- Markets had the push / pull of tariff threats today ahead of China's Lunar New Year Holidays with early breaking news that the US was to levy tariffs on Colombia for not taking back illegal immigrants. This was later deferred by the White House.
- China's key equity markets were strong again following moves last week to encourage investments in equities.
- US Tech futures dropped on fears that DeepSeek from China could disrupt the tech market - spurring some Asian tech stocks.
- China bonds rally as Industrial Profits underline the gravity of the challenges still facing that economy.
MARKETS
US TSYS: Gains Tapered As US & Colombia Reach A Deal To Prevent Tariffs
TYH5 is dealing at 108-21+, +0-06+ from NY closing levels, in today’s Asia-Pac session. TYH5 hit a high of 108-24.
- On Sunday, Trump ordered an emergency 25% tariff on all Colombian goods entering the US.
- Subsequently, Bloomberg reported that the US will not levy threatened tariffs on Colombia after reaching a deal, the White House said. The South American country’s government “agreed to all of President Trump’s terms, including the unrestricted acceptance of all illegal aliens from Colombia returned from the United States, including on U.S. military aircraft, without limitation or delay,” White House Press Secretary Karoline Leavitt said in a statement. “
- Ahead of a key earnings week, US stock futures are dealing lower but currently sit slightly above session cheaps. The S&P 500 is down 0.9% and the Nasdaq is down ~0.50%.
- Cash bonds are dealing 2-4bps richer in today’s Asia-Pac session, with a flattening bias, after finishing Friday mildly stronger.
- The US Treasury will auction $69 billion of two-year notes and $70 billion of five-year debt later Monday.
- Focus this week is the FOMC policy announcement on Wednesday.
JGBS: Cash Bonds Little Changed, US Tsys Swing With Tariff News
JGB futures are stronger but off session highs, +11 compared to the settlement levels.
- US Tsys have been supported in today’s Asia-Pac session after news that Trump on Sunday ordered an emergency 25% tariff on all Colombian goods entering the US. Subsequently, Bloomberg reported that the US will not levy threatened tariffs on Colombia after the South American country’s government “agreed to all of President Trump’s terms".
- Currently, cash US tsys are dealing 2-4bps richer.
- Ahead of a key earnings week, US stock futures are dealing lower. The S&P 500 is down ~1.0% and the Nasdaq is down ~0.50%.
- Focus this week is the FOMC policy announcement on Wednesday.
- Today, the local calendar has been light, with Coincident/Leading Index data and an Auction for Enhanced-Liquidity 5-15.5 YR due later.
- Cash JGBs are little changed across benchmarks. The benchmark 10-year yield is 0.2bp lower at 1.229% versus the cycle high of 1.262%.
- Swap rates are flat to 1bp lower. Swap spreads are mixed.
- Tomorrow, the local calendar will see PPI Services and Machine Tool Orders data alongside BoJ Rinban Operations covering 1-5-year and 10-25-year JGBs.
BONDS: NZGBS: Richer With US Tsys, Trump Tariffs In Focus
NZGBs closed 2bps richer, aligning with strengthening in cash US tsys in today’s Asia-Pac session.
- Cash US tsys are dealing 1-4bps richer in today’s Asia-Pac session, with a flattening bias, after finishing Friday mildly stronger.
- US stock futures are dealing lower ahead of key earnings week, with the S&P 500 down 0.8% and the Nasdaq down ~0.50%.
- “In a social media post on Sunday, Trump said he ordered an emergency 25% tariff on all Colombian goods coming into the US, which will be raised to 50% in a week. Oil, gold, coffee and flowers top the list of exports, according to Colombia’s tax authorities.” (per BBG)
- The US Treasury will auction $69 billion of two-year notes and $70 billion of five-year debt later Monday.
- Focus this week is the FOMC policy announcement on Wednesday.
- Swap rates closed 2bps lower after a subdued session given Auckland Anniversary and Australia Day holidays.
- RBNZ dated OIS pricing closed little changed. 47bps of easing is priced for February, with a cumulative 109bps by November 2025.
- Tomorrow, the local calendar will see Filled Jobs.
- On Thursday, the NZ Treasury plans to sell NZ$200mn of the 1.50% May-31 bond, NZ$200mn of the 4.25% May-36 bond and NZ$100mn of the 1.75% May-41 bond.
FOREX: Asian Currencies Mixed As Tariffs and Holidays Dominate.
- Asian currencies were mixed with Korea and Indonesia out and Chinese Lunar New Year holidays about to begin.
- With headlines that the President was being charged, and the tech sector challenged by DeepSeek, the won had a tough day losing -0.453%.
- Malaysia’s Ringgit continued its period of lower volatility relative to regional peers, rising +0.073%.
- The Yen followed suit as investors begin to embrace the idea of higher rates. The Yen gained +0.07%.
- China’s USD/CNY fixing printed at 7.1698 versus a Bloomberg consensus of 7.2451.
ASIA STOCKS: Light Flows Across Holiday Period
Taiwan enjoyed strong inflows with Korea as outflows elsewhere.
- South Korea: Recorded inflows of +$240m Friday, bringing the 5-day total to --$506m. 2024 to date flows remain are -$218m. The 5-day average is -$101m, the 20-day average is -$10m and the 100-day average of -$149m.
