Source: MNI - Market News/Bloomberg/Refinitiv.
UK
BOE (MNI BRIEF): The Bank of England will make only one further 25bp cut in 2025 and another in 2026, with Bank Rate troughing at 4.0%, according to the National Institute of Economic and Social Research.
UKRAINE (BBG): “Treasury Secretary Scott Bessent is set to travel to Ukraine this week to meet President Volodymyr Zelenskiy as part of US efforts to resolve the war and secure access to critical minerals.”
TECHNOLOGY (BBC): “The UK and US have not signed an international agreement on artificial intelligence (AI) at a global summit in Paris. In a brief statement, the UK government said it had not been able to add its name to it because of concerns about national security and "global governance."
EU
US/RUSSIA (BBG): “President Donald Trump hailed the release of an American who had been detained in Russia, saying he hoped the move would allow the two nations to work toward ending the war in Ukraine.”
US/UKRAINE (BBG): “Treasury Secretary Scott Bessent is set to travel to Ukraine this week to meet President Volodymyr Zelenskiy as part of US efforts to resolve the war and secure access to critical minerals.”
UKRAINE (ECONOMIST): “When Mr Trump came into office he gave Keith Kellogg, his special envoy to Ukraine, 100 days to come up with a peace plan. The 26th meeting of the Ukraine Defence Contact Group, an alliance of more than 50 countries, on Wednesday may offer some clues as to Mr Kellogg’s thinking. One ominous sign for Mr Zelensky is that America plans to take a back seat at the gathering, which Britain will chair instead.”
UKRAINE (POLITICO): “Ukrainian President Volodymyr Zelenskyy plans to offer Russia a straight-up land exchange to end its three-year war if United States President Donald Trump manages to bring both countries to the negotiating table.”
RUSSIA (POLITICO): “If Moscow perceives NATO as weak, Russia could be ready to wage a "large-scale war" in Europe within five years, the Danish Defense Intelligence Service (DDIS) has said.”
US
FED (MNI): Modestly restrictive U.S. interest rates will keep inflation moving slowing toward 2% over the next few years, Federal Reserve Bank of New York President John Williams said Tuesday, also noting significant uncertainties around policy changes from the Trump administration and Congress.
FED (MNI BRIEF): The neutral rate in the United States has risen "meaningfully" since before the pandemic, Federal Reserve Chair Jay Powell told members of Congress Tuesday.
FED (MNI BRIEF): The Federal Reserve will only use QE to support the economy when interest rates are pinned at the zero lower bound, Chair Jerome Powell told Congress on Tuesday, also indicating that the central bank isn't close to ending its current quantitative tightening program.
GOVERNMENT (RTRS): “ U.S. President Donald Trump plans to order federal agencies to lay the groundwork for widespread firings of government workers, a White House official said on Tuesday.”
OTHER
CANADA (MNI BRIEF): The Bank of Canada named University of Toronto economist Michelle Alexopoulos for a two-year term as an external deputy, expanding on Governor Tiff Macklem's push for outside voices in decision-making as the institution faces more political scrutiny.
AUSTRALIA (MNI): Ex-RBA officials share their outlook for the February meeting. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
CHINA
EQUITIES (SECURITIES DAILY/BBG): “Some 458 onshore listed firms have bought back shares worth a total of 13.5b yuan so far this year, the Securities Daily reported, saying this showed strong market confidence and future growth potential.”
CONSUMER (YICAI): "China’s consumer market will grow steadily in Q1 as the government expands trade-in schemes and promotional activities, according to experts interviewed by Yicai, following the State Council's Executive Meeting which focused on boosting residents' income."
AUTOS (21ST CENTURY BUSINESS HERALD): "China’s auto market is expected to recover gradually during February, following January's negative growth, 21st Century Business Herald reported, citing the China Passenger Car Association (CPCA).
CHINA MARKETS
MNI: PBOC Net Drains CNY139 Bln via OMO Wednesday
MNI (BEIJING) - The People's Bank of China (PBOC) conducted CNY558 billion via 7-day reverse repos, with the rate unchanged at 1.50%. The operation led to a net injection of CNY139 billion after offsetting the maturity of CNY697 billion today, according to Wind Information.
