Japan signalled heightened market vigilance while playing down recent bond market stress.Summary:Japan monitoring markets closely amid ongoing volatilityFinance minister says bond market rout has easedDetails of proposed sales tax cut not yet decidedOngoing communication with US Treasury officialsAuthorities stress importance of market dialogueJapan’s government signalled heightened vigilance over financial market conditions on Friday, as Finance Minister Satsuki Katayama acknowledged recent instability across both global and domestic markets while seeking to reassure investors that stress in the bond market has begun to ease.Speaking at a press conference, Katayama said authorities are monitoring market developments with a “high sense of urgency,” reflecting ongoing volatility in interest rates, currencies and risk assets. While noting that conditions remain unsettled, she said the sharp sell-off that recently hit the Japanese government bond market appears to have receded, offering some relief after a period of rising yields and thinning liquidity.Katayama stressed the importance of maintaining close and continuous communication with financial markets, underlining the government’s desire to avoid disorderly moves. Her comments come as Japan navigates a delicate policy environment, with investors increasingly sensitive to fiscal signals, bond supply dynamics and the trajectory of monetary normalisation.On fiscal policy, the finance minister said details surrounding a proposed sales tax cut have yet to be finalised. The lack of clarity keeps markets alert to the risk of expansionary fiscal measures at a time when public debt levels are already elevated and long-term yields have been testing multi-decade highs. Any move to cut consumption taxes without a clear funding plan could revive concerns around Japan’s fiscal outlook and debt sustainability.Katayama also confirmed that Japan has been in regular contact with US officials, including ongoing communication with Scott Bessent, highlighting the importance of international coordination amid volatile global markets. The dialogue underscores shared concerns around market stability, capital flows and the spillover effects of policy decisions in major economies.The comments follow a period of sharp moves in Japanese bonds, with long-dated yields rising rapidly as investors reassessed fiscal risks and the pace of policy normalisation by the Bank of Japan. While recent price action suggests some stabilisation, the broader backdrop remains fragile, particularly as markets weigh the interaction between looser fiscal policy and tighter monetary settings.Overall, the finance minister’s remarks were aimed at striking a balance between acknowledging ongoing risks and calming market nerves. By emphasising dialogue, monitoring and international coordination, Japanese authorities appear focused on preventing renewed disorder in bonds and spillovers into currency and equity markets, even as policy uncertainty continues to cloud the outlook.Still ahead:Economic and event calendar in Asia 23 January 2026; BOJ decision dayBOJ signals readiness for more rate hikes as yen weakness fuels inflation risksBoJ preview: Will the central bank intervene in the bond market and sink the yen? This article was written by Eamonn Sheridan at investinglive.com.

New research shows Warren Buffett’s success stemmed from investing in quality businesses with strong intangible moats, not from buying cheap stocks.The full article is here, a great read:Warren Buffett Was Never Just a Value Investor. Here’s the Real Secret to His Investing Success Data shows Buffett beat markets by investing in quality, not cheap stocks. but Ive summarised below:-Summary:Buffett’s returns were driven more by quality than cheap valuationsResearch shows most outperformance explained by systematic factorsIntangible assets like brands and IP were central to successTraditional price-to-book value played a smaller roleBuffett anticipated factor-based investing decades earlyAfter six decades at the helm of Berkshire Hathaway, Warren Buffett stepped down at the end of 2025, leaving behind one of the most extraordinary track records in financial history. An investment of $100 in Berkshire in 1965 would have grown to roughly $5.5 million, dwarfing the roughly $39,000 generated by the broader US equity market over the same period. While Buffett is often described as a traditional value investor, new research suggests that characterisation misses the real source of his success. A July 2025 study by Sparkline Capital’s Kai Wu shows that Buffett’s returns were driven far more by exposure to quality businesses with durable competitive advantages than by buying statistically “cheap” stocks. Examining Buffett’s major holdings from 1978 to 2024, the research found that only a small fraction traded below book value at the time of purchase. Instead, Buffett consistently paid premiums for companies with strong brands, pricing power, and long-term growth potential.This shift reflects Buffett’s evolution alongside the economy itself. In the early part of his career, when tangible assets dominated corporate value, buying below book value made sense. As economies moved toward consumer brands and later technology-driven business models, Buffett adapted. Investments such as Coca-Cola and later Apple were made at valuations far above traditional value metrics, yet delivered exceptional long-term returns as intangible assets such as brand equity, intellectual property and ecosystem dominance compounded over time.Wu’s analysis decomposed Buffett’s performance using factor-based techniques and found that most of his outperformance can be explained systematically. Exposure to high-quality companies accounted for a large share, while a separate “intangible value” factor — capturing investment in brands, innovation and human capital — explained another significant portion. Traditional value metrics contributed far less than commonly assumed. Once these factors are accounted for, Buffett’s residual stock-picking “alpha” shrinks dramatically, particularly in recent decades.Rather than diminishing Buffett’s legacy, the findings elevate it. Buffett recognised the rising importance of intangible moats long before they were formalised in academic research and implemented the approach at scale for decades. His real achievement was not mystical stock-picking ability, but the disciplined application of a framework that consistently favoured durable competitive advantages.For investors today, the implication is powerful. Buffett’s philosophy can be approximated systematically through portfolios tilted toward quality and intangible strength, without needing Berkshire’s scale or individual stock insight. His enduring legacy is not a list of holdings, but a repeatable way of thinking about value in a modern, asset-light economy. This article was written by Eamonn Sheridan at investinglive.com.

