribution from overseas markets. Notably, export orders expanded for the first time since late winter, suggesting external demand is beginning to stabilise after a prolonged lull.Stronger order books prompted firms to lift production schedules and expand capacity. Employment levels rose at the fastest pace in almost three years, reflecting both higher current workloads and improved confidence in future demand. The increase in staffing helped manufacturers reduce outstanding work, easing some operational pressures even as activity picked up.Purchasing activity also increased for a third straight month, broadly tracking the improvement in new orders. However, supply-side challenges remain a constraint. Manufacturers continued to report transport bottlenecks, port congestion, and material shortages, which led to further deterioration in supplier delivery times. While the pace of delays eased slightly, logistical disruptions contributed to slower inbound shipments and a further drawdown in input inventories. At the same time, delays to outbound deliveries resulted in an accumulation of finished goods stocks.Cost pressures intensified at the start of the year. Higher raw material prices and ongoing supply constraints drove the fastest rise in input costs in nine months. In response, manufacturers passed some of these increases through to customers, lifting selling prices again in January. That said, both input and output price inflation remained below long-run survey averages, suggesting cost pressures, while rising, are not yet excessive.Encouragingly, sentiment across the manufacturing sector improved markedly. Firms reported their strongest confidence in nearly four years, underpinned by expectations of firmer economic growth, improving market conditions, and planned business investment. Forward-looking indicators, including new orders and future output expectations, point to continued expansion in the months ahead, although supply constraints and inflation dynamics remain key risks to monitor. This article was written by Eamonn Sheridan at investinglive.com.

Campaign comments on the weak yen have exposed the political and market tightrope Japan is walking ahead of its snap election.Summary:Japan’s prime minister highlighted the benefits of a weak yen during the election campaign, creating tension with official efforts to curb excessive FX moves.Subsequent clarifications sought to neutralise market reaction, stressing neutrality on currency direction.Yen weakness remains politically sensitive as it lifts import costs and household inflation ahead of the snap election.Finance officials continue to warn against disorderly FX moves, keeping intervention risk alive.Opposition figures seized on the comments as evidence the government is out of touch with cost-of-living pressures.Japan’s currency policy has become an unexpected flashpoint in the run-up to the February 8 snap election, after Prime Minister Sanae Takaichi publicly highlighted the advantages of a weaker yen before walking back her remarks amid market and political backlash.Speaking on the campaign trail Saturday, Takaichi framed yen depreciation as beneficial for exporters, arguing that currency weakness has helped cushion the impact of external headwinds, including US trade barriers. The comments stood in contrast to the more guarded tone struck by Japan’s finance ministry, which has repeatedly refused to rule out action to counter excessive foreign exchange volatility.The yen has been trading near 18-month lows against the US dollar, a move that has supported export competitiveness but also lifted import prices and fuelled domestic inflation. That inflationary pressure has complicated the policy outlook, increasing speculation about further interest rate adjustments by the Bank of Japan while simultaneously heightening political sensitivity around household living costs.Following scrutiny, Takaichi sought to clarify her position, stressing that she does not favour either a weak or strong currency. Instead, she emphasised the government’s longer-term objective of building an economic structure resilient to exchange-rate swings, underpinned by stronger domestic investment and reduced vulnerability to external shocks. The effort appeared aimed at limiting the risk that campaign rhetoric could be interpreted as tacit approval of further yen weakness.Currency markets have been especially alert after the yen briefly strengthened on reports that the New York Federal Reserve had contacted banks the previous week ( sharp yen gains late Friday after market chatter of a Federal Reserve rate check) regarding yen pricing, a step often seen by traders as a prelude to coordinated intervention. Japan’s finance minister Satsuki Katayama has consistently warned that authorities stand ready to act if currency moves become excessive or disorderly.Opposition figures were quick to criticise the prime minister’s initial remarks. Yoshihiko Noda, now a co-leader of the largest opposition bloc, argued that prolonged yen weakness erodes household purchasing power and risks alienating voters already grappling with rising costs.Beyond the election, investors remain uneasy about Japan’s fiscal position. The yen’s prolonged slide has coincided with a surge in long-dated government bond yields to record highs, reflecting concerns over debt sustainability as the government continues efforts to reflate the economy. The episode underscores how finely balanced Japan’s currency messaging has become, where even campaign remarks can reverberate through markets. This article was written by Eamonn Sheridan at investinglive.com.