- The seven-day weighted average interbank repo rate for depository institutions (DR007) fell to 1.8211% at 09:55 am local time from the close of 1.9013% on Tuesday.
- The CFETS-NEX money-market sentiment index, measuring interbank money-market liquidity, closed at 43 on Tuesday, compared with the close of 54 on Monday. A higher reading points to tighter liquidity condition, with 50 representing an equilibrium.
MNI: PBOC Sets Yuan Parity Lower At 7.1710 Weds; -1.55% Y/Y
MNI (BEIJING) - The People's Bank of China (PBOC) set the dollar-yuan central parity rate lower at 7.1710 on Wednesday, compared with 7.1716 set on Tuesday. The fixing was estimated at 7.3010 by Bloomberg survey today.
MARKET DATA
AUSTRALIA Q4 HOME-LOAN VALUES +1.4% Q/Q; PRIOR +5.3%
AUSTRALIA Q4 INVESTOR LOAN VALUES -2.9 Q/Q; PRIOR +8.3%
AUSTRALIA Q4 OWNER-OCCUPIED HOME LOAN VALUES +4.2% Q/Q; PRIOR +3.5%
JAPAN JAN. M2 MONEY STOCK +1.3% Y/Y; PRIOR +1.3%
JAPAN JAN. M3 MONEY STOCK +0.8% Y/Y; PRIOR +0.9%
SOUTH KOREA JAN. HOUSEHOLD LENDING KRW1,140.5T; PRIOR KRW1,141.0T
MARKETS
US TSYS: Tsys Yields Rise Following Trump Comments, Focus Turns To CPI Later
- Tsys futures are trading slightly lower today, with all contracts trading below Tuesday's lows. There hasn't been much in the way of headlines, however Trump did speak earlier, which saw tsys slip slightly. TU is -00 5/8 at 102-21 3/4, while TY is -03 at 108-27+, volumes have picked up over the past hour or so since Trump spoke, with a pick up in selling across the FV & TY contracts
- Key levels to watch for TY are initial support at 108-20+ (Feb 4 low), below here 108-06 (Jan 23 lows), while to the upside, initial resistance isn't until 110-00 (Feb 7 high)
- Cash tsys yields are trading 1bps to 1.5bps cheaper today, the 2yr is +1.3bps at 4.296%, while the 10yr is +1.2bps at 4.547%. The 2s01s is unchanged at 24.737, after briefly hitting ytd lows of 15.889 on Friday, vs ytd highs of 42.887.
- Trump spoke at the White House, emphasizing his desire to end the war in Ukraine and expressing appreciation for Russia’s release of hostage Marc Fogel. He declined to confirm if he spoke with Putin but hinted that another release is expected tomorrow. Trump also suggested there is "goodwill" regarding the war and, when asked about reciprocal tariffs on Wednesday, responded, "We'll see."
- MNI - US CPI Preview: Consensus sees core CPI inflation accelerating to a seasonally adjusted 0.3% M/M (unrounded 0.29%) in
January after what was, for now, seen as a slightly softer than expected 0.225% M/M in December ( Here ) Ahead of CPI later today, fed-dated OIS is pricing in about 35bps of cuts this year, with the first full 25bps cut priced for September.
JGBS: Bear-Steepener, BoJ Ueda: Need To See Whole Picture Of Trump Measures
JGB futures are weaker and near session cheaps, -21 compared to settlement levels.
- “The BOJ is likely to raise the policy rate by 25 bps once more this year, PGIM Fixed Income says in a note. However, the central bank could accelerate rate hikes in the event Japanese consumers materially step up consumption, it says.” (per WSJ via BBG)
- “"We cannot understand the impact [of Trump's measures] on Japan unless we see the whole picture--such as how the overall package, instead of individual policies, would look like and what kinds of policy developments are causing currency fluctuations," Ueda told a parliamentary committee.” (per DJ via BBG)
- Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s modest sell-off. The focus is on key US CPI inflation data today at 0830ET.