The PBOC follows a managed floating exchange rate system that allows the value of the yuan to fluctuate within a +/- 2% range, around a central reference rate, or "midpoint." The rate set under 7 today for the first time since May 2023. Previous close 6.9672PBoC injects 125bn yuan through 7-day reverse repos at 1.40%.Earlier:ICYMI - PBOC Governor signals further rate and RRR cuts This article was written by Eamonn Sheridan at investinglive.com.

TikTok secured its US future by restructuring ownership and control to satisfy national security concerns.Summary:TikTok creates new US venture to avoid nationwide banOracle, Silver Lake and MGX to manage the US entityDeal resolves years of national security scrutinyFollows 2024 US law mandating divestment or banRemoves major uncertainty over TikTok’s US operationsTikTok has reached a landmark agreement to restructure its US operations, establishing a new venture that places control of key elements of its American business in the hands of non-Chinese investors and management. The deal brings to an end a prolonged regulatory standoff that threatened a nationwide ban of the short-video platform in the United States.Under the arrangement, TikTok and its parent company ByteDance have created a US-based entity that will house parts of TikTok’s American operations. Management and oversight of the new venture will be led by Oracle, alongside private equity firm Silver Lake and Abu Dhabi-backed investment group MGX. The structure is designed to address long-standing US national security concerns by ensuring that sensitive operations are controlled by entities outside China.The agreement effectively resolves regulatory uncertainty triggered by US legislation passed in 2024, which required ByteDance to divest TikTok’s US business or face an outright ban. Lawmakers and regulators had argued that TikTok’s Chinese ownership posed risks related to data security and potential foreign government influence. ByteDance and TikTok have consistently rejected those claims, maintaining that US user data has not been misused and that the platform does not operate under the direction of Beijing.By transferring operational control to US-aligned partners, the new structure allows TikTok to continue operating in its largest overseas market while satisfying the core demands of regulators. Oracle’s role is expected to be central, particularly in relation to data governance, infrastructure and oversight, building on its existing involvement as a cloud and data-security partner for TikTok in the US.For investors and advertisers, the deal removes a major overhang that has weighed on TikTok’s US business for several years. The platform’s future had remained uncertain amid repeated legal challenges, political scrutiny and the looming threat of enforcement action. With a new governance framework in place, TikTok can refocus on growth, monetisation and competition with US-based rivals in the social media and digital advertising space.More broadly, the agreement highlights how geopolitical tensions are reshaping the global technology landscape, forcing companies to adapt ownership and governance structures to comply with national security priorities. TikTok’s US venture may now serve as a template for how foreign-owned technology platforms navigate increasingly fragmented regulatory environments. This article was written by Eamonn Sheridan at investinglive.com.