Mon: US Holiday (MLK Day), Eurogroup Summit; EZ Final HICP (Dec), Canadian CPI (Dec), Chinese GDP (Q4), US Leading index (Oct), Housing Starts/Building Permits (Oct), Philadelphia Fed (Jan), New Home Sales (Nov), Australian Flash PMIs (Jan)Tue: PBoC LPR, EU Economic & Financial Affairs Council, UK Unemployment Rate & Average Earnings (Nov), Swiss Producer Prices (Dec), German ZEW (Jan), French & German Flash PMIs (Jan)Wed: IEA OMR; UK CPI (Dec)Thu: ECB Minutes (Dec), Norges Bank Policy Announcement, CBRT Policy Announcement; UK PSNB (Dec), Australian Employment (Dec), US PCE (Nov), US GDP/PCE Final (Q3), New Zealand CPI (Q4), Japanese CPI (Dec)Fri: BoJ Policy Announcement; UK Retail Sales (Dec), Canadian Retail Sales (Nov), US Durable Goods (Nov), Pending Home Sales (Dec), UK, EZ and US Flash PMIs (Jan), EZ Consumer Confidence Flash (Jan)Chinese GDP and Activity Data (Mon): China will publish Q4 and full-year GDP with December activity figures, with Q4 growth seen easing to 4.4% Y/Y from 4.8% in Q3, the softest pace in roughly three years. 2025 growth is estimated near 4.9%, broadly in line with the official ~5% goal, underpinned by exports and policy support, while domestic demand remains subdued amid a prolonged property slump and lingering deflationary pressures. Beyond 2025, economists see growth moderating to 4.5% in 2026, heightening expectations for policy support. Markets anticipate a 10bp rate cut in Q1 by the PBoC, alongside a proactive fiscal stance from Beijing. Key risks stem from intensifying global trade frictions and export headwinds; any shortfall in external demand could trigger additional domestic stimulus.Canadian CPI (Mon): With the BoC at the lower end of its neutral estimate, the central bank is expected to remain on hold for the foreseeable future, with markets leaning towards the next move being a rate hike. Around 12bps of hikes are currently priced in by year-end, implying a 48% probability of a rate increase in 2026. The data will be used to help gauge rate expectations from the BoC; however, ING says market pricing for a rate hike this year is premature. “In our view, market pricing for a rate hike in late 2026 looks premature. Inflation isn’t showing worrying signs, the labour market may loosen further, and the upcoming USMCA renegotiations could dampen consumer and business sentiment again.” ING nonetheless expects the next move to be a hike, but in 2027.PBoC LPR (Tue): Seen as a non-event, with both the one-year and five-year Loan Prime Rates (LPRs) expected to be maintained. In the previous release, the PBoC announced no changes to China’s benchmark LPRs, keeping them unchanged for a seventh consecutive month. The one-year LPR, the benchmark for most new loans, was held at 3.00%, while the five-year LPR, the reference rate for mortgages, remained at 3.50%.UK Unemployment/Earnings (Tue): Note, a Bloomberg report suggests the ONS has drawn up contingency plans to delay the new LFS by around six months, a point that may be updated in the November release. For November, the Unemployment rate is expected to moderate a touch to 5% (prev. 5.1%). However, due to reliability issues, the ONS points us to the non-overlapping comparison, which Investec thinks would show an unemployment rate of 4.8%. Overall, though, the message of a weaker labour market remains, but at a slower pace of decline. Wages are expected to moderate to 4.4% (prev. 4.7%) for the headline, while the ex-bonus figure is seen ticking down by 0.1pps to 4.5%. Data that is consistent with further BoE easing, though the still absolute high level of wages pushes back on the argument for near-term cuts. Further out, this trend is seen continuing with the December PMIs pointing to “worry jobs data”, even once the post-Budget uncertainty had begun to clear. Market pricing implies a cut in June with c. 29bps implied; though, April’s odds stand at around 21bps. More generally, we will get fresh information at the time of the February MPR, when the BoE updates its forecasts to account for the Budget.UK CPI (Wed): Prices in December are expected to increase to 3.3% Y/Y (prev. 3.2%), with the M/M figure at 0.4% (prev. -0.2%). Upside driven by measures in the Autumn Budget, namely tobacco duties. For reference, the BoE’s forecast for the period is 3.5%, as per the November MPR; as a reminder, the BoE’s February MPR will account for the measures announced in the Budget. The December meeting saw the BoE note that the Budget’s measures will lower CPI modestly in April 2026, but then increase it by 0.1-0.2pps during 2027 and 2028. The collection period will factor into the release to a degree, with a later collection of data in December almost certainly correlated with higher airfares and, by extension, elevated inflation. For December, the period’s PMIs showed a strengthening in inflationary pressures as 2025 closed out, with input prices lifting by the most in seven months and output charges rebounding. Overall, the skew to the series is a hotter one, particularly given the BoE’s forecast and potential near-term impact of tobacco duties. For the BoE, the assessment that inflation will get to target mid-2026 should remain intact, even if there is a hotter one-off print. As such, the narrative of continued easing but at a potentially slower than quarterly pace will likely