We recognized in February that inflation was too highThe economy is in quite a good position, policy judgments are difficultHave to be patient in judging policyThere's been some weakness in the Australian dollar after her comments. It looks like she doesn't want to overreact to near-term data and take a more patient approach.As a reminder, the RBA hiked the Cash Rate by 25 bps at the last meeting bringing it back to 3.85%. The central bank delivered a hawkish surprise as it signalled two more rate hikes by year-end compared to just one expected by the market at the time.Today, we got the monthly Australia's CPI and the Trimmed Mean Y/Y beat expectations coming in at 3.4% vs 3.3% prior. The data triggered a hawkish reaction with the Australian dollar rallying across the board on higher March rate hike odds (24%).After Bullock's comments, traders pared back their bets, with the probabilities of a back-to-back rate hike in March now standing at 13%. The RBA focuses mainly on the quarterly CPI, which is due in April. If the data continues to surprise to the upside, a rate hike in May will be a guarantee. This article was written by Giuseppe Dellamotta at investinglive.com.

FUNDAMENTAL OVERVIEWGold pared back Monday’s gains yesterday as the price pulled back to retest the broken 5100 level. The bullish momentum from the Friday’s US Supreme Court decision seems to have already waned, which is something we expected given no changes to the big picture. In fact, Trump has already imposed new tariffs under a different law and the tariff deals remain in place. The new levies actually reduce the effective average tariff rate, so at the margin it could be a positive. The market might remain supported in the short-term amid some uncertainty, but I don’t see material changes to justify a rally back to all-time highs, at the moment. The real risks remain a potential US-Iran military escalation which could take gold prices to new highs or a hawkish repricing on stronger US data which would have a negative effect on the market. Fed’s Waller mentioned that he would change his dovish stance in case the strong January’s jobs data is repeated in February, so next week’s NFP report is going to be a key risk event for gold. GOLD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see the price pulled back to retest the broken resistance now turned support around the 5100 level. The buyers stepped in around the support with a defined risk below it position for a rally into new all-time highs. The sellers will want to see the price falling back below the support to pile in for a drop into the trendline. GOLD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can see a minor upward defining the bullish momentum on this timeframe. The buyers will likely continue to lean on the trendline and the 5100 support to keep pushing into new highs, while the sellers will look for a break below the support to extend the pullback into the next trendline around the 5000 level. The red lines define the average daily range for today. UPCOMING CATALYSTSTomorrow we get the latest US Jobless Claims figures and the third round of US-Iran talks. On Friday, we conclude the week with the US PPI report. This article was written by Giuseppe Dellamotta at investinglive.com.

In an exclusive interview with Reuters, former Bank of Japan chief, Haruhiko Kuroda expressed concerns about potential inflationary upswing coming from Takaichi's big spending plans and a weak yen. Kuroda is famous for leading the BoJ during the Abenomics era. He launched a massive monetary stimulus in 2013 in an attempt to bring Japan out of deflation. Now, Kuroda is calling for tighter monetary and fiscal policy as the economic context is the opposite of what he experienced in the last decade. "When Abenomics was deployed, Japan was suffering from deflation and a strong yen. Now, Japan is experiencing inflation and a weak yen. Japan needs to move toward tighter fiscal and monetary policy", he said. Kuroda added that he expects the BoJ to raise rates to around 1.50-1.75% in the coming years if the economy can sustain its momentum.As a reminder, the BoJ held interest rates steady as expected at the last policy meeting and upgraded slightly growth and inflation forecasts due to the expansionary fiscal policies. Governor Ueda didn’t offer anything new in terms of forward guidance as he just repeated that they will keep raising rates if the economic outlook is realised.He also added that April price behaviour will be a factor to mull over a rate hike. This suggests that April is when they expect to deliver another rate hike if the data supports such a move. The market is expecting the next hike in June at the earliest with a total of 47 bps of easing priced in by year-end.The rate hike expectations continue to be pushed further out amid easing Japanese inflation data and Takaichi's opposition for further tightening. Just yesterday, the yen weakened across the board after Mainichi reported that Prime Minister Takaichi expressed reservations about further rate hikes with BoJ Governor Ueda in their meeting last week.At the moment, it's hard to envision any change in monetary or fiscal policy in the near-term, so the markets will likely be sticking with the "Takaichi trade" (weak yen, higher bond yields and rising stock market). This article was written by Giuseppe Dellamotta at investinglive.com.