Japan’s inflation cooled in December but remained well above target, keeping expectations of further BOJ tightening alive.Summary:Core CPI slowed to 2.4% y/y in December, in line with forecastsBase effects from energy prices drove the decelerationCore-core inflation held firm at 2.9% y/yBOJ expected to keep rates steady at 0.75%Inflation backdrop supports gradual policy normalisationJapan’s core consumer inflation slowed in December but remained comfortably above the central bank’s 2% target, reinforcing expectations that monetary policy will continue to normalise gradually even as near-term price pressures ease. Official data showed the core consumer price index, which excludes volatile fresh food costs, rose 2.4% year-on-year in December, matching market expectations and slowing sharply from November’s 3.0% pace.The moderation largely reflected base effects linked to energy prices. A year earlier, inflation had been boosted by the expiration of government fuel subsidies, creating a high comparison point that mechanically dragged on annual price growth in December. As a result, the latest slowdown appears more technical than demand-driven, suggesting underlying inflation pressures remain intact.That view was reinforced by measures of underlying inflation. The CPI index excluding both fresh food and fuel — often referred to as “core-core” inflation and closely monitored by the Bank of Japan — rose 2.9% year-on-year in December, easing only marginally from 3.0% previously. The persistence of this measure above target points to continued price momentum across domestically driven components such as services and labour-intensive sectors.The inflation data arrive just ahead of the BOJ’s latest policy decision, with the central bank widely expected to keep its policy rate unchanged at 0.75% at the conclusion of its two-day meeting. Policymakers are nonetheless expected to reiterate their readiness to raise rates further should inflation and wage dynamics remain supportive. The BOJ ended its decade-long ultra-loose policy framework in 2024 and has since raised interest rates in several steps, including in December, on the assessment that Japan is making sustained progress toward achieving its inflation goal.While headline inflation has cooled from recent highs, the broader economic backdrop continues to support a cautious tightening bias. Japan’s economy has shown signs of moderate recovery, wage growth has improved, and firms have continued to pass higher costs through to consumers. At the same time, policymakers remain mindful of downside risks from global growth uncertainty and financial market volatility.Overall, the December CPI report supports the BOJ’s current approach: pausing in the near term while maintaining a clear bias toward further tightening if underlying inflation remains above target. The data suggest inflation pressures are easing only gradually, leaving the door open for additional rate hikes later this year should domestic price momentum prove durable.Reminder, the Bank of Japan decision is due today:Economic and event calendar in Asia 23 January 2026; BOJ decision dayBOJ signals readiness for more rate hikes as yen weakness fuels inflation risksBoJ preview: Will the central bank intervene in the bond market and sink the yen? This article was written by Eamonn Sheridan at investinglive.com.

Japan’s flash PMI data point to a strong start to 2026, with growth broadening beyond services into manufacturing.Summary:Composite PMI hit a 17-month high in JanuaryServices activity led gains, manufacturing returned to growthExport orders rose for first time in yearsBacklogs surged, lifting hiring to a multi-year highCost pressures and price inflation remained elevatedBefore we get on with it, don't forget what's ahead:Economic and event calendar in Asia 23 January 2026; BOJ decision dayBOJ signals readiness for more rate hikes as yen weakness fuels inflation risksBoJ preview: Will the central bank intervene in the bond market and sink the yen?Japan’s private sector recorded its strongest expansion in nearly a year and a half at the start of 2026, according to the latest flash PMI data from S&P Global, pointing to broad-based momentum across services and a long-awaited return to growth in manufacturing.The headline Flash Japan Composite PMI Output Index rose to 52.8 in January from 51.1 in December, marking the fastest pace of expansion since August 2024 and extending the current growth run to ten consecutive months. The improvement was driven primarily by the services sector, where activity accelerated sharply, but was also supported by the first increase in manufacturing output in seven months.The Services PMI Business Activity Index climbed to 53.4 from 51.6, reflecting stronger demand conditions and the steepest expansion since mid-2025. Manufacturing also surprised to the upside, with the PMI rising to 51.5 from 50.0, above expectations and signalling a return to expansion. Manufacturing output moved back into growth territory at 51.2, ending a prolonged contraction and pointing to early signs of stabilisation in the industrial sector.Demand indicators strengthened alongside activity. Composite new business rose at its fastest pace since May 2024, supported by a pickup in both domestic and overseas orders. Foreign demand increased for the first time since March last year, with services firms reporting stronger inbound demand and manufacturers recording their first rise in export orders in almost four years — a notable development for Japan’s externally exposed economy.Rising workloads quickly translated into capacity pressures. Outstanding business volumes rose at the fastest pace since the composite series began in 2007, driven by solid backlogs growth in services and the first increase in manufacturing backlogs in more than three years. Firms responded by lifting hiring, with overall employment growth the strongest since April 2019 and gains recorded across both sectors.Inflation signals remained firm. Although the pace of input cost inflation eased slightly from December’s recent peak, it remained historically elevated. Manufacturing firms faced renewed cost pressure, while services companies saw some moderation. Selling prices increased at the fastest pace in 20 months, highlighting persistent pricing power across the private sector.Despite the strong start to the year, business confidence softened. Expectations for output over the next 12 months slipped to the lowest level since October, reflecting concerns around rising costs, labour shortages, demographic pressures and global economic uncertainty. Overall, the data suggest Japan entered 2026 with improving growth momentum, but with inflation and capacity constraints remaining key challenges. This article was written by Eamonn Sheridan at investinglive.com.