remain, with the next cut not priced until June (-29bps implied).US PCE (Thu):The Bureau of Economic Analysis said US personal income and outlays for October and November 2025, including PCE inflation data (the Fed’s preferred gauge), will be released on 22nd January. The BEA was unable to produce normal monthly PCE inflation data during the government shutdown because of missing data sources and will approximate October and November PCE using CPI averages. Analysts said differences between CPI and PCE mean November CPI may disproportionately influence the delayed and partly modelled PCE inflation estimates. In November, headline producer prices rose 0.2% M/M, with annual PPI running at around 3.0%. Meanwhile, November CPI showed inflation of 2.7% Y/Y, undershooting expectations and partly distorted by missing data collection during the shutdown. Looking ahead to the December PCE report, due on 20th February, the data are likely to show firmer price pressures than suggested by the latest CPI. While December CPI showed headline inflation at 2.7% Y/Y and core inflation at 2.6%, underlying components point to upside risks for PCE: food prices rose 0.7% M/M, the largest increase since October 2022, and economists noted a widening gap between CPI and PCE measures. PCE places greater weight on categories where prices are currently rising, reflecting actual consumer spending patterns more closely than CPI’s fixed basket. Analysts at Barclays and Morgan Stanley raised their December PCE forecasts to just under 0.5% M/M, according to Reuters, which could lift the annual rate to 2.8-2.9%. BNP Paribas also warned that PCE inflation is likely to run significantly hotter than CPI. Together with firmer producer price trends, the data suggest PCE may remain close to 3%, reinforcing expectations that price pressures will ease only gradually. Writing after the December inflation data, WSJ Fedwatcher Nick Timiraos said the latest trends are unlikely to alter the Fed’s wait-and-see stance, as officials want clearer evidence that inflation is levelling off; he added that rate cuts would likely require either weakening job market conditions or further signs of fading price pressures over the coming months. Most Fed officials speaking this year have said that while inflation is easing towards its 2% target, it remains above that level, favouring a cautious stance on policy adjustments; they view current monetary policy as appropriately restrictive, with any cuts contingent on clearer disinflation progress. At the time of writing, money markets are assigning a 5% probability that rates will be cut at the 28th January confab, and just over a 20% chance of a 25bps cut by the 18th March meeting, according to CME data. Through to the end of the year, the statistical mode sees rates at 3.00-3.25% in December (vs the Fed’s December projections of 3.25-3.50%, and vs the current 3.50-3.75%).Japanese CPI (Thu): Prior data showed headline CPI Y/Y at 2.9%, national core CPI (ex-fresh food) at 3.0%, and M/M at 0.4%. Core-core inflation (ex-fresh food and energy) eased slightly to 3.0% Y/Y from 3.1%, but price pressures remain well above the BoJ’s 2% target for a 44th consecutive month, reinforcing expectations of further policy normalisation. That said, recent Bloomberg reporting suggests the BoJ is placing greater emphasis on the inflationary impact of a weak JPY, particularly as firms pass through higher import costs, which could have implications for future rate hikes. Nonetheless, the BoJ is expected to maintain its policy settings in January.Norges Bank (Thu): Norges Bank is widely expected to keep rates unchanged at 4.00%, in line with the rate path set out at the December meeting. That meeting saw policymakers hold rates, as expected, and leave the MPR largely unchanged. On the data front, the Bank flagged risks to the inflation target if rates are cut too early, while Governor Bache also said NOK weakness could slightly lift inflation prospects. For this meeting, policymakers will assess a hotter-than-expected CPI report that beat both market consensus and Norges Bank’s own forecasts, though much of the upside can be attributed to Christmas-related components such as food and transport. Elsewhere, there has been little activity data since the last meeting, although the latest Business Tendency Survey showed weak manufacturing activity in Q4 while pointing to a rebound in Q1. The NOK has strengthened since the last announcement, with EUR/NOK moving from 11.9688 to 11.7165, which should ease policymakers’ concerns that currency weakness could reignite inflation pressures. SEB says the accompanying statement is likely to avoid dovish language to “avoid triggering a weaker NOK”, while UBS expects the Bank to reiterate its December message.ECB Minutes (Thu): In December, the ECB maintained its policy settings as expected. Forward guidance stuck to a meeting-by-meeting and data-dependent approach. On the inflation front, the 2026 projection was revised up while the 2027 view was lowered. Overall, the narrative that the ECB is at a 2.00% Deposit Rate terminal remains the base-case, and was corroborated further by the statement/presser. Corroboration that sparked a modest hawkish reaction. Since, remarks from officials have made clear that the “good place” narrative is widely