Prior 0.0%GDP Y/Y 0.4% vs 0.4% preliminaryPrior 0.3%No changes to the preliminary estimates. The German economy has been recovering gradually due to the expansionary fiscal policies and the ECB rate cuts. The momentum should hold in the first quarter given the strong data we had so far, unless there is a major slump in March. Economists expect the economy to grow about 1.0% in 2026, up from just 0.3% in 2025. This article was written by Giuseppe Dellamotta at investinglive.com.

The average tariff rate on U.S. imports jumped from 2.6% to 13% over the course of 2025, according to the Federal Reserve Bank of New York. On paper, that kind of increase should have pushed inflation higher. Instead, headline inflation actually eased from 2.9% year over year in December 2024 to 2.7% in December 2025. Core inflation, which excludes volatile food and energy prices, also slowed from 3.2% to 2.6%.Did tariffs somehow stop being inflationary?Not exactly. Although foreign exporters did not reduce prices enough to offset the tariffs, U.S. companies, concerned about losing market share, chose to absorb much of the impact, often sacrificing their profit margins to remain competitive rather than passing on the full increase to customers.But that shield appears to be cracking.December’s PCE report showed inflation picking up again, rising 0.4% month over month and 2.9% year over year. Core PCE also increased 0.4% on the month and 3% annually. Importantly, the acceleration was concentrated in core goods excluding food and energy, which climbed 0.4% month over month and 2% year over year. That suggests companies became more willing to pass tariff-related costs on to consumers in December.Inflation expectations are also worth watching. One-year expectations stood at 3.1% in January, while three- and five-year expectations remained at 3%, leaving room for further upside if price pressures continue to build. It is also worth noting that risk assets, including BTCUSD, remain under pressure, as higher inflation could keep the Fed tighter for longer. The same applies to gold and silver prices.What about the Supreme Court ruling declaring Trump's tariffs illegal?First, the decision concerned tariffs imposed under the International Emergency Economic Powers Act (IEEPA), which covered approximately 60% of the measures introduced. Other tariffs, such as those on steel, aluminum, copper (50%), automobiles and auto parts (25%), furniture (25%), and wood (10-25%), remain in effect.Second, even without the IEEPA, the Trump administration has other legal tools to impose tariffs. In fact, this Saturday, a 15% tariff was introduced under Section 122 of the Trade Act of 1974. In addition, the U.S. president can invoke Sections 201, 301, 338, and 232, each with its own legal requirements.What does this mean for investors?If December’s rebound in PCE wasn’t just a one-off, the Fed may adopt a more cautious approach to rate cuts, which could put additional pressure on markets. The silver lining is that if volatility intensifies, some argue we could see another TACO trade from the president. This article was written by IL Contributors at investinglive.com.