- Cash JGBs are flat to 3bps cheaper across benchmarks, with the 10-year underperforming. The benchmark 10-year yield is 3.0bps higher at 1.347%, a fresh cycle high.
- The swaps cure has twist-steepened, with rates 1bp lower to 2bps higher. Swap spreads are mostly tighter.
- Tomorrow, the local calendar will see PPI data alongside BOJ Rinban Operations covering 1-3-year and 5-25-year+ JGBs.
AUSSIE BONDS: Cheaper & At Session’s Worst Levels Ahead Of US CPI Data
ACGBs (YM -6.0 & XM -8.0) are cheaper and near the Sydney session’s worst levels.
- “The Australian economy is slowly improving and millions of mortgage holders will finally feel their disposable incomes rise when the Reserve Bank cuts interest rates next week, as widely expected, the country’s largest bank said as it posted a bumper $5.13 billion half-year profit.” (per SMH via BBG)
- Cash US tsys are 1-2bps cheaper in today’s Asia-Pac session after yesterday’s modest sell-off. The focus is on key US CPI inflation data today at 0830ET.
- Cash ACGBs are 6-8bps cheaper with the AU-US 10-year yield differential at -9bps.
- Swap rates are 5-8bps higher, with the 3s10s curve steeper.
- The bills strip is -2 to -6 across contracts.
- Tomorrow, the local calendar will see Consumer Inflation Expectations. This is the last data release before the RBA policy Decision next Tuesday.
- RBA-dated OIS pricing is 1–6bps firmer across meetings today, led by late 2025 contracts. More notably, OIS pricing is now mixed compared to pre-Q4 CPI levels on 24 January, with the Aug-25 meeting firming by 10bps over the past week.
- A 25bp rate cut in April remains fully priced (119%), while the probability of a February cut stands at 84% (based on an effective cash rate of 4.34%).
BONDS: NZGBS: Cheaper But In Middle Of Ranges, US CPI On Tap
NZGBs closed in the middle of today’s ranges, with benchmark yields 3-4bps higher.
- The NZGB 10-year outperformed its ACGB counterpart, with the AU-US yield differential 3bps tighter at +9bps. The NZ-US 10-year differential was unchanged at +1bp.
- Cash US tsys are ~1bp cheaper in today’s Asia-Pac session after yesterday’s modest sell-off. The focus is on key US CPI inflation data today at 0830ET.
- (MNI) Consensus sees core CPI inflation accelerating to a seasonally adjusted 0.3% M/M (unrounded 0.29%) in January after what was, for now, seen as a slightly softer-than-expected 0.225% M/M in December.
- The headline is expected only a touch stronger, at 0.32% M/M for a pullback from 0.39% owing to a sequential slowing in energy prices vs stronger food prices amidst a serious bird flu outbreak.
- There’s a good chance core CPI ‘surprises’ a tenth higher with 3.2% Y/Y owing to rounding, whilst headline CPI is widely expected to print 2.9% Y/Y.
- Swap rates closed 4-8bps higher, with the 2s10s curve steeper.
- RBNZ dated OIS pricing is unchanged. 49bps of easing is priced for February, with a cumulative 121bps by November 2025.
- Tomorrow, the local calendar will see Card Spending and 2Yr Inflation Expectations data.
FOREX: Yen Losses Further Ground, Steady Trends Elsewhere
Yen losses have dominated G10 trade so far in Wednesday trade. The yen losing nearly 0.80% against the dollar, USD/JPY last near 153.65/70. Other moves have been much more modest in the G10 space. Outside of some modest NZD gains, most pairs sit close to flat. The BBDXY has ticked up on account of yen weakness, the USD index last around 1301.50.
- Yen weakness has likely been driven by the firmer core yield backdrop. These trends have continued in Asia Pac markets today, although US Tsy yield gains are not much beyond 1bps at this stage. US-JP 10yr government bond yield differentials also haven't ticked higher so far today.