UK consumer morale improved slightly in January, but confidence in the broader economy remains deeply negative.Summary:UK consumer confidence rose to a five-month high in JanuaryHouseholds more positive on personal financesEconomic outlook confidence deteriorated furtherGrowth sluggish as inflation and wage trends remain mixedConsumers remain cautious on spendingUK consumer confidence improved modestly in January, reaching its strongest level in several months as households became more optimistic about their own financial prospects, even as concerns about the broader economy remained entrenched. According to the latest survey from GfK, the headline consumer confidence index rose one point to -16, marking the highest reading since August 2024 and matching economists’ expectations.Despite the uptick, sentiment remains firmly negative by historical standards. GfK noted that the index has not been in positive territory for a decade, underscoring the depth and persistence of household caution since the UK’s decision to leave the European Union. The January improvement was uneven, with three of the five underlying confidence measures deteriorating over the month.The survey pointed to a growing divergence between perceptions of personal finances and views on the wider economic outlook. Expectations for household finances over the next 12 months improved noticeably, rising four points to +6, suggesting consumers feel better placed to manage their own budgets. In contrast, confidence in the economic outlook weakened further, with the forward-looking measure falling two points to -31, highlighting ongoing scepticism about the UK’s growth trajectory.The data come against a mixed macroeconomic backdrop. UK economic growth has remained sluggish, inflation ticked higher last month for the first time since mid-2025, and wage growth has shown signs of cooling. However, Bank of England Governor Andrew Bailey has indicated that inflation is likely to return close to the central bank’s 2% target by April or May, offering some reassurance on the inflation outlook.Retail conditions remain fragile. Official data due later on Friday is expected to show a modest decline in December retail sales, reinforcing concerns that consumer spending remains under pressure despite improved confidence in personal finances. The survey results suggest households are increasingly focused on what they can control — spending, saving and debt management — while remaining wary of broader economic and political uncertainties.Overall, the January data point to tentative stabilisation in consumer sentiment rather than a meaningful turnaround. While improved perceptions of personal finances are a positive sign, the persistent gloom surrounding the wider economy suggests UK consumers are likely to remain cautious, limiting the scope for a strong consumption-led recovery in the near term. This article was written by Eamonn Sheridan at investinglive.com.

Before we get on with explaining the fixing, check this out:ICYMI - PBOC Governor signals further rate and RRR cuts as China keeps loose policy stance---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.

The EU signalled progress on a Ukraine recovery framework while flagging greater Arctic security investment and readiness for potential trade tensions.Summary:EU close to unified prosperity framework with US and UkraineDeal aims to coordinate funding for Ukraine’s recoveryEurope to step up focus on Arctic security and cooperationDefence spending surge to support Arctic-ready capabilitiesEU says it is prepared if new tariffs are imposedEuropean Commission President Ursula von der Leyen said the European Union is close to reaching a unified agreement with the United States and Ukraine on a single prosperity framework aimed at supporting Ukraine’s long-term recovery, signalling progress toward closer transatlantic coordination on post-war reconstruction.Speaking at a press conference, von der Leyen said negotiations are advancing toward a common structure that would align European and US financial support with Ukraine’s reform and rebuilding priorities. A unified framework would help streamline funding, reduce duplication, and provide greater certainty for private-sector investment as Ukraine transitions from emergency support toward reconstruction and economic normalisation.Alongside the Ukraine recovery initiative, von der Leyen outlined a broader push to strengthen Europe’s security posture in the Arctic. She said the EU will continue to deepen its engagement on Arctic security, including stepped-up investment in Greenland and increased cooperation with regional partners. The comments come amid rising geopolitical competition in the Arctic, driven by climate change, expanding shipping routes and heightened strategic interest from major powers.Von der Leyen said Europe should make greater use of its expanding defence budgets to invest in Arctic-ready capabilities, including equipment suited to extreme weather, surveillance, and infrastructure resilience. She framed the defence spending surge across Europe as an opportunity not only to bolster conventional security but also to address emerging vulnerabilities in northern regions.On trade, the Commission President said Europe remains well prepared should new tariffs be imposed, underlining that the bloc has measures ready to respond if necessary. While she did not outline specific countermeasures, the remarks signal continued sensitivity around global trade tensions and the potential spillover into European growth and industrial policy.Taken together, the comments highlight a strategic effort by the European Union to link security, economic resilience and geopolitical positioning. Progress on a joint prosperity framework for Ukraine underscores the EU’s intent to anchor reconstruction within a transatlantic framework, while the renewed focus on Arctic investment reflects a widening definition of European security that extends beyond traditional theatres. The messaging points to a more integrated approach to defence, trade preparedness and long-term economic strategy. This article was written by Eamonn Sheridan at investinglive.com.