EUR/USD1.1900 (EUR 5.09 bn)1.1850 (EUR 2.19 bn)1.1800 (EUR 3.91 bn)1.1750 (EUR 1.82 bn)USD/JPY156.00 (US$ 2.92 bn)155.00 (US$ 1.80 bn)GBP/USD1.3550 (GBP 552.83 mn)1.3475 (GBP 448.12 mn)USD/CHF0.7790 (US$ 560.71 mn)0.7725 (US$ 787.67 mn)USD/CAD1.3650 (US$ 646.00 mn)AUD/USD0.7150 (AUD 1.45 bn)0.7100 (AUD 2.44 bn)0.7050 (AUD 1.17 bn)0.7000 (AUD 3.06 bn)NZD/USD0.5950 (NZD 358.26 mn)EUR/GBP0.8810 (EUR 404.08 mn)0.8625 (EUR 652.90 mn)WHAT ARE OPTION EXPIRIES?The FX option expiration price levels refer to the strike prices where option contracts are set to expire. These levels include both calls and puts.When you see "EUR/USD at 1.1600 for €4 billion" it means there is a total of €4 billion worth of options (calls + puts combined) that have a strike price of 1.1600 and are expiring at that specific time (the "New York Cut" at 10:00 AM ET).Traders watch these levels because they often act as a "magnet" for the price. For example, if there's nothing happening in the market and the price is close to the expiry level, let's say 30-50 pips away, what you will usually see is the price moving into the expiry level. This happens due to the hedging activity of the market makers (banks, dealers and so on).As the price gets closer to the strike price near expiration, these market makers must aggressively buy or sell the currency to hedge their risk. This hedging activity tends to suppress volatility and keep the price "pinned" close to the strike price until the expiration time passes.RELATED ARTICLES:For more information on how to use this data, you may refer to this post here. This article was written by Giuseppe Dellamotta at investinglive.com.

EUROPEAN SESSIONIn the European session, the only highlights are the final German Q4 GDP and the final Eurozone CPI report. The preliminary German Q4 GDP report beat expectations showing a 0.3% Q/Q growth. The preliminary Eurozone CPI figures saw headline CPI Y/Y coming at 1.7%, while the core CPI Y/Y printed at 2.2%. The final reports are rarely market-moving as traders react mostly to new information and especially the one that changes expectations. Today's data isn't going to change anything for the ECB. AMERICAN SESSIONIn the American session, we don't have much on the agenda other than a couple of low tier releases like the US MBA mortgage applications and Canadian wholesale sales. These aren't market-moving reports and they are not going to change anything for the respective central banks either. CENTRAL BANK SPEAKERS08:40 GMT/03:40 ET - RBA Governor Bullock (hawkish - voter)10:00 GMT/05:00 ET - ECB's Vijcic (neutral - voter)15:40 GMT/10:40 ET - Fed's Barkin (neutral - non voter)16:00 GMT/11:00 ET - Fed's Schmid (hawkish - non voter)18:40 GMT/13:40 ET - Fed's Musalem (hawkish - non voter)20:40 GMT/15:40 ET - RBA Governor Bullock (hawkish - voter) This article was written by Giuseppe Dellamotta at investinglive.com.