held, and while there are some differing views around whether the next move is more likely a cut or a hike, the narrative that rates are on hold for the time being is seemingly the base case.CBRT Policy Announcement (Thu): The CBRT is expected to deliver a 150 bp rate cut at its Jan. 22 MPC meeting, taking the policy rate to 36.5%, after softer-than-expected December inflation. Headline CPI rose 0.89% M/M, pulling annual inflation down to 30.9%, well below forecasts and strengthening the case for continued easing. That said, CBRT Governor Karahan has warned inflation may remain “noisy” over the next two months, with upside risks from food prices early in 2026, while reiterating that policy will remain tight and data-dependent should the inflation outlook diverge from interim targets. Disinflation has become more broad-based, led by easing services inflation and improved inflation expectations, but sticky core inflation and elevated expectations continue to warrant caution. BBVA said December’s inflation outcome creates scope for a 150bp cut, while flagging risks from minimum wage hikes and persistent services inflation.BoJ Policy Announcement (Fri): The Bank of Japan is widely expected to hold rates steady, with a strong consensus that policy normalisation will proceed only gradually after December’s hike to 0.75%, the highest level in 30 years. A large majority of economists expect no change through March, with July seen as the most likely timing for the next hike. Around three-quarters forecast rates at 1% or higher by September, while the median terminal rate estimate has risen to 1.5%. Recent reporting suggests the BoJ is likely to upgrade its economic growth outlook, reflecting the impact of the government’s fiscal stimulus package, while maintaining its view that underlying inflation will converge sustainably towards target over the medium term. Officials are also said to be placing greater emphasis on the inflationary impact of a weak JPY, particularly as firms increasingly pass through higher import costs, reinforcing a data- and FX-sensitive policy stance. Political considerations may temper the pace of tightening unless yen weakness feeds more clearly into inflation. Alongside the rate decision, the Bank will release its latest quarterly outlook report. A Bloomberg poll of economists shows the BoJ is expected to retain the same inflation outlook as in the previous report. However, a more recent Reuters source report suggested the BoJ is likely to raise its economic growth and inflation forecasts for FY26. The report added that many policymakers see scope to raise the policy rate as early as April due to yen weakness. Markets saw the implied April meeting rate rising to 0.86% from 0.80%, although markets are still not fully pricing in a rate hike until September.UK Retail Sales (Fri): November’s figure printed softer than expected, particularly M/M, while the Y/Y was weak but still rebounded from the prior pre-revision. Activity in December may have rebounded further, as budget uncertainty passed. However, the month was categorised as a “drab Christmas” by BRC, with retail sales growth of 1.2% in December, well below the 12-month average of over 2%. Much of the downside was driven by non-food categories. Though, the details highlight a pickup in the last week of December and into January, as seasonal discounts drove activity. KPMG, on the BRC December series, remarked that it remains a challenging time for retailers as consumers dial back on spending. Overall, the release is unlikely to change the narrative of UK economic activity picking up into the end of 2025, with growth likely to surpass the BoE’s view of a stagnant Q4.UK Flash PMIs (Fri): January’s flash read follows on from a slight uptick in the December series, which saw an uptake in activity amid some signs of a recovery in confidence after pre-budget gloom. Indicators for January, via the ONS, showed a decrease in retail footfall amid the relatively adverse weather conditions seen at the start of the year. Furthermore, in terms of confidence, some 60% of respondents believe that the cost of living had increased M/M while staff turnover increased modestly in the period. For January, expectations are for the three main PMI measures to remain broadly unchanged M/M; previously at 51.4, 50.6 & 51.4 for services, manufacturing and composite, respectively.EZ Flash PMIs (Fri): A release that is likely to be characterised by ongoing geopolitical uncertainty, elevated energy (particularly gas) prices and renewed political uncertainty in France. However, the survey period may not encapsulate the developments over the last week, and any fresh ones we may get over the weekend and/or in the days preceding the report. To recap, December’s series saw an increase to staffing levels and the trend of new business as being on a path to growth. HCOB surmised December as “overall, the recovery in services gained momentum in the fourth quarter, which is a good basis for starting the new year with confidence”. Note, the metrics are unlikely to have any meaningful impact on the ECB, with the expectation firmly that they will be on hold at a 2.00% Deposit Rate for the foreseeable future.This article originally appeared on Newsquawk. This article was written by Newsquawk Analysis at investinglive.com.

