Source: MNI - Market News/Bloomberg
UK
ECONOMY (BBC): “Rachel Reeves has backed a third runway at London's Heathrow Airport as part of a fresh plan to get the UK's sluggish economy growing.”
UTILITIES (BBG): "Average UK water bills are set to rise 26% from April, the biggest ever increase for households and business still feeling the sting of a cost-of-living crisis."
EU
TRADE (POLITICO): “Europe’s top trade official, seeking to win over U.S. President Donald Trump, said on Wednesday that Brussels was ready to team up with Washington to strengthen economic security in the face of the competitive threat posed by China.”
ECONOMY (DW): “EU Commission President Ursula von der Leyen unveiled the policy roadmap called Competitive Compass on Wednesday, warning that the 27-nation EU risks to be "stuck on a low-growth path, with less income for the employed, less welfare for the disadvantaged, and less opportunities for all."”
GERMANY (BBC): “Germany's parliament descended into heckles and recriminations on Wednesday after a "firewall" against working with the far-right cracked. A non-binding motion calling for tougher border and asylum rules passed with support from the far-right Alternative for Germany (AfD). During the stormy session, politicians of various parties hurled criticism and blame at each other.”
SPAIN (POLITICO): “A China-linked influence operation impersonated a human rights organization on social media to encourage Spaniards to overthrow their government in the wake of the deadly October floods in Valencia, according to a new report.”
UKRAINE (POLITICO): “U.S. Secretary of State Marco Rubio and Ukraine's Foreign Minister Andrii Sybiha have both been invited to a planned Feb. 12 meeting of EU foreign ministers in Brussels.”
UKRAINE (POLITICO): “Slovakia summoned Ukraine's ambassador to discuss recent statements over gas transit, as the ill-tempered dispute between the two countries rumbled on. Slovakia’s Foreign Minister Jurai Blanár accused Ukrainian authorities of interfering in Slovakia’s internal affairs with their comments, Slovak media reported on Wednesday, but didn't say which statements he was referring to.”
US
FED (MNI FED WATCH): Federal Reserve officials need to see more improvement on inflation or additional weakness in the labor market before cutting interest rates further, Fed Chair Jerome Powell said Wednesday. At the same time, Powell indicated monetary policy is still quite restrictive, suggesting he sees room for further policy easing ahead.
FED (MNI BRIEF): The Federal Reserve needs additional progress on inflation before considering cutting interest rates again, Chair Jerome Powell said Wednesday. "We will be focusing on seeing real progress on inflation, or some weakness in the labor market, before we consider making (further) adjustments," Powell said during his post-meeting press conference.
FED (MNI): Here is a rough transcript of Chair Powell's January press conference.
AI (BBG): "SoftBank Group Corp. is in discussions to invest as much as $25 billion in OpenAI, a move that would potentially make it the AI startup’s biggest backer."
TECH (BBG): "Meta Platforms Inc. Chief Executive Officer Mark Zuckerberg exuded confidence in his company’s artificial intelligence strategy, saying 2025 will be a “really big year” in which its AI assistant will become the most widely used in the industry. "
TECH (BBG): "Tesla Inc. revealed plans to begin robotaxi operations and forecast a sales recovery this year, fueling what Elon Musk predicted would be an “epic” period of growth for the electric vehicle maker."
OTHER
CANADA (MNI BRIEF): Canada's energy and natural resources minister on Wednesday compared the idea of accepting U.S. tariffs to policies of appeasement seen in the 1930s, some of the bluntest comments yet signaling an intention to retaliate if Donald Trump moves ahead with sanctions this weekend.
CANADA (MNI BRIEF):Bank of Canada Governor Tiff Macklem said officials have taken on lessons about fuzzy communication from when interest rates were at the zero lower bound during the pandemic.
CANADA (BBG): “Bank of Canada Governor Tiff Macklem says the central bank can’t repair the economic damage of a trade war with the US — but he’ll do his best to make it less painful.”