Trump says Iran advancing missile, nuclear programs despite negotiationsJapan govmt nominates new BOJ board members as rate-hike path comes into focusSOTU Trump: Says tariffs stay despite Supreme Court loss, pivots to new global levyNikkei hits record high as AI fears fade and yen weakensOil holds near seven-month highs ahead of US-Iran Geneva talks, EIA data awaitedAdvance excerpts of Trump's speech show its lacklusterJapan services inflation holds at 2.6%, keeping BOJ hike bias intactPBOC sets USD/ CNY mid-point today at 6.9321 (vs. estimate at 6.8824)Australia CPI beats estimates, lifting RBA hike odds and boosting Aussie dollarAustralian January CPI 3.8% y/y (expected 3.7%, prior 3.8%)Bloomberg: Harvard study finds AI predicts only 71% of active-fund tradesJapan’s Nikkei seen surging to 60,750, extending historic record-breaking runGoldman Sachs: Japan rally has further to run after Takaichi victorySNB sees inflation rising despite possible negative prints, ready to intervene in FX (CHF)Private survey inventory shows a huge headline crude oil build, much larger than expectedIn brief:Australian January CPI firm; core measures accelerateMay RBA hike odds rise; quarterly CPI still keyAUD strengthens on rate expectationsNikkei hits fresh record on tech rebound, softer yenJapan nominates two new BOJ board membersYen gives back gains after nomination headlinesTrump delivers record-length State of the UnionTariffs to remain despite Supreme Court rulingIndian equities see renewed foreign inflowsIt was another active session across Asia-Pacific, driven by impactful data and policy headlines.From Australia, January inflation printed on the firm side of expectations, reinforcing the case for further tightening from the Reserve Bank of Australia and lifting the Australian dollar. Headline CPI held at 3.8% y/y (vs 3.7% expected), while core measures firmed. The trimmed mean rose 0.3% m/m, pushing the annual pace to 3.4% from 3.3%. The weighted median also printed 0.3% m/m, holding at 3.6% y/y. At roughly a 3.5–3.6% annualised rate, underlying inflation remains well above the RBA’s 2–3% target band.Goods inflation accelerated to 3.8% y/y, while services eased slightly but stayed elevated at 3.9%. Markets lifted the probability of another hike in May. That said, the next RBA meeting is March 16–17. However, officials have repeatedly stressed the importance of quarterly CPI, and with the next print due April 29, it suggests policymakers may wait until then for broader confirmation. The Australian dollar rose on the release and has extended gains.In Japan, the Nikkei 225 climbed to a fresh record high, supported by a rebound in tech shares as AI-disruption fears eased and the yen softened. Separately, the government nominated Toichiro Asada and Ayano Sato as new Bank of Japan board members. The appointments could influence the pace of future rate hikes. While the board has leaned toward gradual tightening, Prime Minister Sanae Takaichi’s stance on no further rate hikes has drawn attention. The nominees’ policy leanings remain unclear. The yen initially slipped on the news but the move lacked follow-through.In the US, President Trump delivered the longest State of the Union address on record. While much was not market-sensitive, he reiterated that tariffs will remain in place despite the Supreme Court ruling, with the administration pivoting to Section 122 authority. He also addressed Iran, saying diplomacy remains preferred despite ongoing missile and nuclear concerns. Oil is a touch lower on Trump reiterating his preference for a diplomatic solution.Elsewhere, foreign inflows into Indian equities are on track to exceed domestic institutional buying for the first time in 17 months, aided by improving earnings momentum and more attractive valuations. This article was written by Eamonn Sheridan at investinglive.com.