Rising focus on funding flows highlights deeper risks to US fiscal sustainability than headline “sell US” trades suggest.Summary:PBOC adviser flagged risks around US fiscal sustainabilityUBS says “sell US” narratives miss the real issueFiscal crises stem from lost funding inflows, not mass sellingUS more exposed due to reliance on foreign capitalJapan less vulnerable given domestic funding baseConcerns around US fiscal sustainability are resurfacing in global markets, with growing emphasis on funding dynamics rather than outright asset liquidation. Yesterday’s commentary from a senior adviser linked to the People's Bank of China warned that rising US deficits and debt issuance risk straining confidence among global investors, particularly at a time when geopolitical tensions and trade frictions are reshaping capital flows. The message was clear: sustained reliance on external funding leaves the US increasingly exposed to shifts in global appetite for dollar assets.New analysis from UBS reinforces that view, pushing back against simplistic narratives around “sell US” trades. UBS argues that fiscal crises are rarely triggered by mass selling of existing debt holdings. Instead, the real danger lies in reduced inflows, a slowdown or withdrawal of marginal buyers willing to fund ongoing deficits. In that sense, the focus on bond sell-offs misses the underlying vulnerability.Historical precedents underline the point. The UK’s 2022 gilt crisis under Liz Truss and the Greek sovereign crisis a decade earlier were not driven by wholesale liquidation of government bonds, but by a sudden evaporation of funding. When investors became unwilling to roll or absorb new issuance at prevailing prices, yields surged and confidence collapsed, forcing abrupt policy reversals.This distinction matters acutely for the United States. Unlike Japan, which relies heavily on domestic savings to fund government debt, the US depends significantly on foreign capital inflows to finance persistent fiscal shortfalls. A sustained reduction in overseas demand, whether due to political risk, concerns over long-run debt trajectories, or portfolio reallocation, could exert upward pressure on yields even without active selling by existing holders.Japan, by contrast, remains largely domestically financed, giving it greater insulation from sudden shifts in global funding sentiment despite its high debt-to-GDP ratio. That contrast helps explain why market stress can emerge more abruptly in economies dependent on external financing.Taken together, the PBOC-linked warning and UBS analysis highlight a shared theme: fiscal sustainability risks crystallise when confidence in future funding weakens. For the US, the risk is less about an immediate bond market revolt and more about whether global investors remain willing to continuously fund expanding deficits at acceptable prices — a question that is likely to grow more prominent as issuance rises and global financial conditions tighten. Don't press, we are a long way from this. This article was written by Eamonn Sheridan at investinglive.com.

Data only on this post. I'll post more detail separately. ...Here go, detail and analysis here:Japan core inflation slows but stays above BOJ target---Preview is here from earlier.Still ahead, BoJ:BOJ signals readiness for more rate hikes as yen weakness fuels inflation risksBoJ preview: Will the central bank intervene in the bond market and sink the yen? This article was written by Eamonn Sheridan at investinglive.com.

New Zealand inflation edged above target in Q4, reinforcing the RBNZ’s decision to pause further rate cuts.Summary:Q4 CPI rose 0.6%, lifting annual inflation to 3.1%Outcome exceeded market and RBNZ expectationsDomestic costs led gains, including power, rents and ratesNon-tradeable inflation remained elevated at 3.5%Data supports RBNZ’s signal that easing cycle is endingNew Zealand inflation picked up in the December quarter, pushing annual price growth slightly above the central bank’s target band and reinforcing the Reserve Bank’s recent decision to signal an end to its easing cycle. Data from Statistics New Zealand showed consumer prices rose 0.6% over the quarter, lifting annual inflation to 3.1%. Both outcomes came in marginally above market expectations.The acceleration was driven largely by domestic cost pressures rather than imported inflation. Electricity prices, local authority charges and housing rents were the main contributors to the quarterly increase, underscoring ongoing stickiness in household costs. While inflation remains well below its 2022 peak, the data marked another sequential rise, highlighting that disinflation has stalled in recent quarters.The result exceeded the Reserve Bank of New Zealand’s November forecast, which had pencilled in annual inflation at 2.7% for the quarter. At that meeting, the RBNZ signalled that the bulk of monetary easing had likely run its course, citing tentative signs of economic recovery alongside inflation sitting at the top of its target range. The central bank has delivered 325 basis points of rate cuts since August 2024, including a 25bp reduction at its most recent meeting, taking the cash rate to 2.25%.A key area of focus in the data was non-tradeable inflation, which rose at an annual pace of 3.5%. Non-tradeable inflation captures prices driven mainly by domestic factors such as housing, utilities, council rates and local services, rather than global supply chains or exchange rates. It is closely watched by the RBNZ because it provides a clearer signal of underlying inflation persistence and domestic demand pressures. Elevated non-tradeable inflation suggests price pressures remain embedded within the local economy, making inflation harder to bring sustainably back to target.Looking ahead, policymakers face a more complex backdrop. Global uncertainty around US trade policy and ongoing geopolitical tensions continue to influence inflation expectations, while domestic political dynamics are also coming into focus following the announcement of a general election later this year. With inflation now edging above target and core domestic pressures proving sticky, the latest CPI report strengthens the case for the RBNZ to remain firmly on hold in the near term as it assesses whether inflation will ease back toward 2% as expected. This article was written by Eamonn Sheridan at investinglive.com.