BRAZIL (MNI): The Central Bank of Brazil (BCB) unanimously decided to hike its official Selic rate by 100 basis points again to 13.25% Wednesday, while signaling one more cut of the same size at the the next meeting. The move was in line with market expectations.
JAPAN (BBG): "The Bank of Japan made a significant step toward shrinking its massive balance sheet last week, while market watchers were fixated on the biggest interest rate increase from the central bank in 18 years."
JAPAN (BBG): "The Japanese government expects its annual debt-servicing costs to rise to almost $230 billion over the next four years as the central bank’s campaign to gradually raise interest rates drives up financing costs."
CHINA
US/CHINA (BBG): "Trump administration officials are exploring additional curbs on the sale of Nvidia Corp. chips to China, according to people familiar with the matter, who emphasized that conversations are in very early stages as the new team works through policy priorities."
MARKET DATA
NEW ZEALAND DEC. TRADE BALANCE +NZ$219M; PRIOR –NZ$435M
NEW ZEALAND DEC. 12-MONTHS YTD TRADE DEFICIT NZ$7.669B; PRIOR -NZ$8.261B
NEW ZEALAND JAN. ANZ BUSINESS ACTIVITY OUTLOOK INDEX 45.8; PRIOR 50.3
NEW ZEALAND JAN. ANZ BUSINESS CONFIDENCE INDEX 54.4; PRIOR 62.3
AUSTRALIA Q4 EXPORT PRICES +3.6% Q/Q; EST. +2.5%; PRIOR -4.3%
AUSTRALIA Q4 IMPORT PRICES +0.2% Q/Q; EST. +1.5%; PRIOR -1.4%
MARKETS
US TSYS: Tsys Steady Ahead Of GDP Later
- Very little happening in Tsys today, futures are slightly higher, however trading in narrow ranges. TU is unchanged at 102-27⅛, while TY is +03+ at 109-02. A bullish short-term cycle in Treasury futures highlights a corrective phase and the TY contract is holding on to its recent gains. Attention is on 109-12, the 50-day EMA - a level tested on Monday.
- A clear break of this EMA would strengthen a bullish theme and open 109-31, the Dec 18 high. The medium-term trend condition remains bearish. The bear trigger is 107-06, the Jan 13 low. Initial support has been defined at 108-00, the Jan 16 low.
- Cash tsys yields are trading flat to 1bps higher, the 5yr is under-performing, last +1bp at 4.341%, while the 10yr is +0.6bps at 4.534%
- Later today we have GDP, Jobless data & Pending Home Sales
JGBS: Subdued Session, Heavy Data Calendar Tomorrow, incl Tokyo CPI
JGB futures are weaker but well off session cheaps, -12 compared to settlement levels.
- According to MNI’s technicals team, a clear downtrend in JGB futures remains intact and the latest fresh cycle lows reinforce this condition. Note also that moving average studies on the continuation chart are in a bear-mode setup, highlighting a clear downtrend. The move down exposes the 140.00 psychological handle next. For now, short-term gains are considered corrective.
- Outside of the previously outlined International Investment Flows, there hasn't been much by way of domestic drivers to flag. BoJ Deputy Governor Himino is to give a speech at Hitotsubashi University at 1510 local time.
- Japan's debt-servicing costs are expected to rise to ¥35.3 trillion by 2028, a 25% increase from the current fiscal year. (per BBG)
- Cash US tsys are flat to 1bp richer in today’s Asia-Pac session.
- Cash JGBs are 1-2bps cheaper across benchmarks. The benchmark 10-year yield is 1.0bp higher at 1.207% versus the cycle high of 1.262%.
- Swap rates are flat to 1bp lower. Swap spreads are tighter.
- Tomorrow, the local calendar will see Tokyo CPI, Jobless Rate, Job-To-Applicant Ratio, Industrial Production, Retail Sales and Housing Starts data alongside 2-year supply.
AUSSIE BONDS: Modestly Cheaper After A Subdued Sydney Session, PPI Tomorrow
ACGBs (YM -2.0 & XM -2.5) are modestly cheaper after dealing in narrow ranges in today’s Sydney session.