- Onshore Japan markets have returned today, so there may also be some catch USD demand in play. BoJ Governor Ueda appeared before parliament earlier, noting there is a risk that higher food inflation impacts inflation expectations more broadly. Ueda reiterated that further hikes will depend on the economy and price developments.
- Current USD/JPY post levels are close to option expiry levels for NY cut later on Wednesday (Y153.50-70($1.7bln). The 50-day EMA resistance point rests above 154.00.
- AUD/USD is little changed last near 0.6300, close to its 50-day EMA resistance zone. Hong Kong equities are higher, although trends elsewhere (including in China) are more mixed. NZD/USD is marginally higher at 0.5660. NZD/JPY has tested above 87.00, but hasn't been able to sustain such gains so far. AUD/JPY is already above this resistance point.
- Looking ahead, Fed Chair Powell testifies to the House financial services committee and the Fed’s Bostic and Waller also speak. January US CPI prints and Bloomberg consensus is expecting no change in the headline at 2.9% but for core to ease 0.1pp to 3.1%. January budget and real earnings data are also out. The ECB’s Elderson speaks at an MNI Connect event and BoE’s Greene appears.
ASIAN MARKETS: Equities Mostly Higher Ahead Of US CPI Later
Asian markets mostly rose, with Hong Kong leading gains as enthusiasm for AI developments, particularly DeepSeek and Alibaba’s reported collaboration with Apple, drove sentiment. The Hang Seng jumped 1.6%, while China’s CSI 300 edged down 0.1%, reflecting mixed sentiment amid ongoing Fed rate concerns. Japan’s Nikkei 225 rose 0.2%, but broader Japanese shares underperformed as the yen weakened for a third straight day on concerns over Trump’s tariff policies.
- South Korea’s Kospi gained 0.3%, supported by defense and shipbuilding stocks, Taiwan's TAIEX is 0.15% lower, while Australia’s ASX 200 added 0.3%. Indonesia’s JCI rebounded 0.9% from recent lows, while India’s Nifty 50 slipped 0.3% ahead of key inflation data.
- We saw some weakness across risk assets earlier following Trump speaking at the White house, he emphasized his desire to end the war in Ukraine and expressing appreciation for Russia’s release of hostage Marc Fogel. He declined to confirm if he spoke with Putin but hinted that another release is expected tomorrow. Trump also suggested there is "goodwill" regarding the war and, when asked about reciprocal tariffs on Wednesday, responded, "We'll see."
- Investors remain cautious ahead of US inflation data, with Fed Chair Powell reinforcing a “no rush” stance on rate cuts. Treasury yields edged higher, and money markets fully price in just one Fed rate cut in 2025. The yen continued to decline, while oil and gold traded lower.
ASIA: Hong Kong Listed Equities Rally, Mainland Equities Struggle
Chinese and Hong Kong equities saw mixed moves today, with AI-related stocks continuing their rally, while pressure mounted on consumer and healthcare sectors. DeepSeek's AI-driven surge remains a key bullish driver, with Morgan Stanley, JPMorgan, and UBS expressing optimism that the rally is far from over. The MSCI China Index has now gained 15% from its January low, supported by increased global investor interest in the nation’s tech sector.
- Medical equipment stocks surged after Citigroup turned constructive on the sector, citing market share gains from foreign brands and long-term fundamentals. MicroPort MedBot (+8.5%), MicroPort Scientific (+5.7%), and Inkon Life (+7.7%) led the advance, with Citi highlighting potential stimulus measures at next month’s Two Sessions as a further catalyst.
- Meituan tumbled as much as 6.1% after JD.com announced it would waive annual commissions for new restaurant partners, intensifying competition in the food delivery sector. JD.com shares rose 2%, while Alibaba share surged almost 7%. The HStech Index tracked Alibaba higher, however has since given back about half of the mornings gains to trade 1.30% higher at the break.
- Key equity benchmarks: HSI is +1.56%, HS Property Index +2.15%, HS China Enterprise Index +1.50% while China Mainland equities underperform with the CSI 300 -0.10%.