Trump warned Iran is advancing missile and nuclear ambitions despite negotiations, demanding a clear pledge against nuclear weapons in a record-length State of the Union.Summary:Trump accuses Iran of advancing missile capabilitiesClaims Tehran pursuing longer-range systemsSays negotiations ongoing but incompleteSays he prefers diplomacy towards a solutionSeeks explicit renunciation of nuclear weaponsUS forces positioned in regionSpeech sets new length recordPresident Donald Trump used his State of the Union address to accuse Iran of continuing to pursue missile and nuclear capabilities, despite prior US efforts aimed at curbing its weapons programs.Speaking before a joint session of Congress, Trump said Tehran had already developed missiles capable of threatening Europe and US military installations overseas, and was now working on systems that could potentially reach the American mainland. He argued that previous warnings had failed to deter Iran from reviving elements of its weapons development agenda.The president said the United States remains engaged in negotiations with Tehran, which is his preference, but indicated dissatisfaction with the current state of talks. He suggested that while diplomacy is ongoing, he has not yet received what he described as a clear and definitive assurance that Iran would permanently forgo nuclear weapons development, a commitment he characterised as his preferred outcome.Trump’s remarks come at a time of heightened tension in the Middle East, with US forces positioned in the region and diplomatic channels active but fragile. The administration has repeatedly signalled that while it prefers a negotiated solution, it retains other options should talks fail to produce results.The speech also marked a procedural milestone: Trump set a new record for the longest State of the Union address in modern history, underscoring the breadth of topics covered, including foreign policy, trade, domestic security and economic strategy.Markets and foreign-policy observers will now watch closely for any tangible shifts in US-Iran negotiations, particularly whether rhetoric hardens further or gives way to more defined diplomatic benchmarks. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s latest BOJ nominations highlight how board composition could shape the pace of future rate hikes under Takaichi’s administration.Summary:Government nominates Toichiro Asada, Ayano Sato to the Bank of Japan monetary policy boardBoth appointments subject to parliamentary approvalChanges come amid gradual BOJ tighteningBoard balance key to future rate pathMarket wary of overt reflationist tiltMore vacancies due next yearJapan’s government has nominated Toichiro Asada and Ayano Sato as new board members of the Bank of Japan, in appointments that could influence the pace and tone of future interest rate decisions.Official documents show Asada, a professor emeritus at Chuo University, and Sato, a law professor at Aoyama Gakuin University, have been selected to fill two upcoming vacancies on the nine-member policy board. The nominations are expected to be submitted to parliament for approval shortly.The personnel changes come at a sensitive juncture for monetary policy. The BOJ has exited its long-running stimulus framework and raised rates to 0.75%, shifting toward a gradual tightening cycle as inflation holds above its 2% target. The board’s composition has increasingly tilted toward steady rate increases, but upcoming retirements give Prime Minister Sanae Takaichi scope to shape its future direction.One seat becomes vacant in March when Asahi Noguchi, often regarded as the board’s last prominent reflationist voice, steps down. Another opens in June with the retirement of Junko Nakagawa. Analysts had expected an academic to replace Noguchi and a female candidate to succeed Nakagawa, and the nominations appear broadly consistent with that pattern.Market participants are watching closely for signals about the administration’s tolerance for further rate hikes. Some observers had speculated that reflationist-leaning nominees could slow tightening, but others argue the government is unlikely to risk unsettling currency markets by appointing outspoken advocates of prolonged easing. With the yen sensitive to policy expectations, the administration may favour balance rather than confrontation.The appointments also provide an early glimpse into how Takaichi might approach two additional board vacancies next year, when more hawkish members are set to retire. Looking further ahead, she could eventually influence the selection of Governor Kazuo Ueda and his deputies when their terms expire in 2028.Ultimately, the new nominees’ individual policy leanings remain unclear. However, the reshuffle underscores how board composition, not just economic data, will shape the trajectory of Japan’s rate cycle.---Some background to this here:The Japanese Yen sinks as PM Takaichi signals opposition to further BoJ rate hikes This article was written by Eamonn Sheridan at investinglive.com.