- Taiwan: Had inflows of +$537m as of January 22nd, with total inflows of +$2264m over the past 5 days. YTD flows are negative at -$1261m. The 5-day average is -$71m, the 20-day average of -$71m and the 100-day average of -$111m.
- India: Saw outflows of -$354m as of the 23rd, with a total outflow of -$2283m over the previous 5 days. YTD outflows stand at -$6814m. The 5-day average is -$457m, the 20-day average of -$379m and the 100-day average of -$108m.
- Indonesia: Posted outflows of -$35m , bringing the 5-day total to -$57m. YTD flows are negative at -$223b. The 5-day average is -$11m, the 20-day average is -$8m the 100-day average of -$2m.
- Thailand: Recorded inflows of +$38m as of Friday, totaling -$23m over the past 5 days. YTD flows are negative at -$246m. The 5-day average is -$5m, the 20-day average of -$12m the 100-day average of -$10m.
- Malaysia: Experienced outflows of -$69m Friday, contributing to a 5-day outflow of -$158m. YTD flows stand at -$587m. The 5-day average is -$32m, the 20-day average of -$29m the 100-day average of -$22m.
- Philippines: Saw outflows of -$19m yesterday, with net outflows of -$34m over the past 5 days. YTD flows are negative at -$115m. The 5-day average is -$7m, the 20-day average of -$6m the 100-day average of -$2m.
ASIA STOCKS: China Up Before Lunar New Year Break.
- Following the news last week of new measures to encourage equity investment, and mixed economic data, most China markets continued to rally ahead of the Lunar New Year holiday.
- Hang Seng lead the way again up +0.95%, CSI 300 +0.13%, Shanghai +0.30% and Shenzhen was the outlier down -0.60%. Taiwan had a good day up +0.9%
- Malaysia’s FTSE KLCI had a tough finish to the end of last week and continued in a similar trend today down -0.34%.
- Korea’s KOSPI had the dual impact of news that the president is being charged and the impact that DeepSeek is having on tech markets, yet the KOSPI was up +0.85%.
- India’s NIFTY 50 is opening up weak, down -0.97%.
- With Jakarta out, Singapore and Thailand were both marginally weaker, down -0.20%
GOLD: Trends Down in Asia As Tariff Risk Heightens.
- Gold has had a stellar start to 2025 and last week delivered the best weekly gains thus far.
- Gold gained +2.4% last week driven by a ‘safe-haven’ bid in the face of mounting tariff risks.
- This week has started no differently with news that President Trump intends to levy up to 25% tariffs on Colombia following the turning away of a flight from the US, deporting illegal immigrants.
- Gold closed Friday at US$2,770.58 and has given some of that back in early trading, down to $2,767.00 at the open and falling throughout the day to $2,758.28.
- Over the weekend Ghana’s released it’s trade surplus details, rising US$5bn, driven by a 50% increase in gold exports to $11.6bn.
OIL: Trump’s OPEC+ Focus Sees Oil Down.
- President Trump kept up his pressure on OPEC+ calling for them to ‘cut the price of oil,’ in a bid to starve Russia and halt the Ukraine war.
- These comments were a follow up to similar comments made last week, leading to the first weekly drop for oil prices this year.
- So far OPEC+ have stated that they intend to stick to their current plans of withholding supply to keep prices up despite sitting on huge supply surpluses.
- WTI finished Friday at US$74.59 bbl and early trade in Asia is seeing the decline continue with early prices at $74.20 declining further to $74.11.
- Brent finished Friday at US$78.36 and is trading at $78.07 at the open, then declining further to a low of $77.54.
- Brent had a minor recovery in the afternoon gaining to $77.93.
- Some support to prices may be found as further news evolves of Ukraine’s attack on Russia’s Ryazan region, home to one of the country’s largest oil refineries.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 27/01/2025 | 0810/0910 |  EU | ECB's Lagarde Pre-Recorded lecture organised by Hungarian central bank | |
| 27/01/2025 | 0900/1000 | *** |  DE | IFO Business Climate Index |
| 27/01/2025 | 1400/1500 | ** |  BE | BNB Business Confidence |
| 27/01/2025 | 1500/1000 | *** |  US | New Home Sales |
| 27/01/2025 | 1530/1030 | ** | US | Dallas Fed manufacturing survey |
| 27/01/2025 | 1535/1635 | EU | ECB's Lagarde remarks at IHRD occasion | |
| 27/01/2025 | 1630/1130 | * | US | US Treasury Auction Result for 26 Week Bill |
| 27/01/2025 | 1630/1130 | * | US | US Treasury Auction Result for 2 Year Note |
| 27/01/2025 | 1800/1300 | * | US | US Treasury Auction Result for 5 Year Note |
| 27/01/2025 | 1800/1300 | * | US | US Treasury Auction Result for 13 Week Bill |
| 27/01/2025 | - | US | FOMC Meeting | |
| 28/01/2025 | 0001/0001 | * |  GB | BRC Monthly Shop Price Index |
| 28/01/2025 | 0745/0845 | ** |  FR | Consumer Sentiment |
| 28/01/2025 | 0900/1000 | ** | EU | ECB Bank Lending Survey |
| 28/01/2025 | 1000/1000 | * | GB | Index Linked Gilt Outright Auction Result |
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