- Overall, sentiment remains strong for AI and tech stocks, while consumer and platform businesses face increasing pressure from competition and regulatory concerns.
OIL: Crude Lower; US CPI, EIA US Inventory Data & OPEC Report Out Later
Oil prices are moderately lower today following data showing another large US inventory build. They rose over Monday and Tuesday on supply concerns. WTI is down 0.4% to $73.05/bbl after a low of $72.93 and Brent is 0.3% lower at $76.74/bbl. The USD index is 0.1% higher, which is also likely weighing on dollar-denominated crude.
- Bloomberg reported that there was a US oil stock build of another 9mn barrels last week, according to people familiar with the API data. Flows from Canada have been ramped up in recent weeks to beat tariffs. Product inventories were lower with gasoline down 2.5mn and distillate 600k. The official EIA data is out later today.
- Despite tighter US sanctions on Russia appearing to impact its output and stricter enforcement of those against Iran have been announced, the US’ EIA increased its expectations of excess supply in 2025 and 2026. The market has been concerned about the impact of protectionism on global demand. OPEC’s monthly report is published today and the IEA’s on Thursday, which tends to be less optimistic regarding the outlook than OPEC.
- Later Fed Chair Powell testifies to the House financial services committee and the Fed’s Bostic and Waller also speak. January US CPI prints and Bloomberg consensus is expecting no change in the headline at 2.9% but for core to ease 0.1pp to 3.1% (see MNI US CPI Preview). January budget and real earnings data are also out. The ECB’s Elderson speaks at an MNI Connect event and BoE’s Greene appears.
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 12/02/2025 | 0900/1000 | * |  IT | Industrial Production |
| 12/02/2025 | 1000/1000 | * |  GB | Index Linked Gilt Outright Auction Result |
| 12/02/2025 | 1000/1100 |  EU | ECB's Elderson in roundtable at the MNI Connect event | |
| 12/02/2025 | 1200/0700 | ** |  US | MBA Weekly Applications Index |
| 12/02/2025 | - | *** |  CN | Money Supply |
| 12/02/2025 | - | *** | CN | New Loans |
| 12/02/2025 | - | *** | CN | Social Financing |
| 12/02/2025 | 1330/0830 | *** | US | CPI |
| 12/02/2025 | 1500/1000 | US | Fed Chair Jerome Powell | |
| 12/02/2025 | 1500/1500 | GB | BOE's Greene speech at Institute of Directors | |
| 12/02/2025 | 1530/1030 | ** | US | DOE Weekly Crude Oil Stocks |
| 12/02/2025 | 1700/1200 | US | Atlanta Fed's Raphael Bostic | |
| 12/02/2025 | 1800/1300 | ** | US | US Note 10 Year Treasury Auction Result |
| 12/02/2025 | 1830/1330 |  CA | BOC Meeting Minutes | |
| 12/02/2025 | 1900/1400 | ** | US | Treasury Budget |
| 12/02/2025 | 2205/1705 | US | Fed Governor Christopher Waller | |
| 13/02/2025 | 0700/0700 | ** | GB | UK Monthly GDP |
| 13/02/2025 | 0700/0700 | ** | GB | Trade Balance |
| 13/02/2025 | 0700/0700 | ** | GB | Index of Services |
| 13/02/2025 | 0700/0700 | *** | GB | Index of Production |
| 13/02/2025 | 0700/0800 | *** |  DE | HICP (f) |
| 13/02/2025 | 0700/0700 | ** | GB | Output in the Construction Industry |
| 13/02/2025 | 0700/0700 | *** | GB | GDP First Estimate |
| 13/02/2025 | 0730/0830 | *** |  CH | CPI |
| 13/02/2025 | 0840/0940 | EU | ECB's Cipollone pre-recorded interview at Frankfurt Digital Finance conference | |
| 13/02/2025 | 1000/1100 | ** | EU | Industrial Production |
| 13/02/2025 | 1330/0830 | *** | US | Jobless Claims |
| 13/02/2025 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 13/02/2025 | 1330/0830 | *** | US | PPI |