The earnings calendar stays busy next week with major implications for the Nasdaq, the consumer outlook, and the AI trade.This week was a major mixed bag with Meta and Microsoft going in opposite directions. The AI narrative faces another major test next week as Alphabet (GOOGL) and Amazon (AMZN) will drive sentiment for the Nasdaq 100. On the chip side, AMD, Arm Holdings, and Qualcomm will be pivotal for semiconductors.Monday, February 2AM: Disney, Tyson Foods, Aptiv, IDEXX Labs, HessPM: Palantir, NXP Semiconductors, Simon Property Group, Teradyne, RambusTuesday, February 3AM: PayPal, PepsiCo, Pfizer, Merck, Eaton, GartnerPM: AMD, Super Micro, Chipotle, Enphase, Amgen, PrudentialWednesday, February 4AM: Uber, Eli Lilly, Novo Nordisk, AbbVie, Boston Scientific, UBS, CME GroupPM: Alphabet (Google), Arm Holdings, Qualcomm, Snap Inc., O’Reilly Auto Parts, elf BeautyThursday, February 5AM: ConocoPhillips, Shell, Bristol Myers Squibb, Estee Lauder, Cigna, LindePM: Amazon, MicroStrategy, Reddit, Roblox, Affirm, Atlassian, Barrick GoldFriday, February 6AM: Toyota, Biogen, Canopy Growth, Under Armour, Centene, AutoNationWednesday is something of a GLP showdown day as demand for the biggest drug in history is tested. Also, with Disney, PayPal, Uber, PepsiCo, and Amazon all reporting, we will get a very clear picture of whether the US consumer is tightening their belt or continuing to spend. Disney on Monday saying that it's seeing strong theme park demand would go a long way towards quelling travel fears.Here are some names to think about on the macro side:Eaton (ETN) – Tuesday AM: A critical bellwether for the "electrification" trade. Their earnings will tell us if the massive demand for data center power and grid infrastructure upgrades is sustaining.Cummins (CMI) – Thursday AM: A classic industrial proxy. As a major engine manufacturer for trucks, their guidance is a direct read on freight activity and the health of the heavy transport sector.Affirm (AFRM) – Thursday PM: While PayPal gives us payment volume, Affirm gives us "credit stress." Watch their delinquency rates to see if the consumer is relying too heavily on Buy Now, Pay Later debt to stay afloat.Cemex (CX) – Thursday AM: A global proxy for construction and infrastructure. If cement volumes are down, it usually signals a slowdown in commercial and residential building projects.Tyson Foods (TSN) – Monday AM: A key inflation indicator. Their input costs and pricing power will show whether food inflation is truly sticky or finally easing for the average household.Barrick Gold (GOLD) – Thursday PM: With gold hovering near highs (or lows, depending on market context), Barrick serves as a check on mining costs and a proxy for the anti-fiat/inflation-hedge trade. This article was written by Adam Button at investinglive.com.