Australia’s flash PMIs point to a strong start to 2026, with growth accelerating while price pressures ease.Summary:Composite PMI surged to a joint-highest level since April 2022Manufacturing and services both recorded faster growthExport demand strengthened, led by manufactured goodsInput and output price inflation eased furtherBusiness optimism dipped despite strong activityAustralia’s private-sector activity accelerated sharply at the start of 2026, with the latest flash PMI data pointing to broad-based momentum across both manufacturing and services. The headline S&P Global Flash Australia Composite PMI rose to 55.5 in January from 51.0 in December, marking a sixteenth consecutive month of expansion and the strongest reading since April 2022, matched only by August 2025.The improvement reflected faster growth in both major sectors. Manufacturing PMI edged higher to 52.4 from 51.6, while the Services PMI jumped to 56.0 from 51.1, highlighting a strong rebound in activity following a softer end to last year. Panellists reported quicker expansions in new business, supported by customer base growth and successful business development initiatives.External demand also provided a lift, particularly for manufacturers. Survey data showed a renewed rise in overseas orders, driving the fastest expansion in total export business in more than three years. Stronger demand led firms to increase staffing levels in January as they sought to manage higher workloads, although the pace of hiring slowed slightly compared with December due to softer employment growth in the services sector.The combination of stronger new orders and a moderation in job creation resulted in a modest rise in outstanding work, the first increase in backlogs in nine months. While the build-up was limited, it nonetheless signals emerging capacity pressures as activity levels improve.On the inflation front, price pressures showed further signs of easing. Input costs continued to rise, but the rate of inflation fell to a 14-month low, driven by slower cost increases in the services sector. This partially offset firmer input cost pressures among manufacturers, where rising demand, higher purchasing activity and lingering supply constraints pushed goods input prices to their fastest pace in nine months. Output price inflation also softened, allowing firms to raise selling prices at a slower pace than at the end of 2025.Business sentiment remained positive overall, with the Future Output Index staying above the expansion threshold. However, optimism slipped to a 15-month low as concerns around competition and geopolitical uncertainty weighed on confidence, particularly in services. The data suggest Australia’s economy entered 2026 with solid momentum, but with emerging risks to confidence worth monitoring. This article was written by Eamonn Sheridan at investinglive.com.

China’s central bank signalled sustained policy support into 2026, reinforcing expectations of further easing to stabilise growth.Summary:PBOC confirms moderately loose policy stance for 2026Further RRR and interest rate cuts remain on the tablePolicy framework to shift toward expectation-driven indicatorsStructural tools to support innovation and SMEsCommitment to currency flexibility and RMB internationalisationChina’s central bank has reaffirmed a clear easing bias for monetary policy in 2026, signalling further scope for both reserve requirement ratio (RRR) cuts and interest rate reductions as it seeks to stabilise growth and support a gradual recovery in prices. Speaking to Xinhua on Thursday, PBOC Governor Pan Gongsheng said policy would remain “moderately loose,” with authorities committed to keeping liquidity ample and financing costs low across the economy.Pan said monetary policy would prioritise stable economic growth and a “reasonable” recovery in prices, deploying both new stimulus measures and existing policy tools to create a supportive financial environment. He explicitly noted there is still room for further RRR and rate cuts this year, reinforcing expectations that policy support will remain in place even as global central banks move more cautiously.The governor also highlighted structural changes underway in China’s financial system. In 2025, new bank loans accounted for less than half of total social financing, underscoring a shift toward market-based financing channels. In response, the PBOC plans to refine its policy framework to better reflect these changes and improve regulatory effectiveness.A key theme was flexibility. Pan said the central bank will move away from rigid quantitative targets toward a more observation-based and expectations-driven framework. Liquidity management will increasingly rely on government bond transactions to ensure sufficient funding within the banking system, while efforts will be made to improve the transmission of policy rates to market rates.The PBOC also plans to enhance its structural policy tools, guiding banks to allocate credit more effectively toward priority areas such as innovation, technological upgrading and support for small and medium-sized enterprises. On the currency front, Pan reaffirmed a commitment to a market-driven exchange rate, while guarding against excessive volatility in the yuan.Internationally, the central bank will continue pushing for deeper financial opening, supporting RMB internationalisation and strengthening Shanghai and Hong Kong as global financial hubs. Enhanced cross-border RMB payment systems and broader international financial cooperation were also flagged as priorities for 2026. This article was written by Eamonn Sheridan at investinglive.com.