Trump is reframing the Supreme Court tariff loss as a detour, not a derailment, as his team shifts the broad tariff base to Section 122 while keeping key sector and China-related tariffs intact.Summary:Trump addressed tariffs during his SOTU addressSupreme Court ruled IEEPA doesn’t authorise tariffs (Feb 20, 2026) White House pivoted to temporary global tariffs under Section 122 Rate set at 10% for 150 days; administration working toward 15% Many other tariffs (Section 232/301) remain intact Economists question “balance-of-payments crisis” rationale, raising fresh legal risk Refunds and trade-deal durability remain live issues Trump says tariffs stay despite Supreme Court setback — what changed, what didn’tIn his State of the Union address, President Donald Trump called the Supreme Court’s decision against his tariff program “very unfortunate,” but argued tariffs will remain in place, most countries want to keep existing trade deals, and Congress won’t need to act.The backdrop is a major legal loss for the White House on February 20, 2026, when the US Supreme Court ruled that the International Emergency Economic Powers Act (IEEPA) does not authorise the president to impose tariffs. The ruling invalidated a broad swathe of the administration’s emergency-tariff framework and immediately raised questions about refunds, deal continuity and the legal durability of the wider tariff agenda. Crucially, the administration moved quickly to keep a tariff “floor” in place. Within hours of the ruling, Trump issued a new order imposing a temporary global tariff under Section 122 of the Trade Act of 1974 — initially set at 10% for 150 days, with the White House subsequently working to lift the rate to 15% (the statutory ceiling). Section 122 is rarely used and is framed around “serious” balance-of-payments concerns; economists and legal specialists have questioned whether current US conditions meet that test, raising the risk of further litigation. Trump’s claim that tariffs “remain in place” is also helped by the fact that many other tariffs are unaffected by the IEEPA ruling, including Section 232 sector/national-security tariffs and Section 301 trade-action tariffs. In parallel, the administration has indicated it can pursue additional tariff probes under other statutory authorities, supporting the view that the tariff regime is being re-routed rather than dismantled. On trade deals, US officials have signalled that counterparties have not moved to walk away, but governments are watching closely for how the legal reset affects enforcement and timelines. The next market focus is whether Section 122 tariffs are maintained beyond the 150-day window (where congressional involvement can become relevant), and whether refund claims grow as court challenges evolve. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Japan’s Nikkei 225 climbed to a new record high on Wednesday, buoyed by a rebound in technology shares as concerns about artificial intelligence disruption eased and the yen weakened.The benchmark Nikkei rose 1.4% in early trade to 58,100 and above, surpassing its previous peak set earlier this month following Prime Minister Sanae Takaichi’s election victory. The broader Topix index advanced 0.3% to 3,800+ reflecting a more measured gain across the wider market.Technology and semiconductor-related stocks were the primary drivers of the move. Improved sentiment toward AI-linked names in the United States spilled over into Tokyo trading, encouraging investors to rotate back into previously pressured software and chip shares. The easing of global AI-related jitters appeared to support broader risk appetite, particularly in high-beta sectors.Shares of Nomura Research Institute surged as much as 9% before paring gains to trade around 6% higher after announcing new support services tied to Anthropic’s Claude AI platform and plans for deeper collaboration with the US-based lab. The development underscored the ongoing integration of generative AI into Japan’s corporate ecosystem.Currency moves also provided support. The Japanese yen weakened against the dollar early during the session, offering a tailwind to exporters and index heavyweights, though it later retraced part of the decline.Separately, a report suggested Prime Minister Sanae Takaichi had conveyed reservations about further rate hikes during discussions with Bank of Japan Governor Kazuo Ueda. Any perception of a slower pace of monetary tightening would likely be welcomed by equity investors, particularly given the market’s strong run.Market breadth was moderately positive, with 120 gainers versus 105 decliners on the Nikkei.The move highlights the confluence of supportive global tech sentiment, currency dynamics and domestic policy signals underpinning Japan’s equity rally. ---Meanwhile, Trump has begun his State of the Union address. Apparently its going to be two hours long and the excerpts I've seen don't have much for markets at all:Advance excerpts of Trump's speech show its lackluster This article was written by Eamonn Sheridan at investinglive.com.

Oil is pinned near seven-month highs as traders weigh US-Iran diplomacy against conflict risk and a potentially heavy US crude stock build.Summary:Brent/WTI hover near seven-month highsUS-Iran talks slated Thursday in GenevaConflict risk sustains a risk premiumIran remains key OPEC producerAPI shows big crude buildGasoline/distillates reportedly declinedEIA data due WednesdayOil prices hovered near seven-month highs on Wednesday as traders balanced the risk of a US-Iran military escalation against hopes that renewed diplomacy could ease supply fears. Brent and WTI were both up around 0.6% on the session, holding close to recent peaks set late last week for Brent and earlier this week for WTI. The market’s resilience reflects an elevated geopolitical risk premium. The United States has been positioning military forces in the Middle East to pressure Iran into negotiations over its nuclear and ballistic missile programs, keeping investors alert to a disruption scenario. Iran is the third-largest crude producer in OPEC, and any broader conflict risked spillovers across a region that accounts for a large share of global oil supply. Attention now turns to a third round of talks scheduled for Thursday in Geneva, where US envoys Steve Witkoff and Jared Kushner are expected to meet an Iranian delegation. Iranian Foreign Minister Abbas Araqchi signalled a deal could be achievable if diplomacy remains the priority, but uncertainty persists over whether Iran will meet the US “zero enrichment” red line. Geopolitical nerves have also been sharpened by reports that Iran has accelerated discussions with China about acquiring anti-ship cruise missiles, which analysts say could enhance Iran’s ability to threaten US naval forces operating near its coastline. Against that backdrop, fundamentals are sending a mixed signal. Market participants are wary that global supply may be running ahead of demand, and overnight US inventory data from the American Petroleum Institute showed a large crude build of 11.43 million barrels for the week ended Feb. 20, even as gasoline and distillate stocks fell. Official EIA data is due later Wednesday and could influence near-term price direction. This article was written by Eamonn Sheridan at investinglive.com.