Trump nominates Kevin Warsh to be the next chairman of the Federal ReserveFed's Musalem: Further interest rate cuts not advisableEyes on Iran this weekend as Trump talks about ships heading there once againFed's Waller: Dissented in favour of rate cut because policy remains too much restrictiveFed's Bostic: I want clear evidence of a return to 2% inflationCanada GDP for November +0.0% vs +0.1% expectedUS December PPI final demand Y/Y +3.0% vs +2.7% expectedGermany January preliminary CPI +2.1% vs +2.0% y/y expectedMarkets:Gold down $530 to $4860Silver down $33 to $82.70WTI crude oil up 47-cents to $65.90S&P 500 down 0.4%Nasdaq down 0.9%US 10-year yields up 1.8 bps to 4.24%USD leads, AUD lagsIt was a day for the ages in the precious metals market as gold fell 10% and silver fell 30% in its worst-ever percentage drop. It's been a parabolic run higher -- particularly in silver -- and the air came out of it today in a crushing decline. The selling started in Asia but silver was still at $104 early in US trade; it eventually fell as low as $77.80. Similarly, gold had steadied around $5170 before tanking to $4697 at the lows. Both had modest bounces late.The nomination of Warsh got some of the credit for both moves but I think that's dubious, or fitting the narrative to the price action. Volatility picked up yesterday and it was an old-fashioned stampede to the exits. If anything, I'd say that yesterday's fall in MSFT shares showed that nothing is safe and that reverberated. The take from the market so far is that Warsh is secretly hawkish, despite his public comments otherwise. Time will tell but no one really knows how we will react once in the role and the data starts rolling in. Moreover, he's part of a committee, not a dictator so rates will go where the data leads us.On that front, the PPI numbers were hot and oil prices rose again today. Eyes are on Iran this weekend with persistent talk about potential US strikes. Trump brought down the temperature briefly (leading to a quick $1 drop in oil) when he said Iran wants to negotiate. Later though, crude recouped those losses.Overall it was a crazy week that ended with some intense drama. Next week features another flush earnings calendar that starts with Disney and Palantir on Monday. The week will end with non-farm payrolls.Until then, have a great weekend. This article was written by Adam Button at investinglive.com.

The Canadian dollar is down against the US dollar but it's actually outperforming every currency aside from the dollar. That's a better read on how the loonie has reacted to the latest Trump tariff threats than USD/CAD alone, which is up 105 pips to 1.3594.Even with that pair, if you zoom out over a couple weeks, today's climb is modest.To recap, Trump threw a fit about Canadian certifications of some Gufstream jets and said he was decertifying Bombardier jets. The thing is, Bombardier jets are flown all over the United States and immediately grounding them would be disastrous for air travel.The market immediately took it as a laughable threat rather than a real action.This is what Trump said:Based on the fact that Canada has wrongfully, illegally, and steadfastly refused to certify the Gulfstream 500, 600, 700, and 800 Jets, one of the greatest, most technologically advanced airplanes ever made, we are hereby decertifying their Bombardier Global Expresses, and all Aircraft made in Canada, until such time as Gulfstream, a Great American Company, is fully certified, as it should have been many years ago. Further, Canada is effectively prohibiting the sale of Gulfstream products in Canada through this very same certification process. If, for any reason, this situation is not immediately corrected, I am going to charge Canada a 50% Tariff on any and all Aircraft sold into the United States of America. Thank you for your attention to this matter!The heart of the matter is that Canada is now taking steps to check and certify planes after the 737 MAX fiasco and some Trump donor didn't like it that his private jet was delayed.So what's the lesson here? We've seen this before but the market just doesn't take tariff threats seriously anymore. Even Bombardier shares are down only 6%, which isn't even as bad as it was on Monday when shares caught a downgrade and fell 10%. This article was written by Adam Button at investinglive.com.

Thankfully, there's no triple-levered silver ETF, or at least one with any trading volume. With silver down 33% today, that would be an extinction-level event.We saw something similar in the VIX ETF implosion a few years ago as it was liquidated. This time, there's only a twice-levered ETF to worry about. That's the AGQ product from ProShares.Going into the day, it held about $5 billion in assets tied to silver and -- needless to say -- it's going to be much less tomorrow. It's trading down 66%, which should wipe out about $3 billion of that.This chart is actually telling in hindsight as it shows a diminishing AUM this week, even as silver made new highs. That was a red flag that retail enthusiasm was waning and now here we are.'At the moment, it looks like this ETF is behaving as it's supposed to but when markets move 33%, bad things tend to happen so it's worth keeping an eye on the headlines after the close. Whether it's in this ETF or in the derivatives market, there are likely to be some bodies piled up somewhere or some margin calls unmet.When that happens, there is often even more forced liquidation and further pain. We also haven't seen how these moves will affect foreign markets where margin lines were certainly be ringing over the weekend.It's an ugly picture all around and so far the indications are that the market is functioning, but whenever a market has its worst day ever -- particularly one as big as silver -- there are some real risks in market plumbing. This article was written by Adam Button at investinglive.com.