US House Speaker Johnson said Republicans remain divided over whether tariff revenues should be used to fund $2,000 payments to households.Such payments tend to act as stimulus and give stocks a boost. Heads up, that expected boost is unlikely now. This article was written by Eamonn Sheridan at investinglive.com.

Data only on this post. I'll post more detail separately. ADDED: Here we are, detail and analysis: New Zealand inflation rises above target as domestic pressures persistPreview is here from earlier. Non-tradeables +0.6% q/q and +3.5% y/y This article was written by Eamonn Sheridan at investinglive.com.

New Zealand inflation data:Analysts expect New Zealand consumer prices to have increased by around 0.5% in the December quarter, leaving annual inflation steady at 3.0%. The quarterly rise is largely attributed to higher petrol prices and seasonal increases in travel and accommodation costs over the holiday period. These pressures were partly offset by a typical seasonal decline in food prices. Beneath the headline figures, measures of core inflation have continued to ease over the past year, with most indicators now sitting in the 2–3% range. This projection is above the RBNZ’s November MPS forecast of 0.2% quarterly inflation and an annual rate of 2.7%.For the New Zealand dollar, a firmer-than-RBNZ CPI outcome would lean modestly supportive at the margin, reinforcing the view that inflation is proving more persistent than the central bank assumed in its November forecasts. A +0.5% quarterly print would help anchor NZD downside and potentially offer short-term support against the AUD and USD. That said, with core inflation continuing to trend lower and annual inflation holding near 3%, the data are unlikely to trigger a material repricing of the policy outlook on their own, leaving the NZD sensitive to broader risk sentiment and offshore rate dynamics. Japan inflation data:Recent data showed headline CPI running at 2.9% y/y, with national core inflation (excluding fresh food) at 3.0% and monthly prices rising 0.4%. Core-core inflation, which strips out both fresh food and energy, edged down to 3.0% from 3.1%, but inflation remains well above the Bank of Japan’s 2% target for a 44th straight month, sustaining expectations of further policy normalisation over time. Analyst notes indicate policymakers are increasingly focused on the inflationary effects of a weak yen, as higher import costs are passed through to consumers. Even so, the BoJ is widely expected to leave policy unchanged at its January meeting. More on the BoJ following below ...Bank of Japan:You'll note the time for the BoJ statement listed at 0300 GMT. This is approximate only. The BoJ never has a set time for its policy announcement. An 0230 to 0330 GMT time window is a reasonable expectation. What is known is the Bank of Japan Governor Ueda will begin his press conference at 0630 GMT. The Bank of Japan is widely expected to keep its policy rate unchanged at 0.75% while signalling a continued tightening bias. Growth forecasts are likely to be revised higher, reflecting fiscal stimulus and easing external headwinds, while inflation risks remain elevated due to yen weakness and firm wage growth. Attention will centre on Governor Ueda’s guidance, particularly whether he opens the door to an earlier rate hike if the yen slides further. Markets are also alert to any adjustment in bond-purchase tapering to contain rising yields, a move that could weaken the yen and lift equities.More detailed previews can be found here:BOJ signals readiness for more rate hikes as yen weakness fuels inflation risksBoJ preview: Will the central bank intervene in the bond market and sink the yen? This article was written by Eamonn Sheridan at investinglive.com.