Generic and non specific comments on investment and manufacturing (manufacturing jobs are lower so far under Trump!).He does mention lower drug prices.Whole stack of stuff not of relevance to markets. Excerpts provided by WSJ (gated). His central economic policy has collapsed. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s services inflation stayed sticky at 2.6%, reinforcing wage pass-through risks and keeping the BOJ on a tightening bias.Summary:Corporate services prices +2.6% y/y in January, unchanged from December's 2.6%Construction and temp staffing drove increasesGauge supports view of wage-driven inflation persistenceBOJ ended stimulus in 2024Policy rate lifted to 0.75% in DecemberNext hike timing hinges on wage pass-throughJapan’s services-sector inflation held steady in January, reinforcing the Bank of Japan’s view that wage-driven cost pressures are still filtering through the economy and keeping the door open to further rate hikes.The corporate services price index (often viewed as a leading gauge of services inflation) rose 2.6% year-on-year in January, unchanged from December, according to Bank of Japan data. The index tracks the prices firms charge each other for services, offering a timely read on whether higher labour costs are being passed along through service supply chains. The January increase was led by higher charges for construction-related services and temporary staffing, both areas that tend to be sensitive to labour-market tightness and wage trends. With Japan still facing capacity constraints in parts of the workforce, the steady print suggests price-setting behaviour remains consistent rather than easing quickly.The data lands in a policy environment that has shifted meaningfully since the BOJ exited its decade-long stimulus framework in 2024. The central bank lifted short-term interest rates to 0.75% in December as it judged Japan was moving toward durably achieving its 2% inflation goal. Consumer inflation has now been above 2% for nearly four years, and the BOJ has signalled it is prepared to keep tightening if inflation continues rising in a steady way alongside sustained wage gains. Governor Kazuo Ueda has emphasised close monitoring of whether companies continue passing on higher labour costs, as that transmission mechanism is central to deciding the timing of the next move. A steady services-price signal at 2.6% supports the narrative that wage pressures remain present, even if the pace is not accelerating, and will keep markets sensitive to upcoming wage and price indicators.There may be a hiccup in the rate hike path though:The Japanese Yen sinks as PM Takaichi signals opposition to further BoJ rate hikes This article was written by Eamonn Sheridan at investinglive.com.

The PBOC allows the yuan to fluctuate within a +/- 2% range, around this reference rate. PBOC injects 409.5bn yuan via 7-day reverse repos at 1.4% in open market operations today.more to come This article was written by Eamonn Sheridan at investinglive.com.

Firm January inflation keeps the RBA on a tightening footing, lifting May hike expectations and supporting the Australian dollar.Summary:Headline CPI 0.4% m/m; 3.8% y/yTrimmed mean 3.4% y/y, above forecastsGoods inflation firm; services still elevatedHousing major contributorMay hike odds increasedSeparately, construction data weakAustralia’s January inflation data came in on the firm side of expectations, reinforcing the case for further tightening from the Reserve Bank of Australia and lifting the Australian dollar.Figures from the Australian Bureau of Statistics showed monthly CPI rose 0.4% in January, easing from December’s 1.0% surge but above the 0.3% forecast. The annual pace held at 3.8%, slightly above expectations of 3.7%. More importantly for policymakers, core measures accelerated.The trimmed mean rose 0.3% in the month, taking the annual rate to 3.4% from 3.3%, ahead of consensus. The weighted median measure also increased 0.3% month-on-month, leaving the annual pace at 3.6%. At roughly a 3.5–3.6% annualised rate, underlying inflation remains well above the RBA’s 2–3% target band.Price pressures were broad. Housing costs climbed 6.8% year-on-year, food and non-alcoholic beverages rose 3.1%, while recreation and culture increased 3.7%. Goods inflation accelerated to 3.8% annually, while services inflation eased slightly but remained elevated at 3.9%. Excluding volatile items and holiday travel, domestic components such as rents and new dwelling costs showed ongoing strength.Markets interpreted the data as strengthening the case for another near-term hike, with rate probabilities rising for May. Having already lifted rates this month in response to building price momentum late last year, the RBA faces little evidence of a meaningful slowdown in underlying inflation. The monthly data, while more volatile than quarterly prints, add to the sense that price pressures remain persistent.The Australian dollar firmed following the release as traders priced in a higher terminal rate outlook.Separately, fourth-quarter construction work done disappointed, falling 0.1% quarter-on-quarter against expectations for a solid rise. The weak construction figure may weigh modestly on GDP growth, but for now inflation dynamics appear to be dominating the policy narrative.Overall, the data suggest inflation remains sticky, keeping the RBA on a tightening path despite pockets of softness in activity.--RBA 2026 dates. March is the next opportunity for a rate hike, and with such data, why not? Still, the RBA tells us they are wiaiting on quarterly inflation data as confirmation. They are a timid bunch. This article was written by Eamonn Sheridan at investinglive.com.

This is just a post for data, I'll have details and analysis posted separately. Here we go, added:Australia CPI beats estimates, lifting RBA hike odds and boosting Aussie dollarBackground:Australia January CPI preview: core inflation steady, electricity lifts headline 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.

Harvard-led research suggests AI can replicate most active-fund trading patterns, leaving true alpha concentrated in a smaller set of non-routine decisions.Summary:AI model predicted 71% of fund tradesNeural network trained on 1990–2023 dataUnpredictable trades linked to outperformanceRoutine activity appears systematicLarger, competitive funds less predictableActive-fee justification under scrutiny(ps. I bolded the really interesting part below)A new academic study led by researchers at Harvard Business School suggests that much of active fund management follows patterns sophisticated algorithms can learn, raising fresh questions about the value of stock-picking fees.The working paper, titled Mimicking Finance and published via the National Bureau of Economic Research, uses a neural-network model trained on rolling five-year windows between 1990 and 2023. Drawing on fund characteristics, investor flows, stock attributes and macroeconomic data, the system was able to predict roughly 71% of mutual fund trading decisions, whether a manager would buy, sell or hold a stock over a given quarter.The findings suggest that a large share of day-to-day portfolio adjustments reflects systematic responses to flows, market signals and peer positioning rather than purely idiosyncratic insight. In effect, machines appear capable of replicating much of the industry’s common playbook.However, the study’s most revealing insight lies in what the model could not anticipate. The remaining 29% of trades, those that departed from detectable patterns, were more closely associated with outperformance. That implies that genuine alpha may reside in the smaller set of non-routine decisions that deviate from formulaic behaviour.The authors argue that machine-learning tools are better suited than traditional linear factor models to capture the complex ways managers react to shifting conditions. Yet the model predicts trade direction, not size, and further refinements are planned.Predictability also varies across managers. Larger funds, higher-fee strategies and teams operating in more competitive environments tended to be less predictable, while longer-tenured managers or those overseeing multiple products were more so.For the active management industry, already under pressure from low-cost passive products tracking benchmarks such as the S&P 500, the implications are economic rather than existential. If most routine trades can be anticipated algorithmically, fee justification may increasingly hinge on the narrower slice of genuinely discretionary decisions that deliver excess returns.The study underscores a broader distinction: while predicting market moves remains notoriously difficult, predicting professional behaviour may be far easier.Source: Bloomberg (gated) This article was written by Eamonn Sheridan at investinglive.com.