Strong Q4 execution was overshadowed by cautious Q1 guidance, tempering the near-term earnings outlook.Summary Q4 EPS and revenue beat expectations, driven by Datacenter & AI and FoundryGross and operating margins surprised meaningfully to the upside in Q4Client Computing revenue slightly missed estimatesQ1 EPS and revenue guidance fell short of consensusMargin outlook for Q1 flagged renewed pressureIntel reported a stronger-than-expected set of results for the December quarter, delivering beats across earnings, revenue and margins, although a cautious outlook for the March quarter tempered the market reaction. Adjusted earnings per share came in at $0.15, well above consensus expectations, while revenue of $13.67bn also topped forecasts, pointing to improved execution across several key segments.Margins were a standout feature of the quarter. Adjusted gross margin rose to 37.9%, comfortably ahead of estimates, while adjusted operating margin reached 8.8%, also exceeding expectations. The margin performance suggests progress on cost control and operational efficiency following a prolonged period of restructuring and investment, and provided a notable positive surprise for investors focused on Intel’s turnaround narrative.Segment performance was mixed but broadly supportive. Datacenter & AI revenue rose to $4.74bn, beating estimates and underscoring ongoing demand for compute and AI-related infrastructure, even as competitive pressures remain intense. Intel Foundry revenue also exceeded expectations at $4.51bn, highlighting incremental traction in the company’s manufacturing ambitions. By contrast, Client Computing revenue of $8.19bn came in slightly below forecasts, reflecting persistent softness in the PC market and ongoing caution among enterprise and consumer buyers.Looking ahead, guidance for the March quarter was weaker than the market had anticipated. Intel forecast adjusted EPS at breakeven, below consensus expectations, and projected revenue in a range of $11.7bn to $12.7bn, implying a softer near-term demand environment. The company also guided to a decline in adjusted gross margin to 34.5%, signalling renewed margin pressure as volumes ease and investment spending continues.Overall, the results highlight a company making tangible operational progress, but still navigating a challenging demand backdrop. While Q4 execution and margin delivery were encouraging, the softer Q1 outlook reinforces that Intel’s recovery is likely to remain uneven, with investor confidence hinging on sustained Datacenter growth and continued foundry momentum through 2026. This article was written by Eamonn Sheridan at investinglive.com.

The Australian dollar is endorsing a positive view on global growth this year.It's made a strong move higher against the US dollar today, gaining 83 pips to 0.6843. That's the best level since October 2024, a month when AUD/USD touched 0.6942 before failing to truly challenge the 70-cent figure. From there it sank as low as 59-cents in the aftermath of Trump's Liberation Day before embarking on a steady grind higher to current levels.The latest move higher is a sharp one, in part due to Australia's status as a major mining exporter. The jump in gold prices is likely to set off a fresh round of inbound capital expenditures in mining exploration and development. In addition, copper is near all-time highs.In the bigger picture, I think the Australian dollar is sniffing out an improving global growth picture, in large part due to stronger government spending. The Trump administration is running large fiscal deficits and the turmoil in Germany led to a step change in German spending. Lately, Chinese growth indications are flagging and speculation is climbing regarding more fiscal stimulus. In Japan, PM Takaichi is running on fresh stimulus, despite the risk of rising borrowing costs.The world is also looking for an island of stability away from Trump's ever-changing whims. That's precisely what Australian and New Zealand have turned into (NZD is also up 1.1% today). There is plenty to like in both these economies as we work out way through a tumultuous time in global geopolitics. I think AUD/CAD is telling in the geopolitical lens. The Aussie is at the highest since 2023 against the loonie despite being a fellow commodity currency and with both central banks at roughly the same spot in the cycle, though the RBA is closer to hiking rates.Canada faces the prospect of a trading squeeze with the United States, while Australia does little trade with the US and has managed to China relationship successfully. This article was written by Adam Button at investinglive.com.

Gold sold off after the de-escalation over Greenland but bidders were waiting in the wings and waiting at $4772, which was the session low. We're now more than $100 above that level and threatening $4900 for the first time.Similarly, silver touched $96 for the first time, rising 3% on the day.The $5000 level for gold and $100 for silver are now both a small reach away and those will act as magnets for the market. The short-term risk I see is around Trump's decision on the Federal Reserve Chairman. He once again appeared to rule out former-favorite Kevin Hassett in Davos. That has Kevin Warsh as the betting favorite but Rick Rieder saw his odds rise starting last week after an interview with Trump and some favorable media leaks afterwards.There are differing views on Warsh but I see him as a Trump yes-man, who has lobbied for the Fed job for years. I'd expect him to be a dove and toe Trump's line about significantly lowering interest rates. He might struggled to do that given the composition of the FOMC but he's more-dovish on the margins.In contrast, Rick Rieder is seen as an intelligent man who would make a great Fed chair. He's seen as independent, thoughtful and someone who would preserve the value of the US dollar. That's a negative for gold and that's why I see headline risk on the announcement.It's likely to be temporary though. The events in Davos this week highlighted the cracks in the global world order and the US at the center of it. Germany's Merz sounded determined to further integrate and insulate Europe and that was a common refrain. It was hard to listen to Trump yesterday and envision anything but three more years of turmoil. That should continue to keep a bid under gold.One warning is that the seasonal tailwind for gold is coming to an end. It's a driving factor that I highlight year after year so it would argue for some caution, particularly if gold and silver can tag those big numbers in the short term. This article was written by Adam Button at investinglive.com.