- Q4 export prices rose significantly faster than imports. They rose 3.6% q/q, the first quarterly rise since Q4 2023, but are still down 8.6% y/y following -6.8% y/y. Import prices increased 0.2% q/q to be down 1.9% y/y after -1.1% y/y in Q3. With China’s growth expected to remain soft this year, a sustained improvement in the terms of trade is unlikely.
- Cash US tsys are little changed in today’s Asia-Pac session after yesterday’s muted reaction to the FOMC decision, statement and presser.
- The FOMC left the target rate steady at 4.25-4.5 but removed reference to progressing towards inflation reaching the goal.
- Cash ACGBs are flat to 1bp cheaper with the AU-US 10-year yield differential -14bps.
- Swap rates are little changed.
- The bills strip is slightly mixed across contracts.
- RBA-dated OIS pricing remains 3-6bps softer than yesterday’s pre-CPI levels across meetings. A 25bp rate cut is more than fully priced for April (133%), with the probability of a February 18 cut at 89% (based on an effective cash rate of 4.34%).
- Tomorrow, the local calendar will see PPI and Private Sector Credit data. The AOFM plans to sell A$800mn of the 2.5% May 2030 bond.
BONDS: NZGBS: Closed Modestly Cheaper, Cons Conf & Home Prices Tomorrow
NZGBs closed near the middle of today’s ranges, 2bps cheaper.
- While NZ ANZ business confidence and activity outlook eased in January they remain elevated, signalling some reduction in optimism following 125bp of RBNZ easing. Confidence fell almost 6 points to 54.4 and the outlook 4 points to 45.8, both still well above the historical averages. The inflation measures were higher across the board though, which will require monitoring but are highly unlikely to derail a 50bp rate cut on February 19 but may slow easing going forward as rates approach neutral.
- Today’s supply of NZ$500mn across May-31, May-36 and May 41 lines saw cover of 3.14x to 3.79x.
- Cash US tsys are little changed in today’s Asia-Pac session after yesterday’s muted reaction to the FOMC decision, statement and presser.
- The FOMC left the target rate steady at 4.25-4.5 but removed reference to progressing towards inflation reaching the goal.
- Swap rates closed flat to 3bps higher, with the 2s10s curve steeper.
- RBNZ dated OIS pricing closed flat to 3bps softer across meetings, with November leading. 48bps of easing is priced for February, with a cumulative 120bps by November 2025.
- Tomorrow, the local calendar will see CoreLogic Home Values and ANZ Consumer Confidence.
FOREX: Yen Outperforms Ahead Of BoJ Speech, ECB Later
Outside of a firmer yen backdrop, there has been little in the way of aggregate G10 FX moves so far today. Yen is up close to 0.40%, which has pushed down the BBDXY index to sub 1300 (off 0.20%).
- USD/JPY got to lows earlier of 154.29, but sits slightly higher, last in the 154.55/60 region. This is still up around 0.40% for the session so far in yen terms. Downside focus will rest on Monday's low at 153.72. A clean break sub this level would open up 152.55, a Fib retracement level.
- An earlier BBG report around moves by the BoJ to curb its balance sheet by ending a fund-provisioning program from July of this year drove some early yen support and JGB pressure. US-JP yield differentials are still arguing for lower USD/JPY levels, but haven't shift much on the day.
- We also have a speech from BoJ Deputy Governor Himino coming up in just under 2hrs, which will be gauged for BoJ hike follow up risks.
- In the cross asset space, US equity futures are higher, led by the tech side, following a host of late US earnings results. US yields are closed to unchanged.
- AUD/USD is little changed, last near 0.6230, with little positive spillover from the firmer US equity futures backdrop. Many regional equity markets remain closed though for China LNY.
- NZD/USD is down a touch to 0.5650/55. The NZ ANZ business confidence and activity outlook eased in January they remain elevated, signalling some reduction in optimism following 125bp of RBNZ easing. Confidence fell almost 6 points to 54.4 and the outlook 4 points to 45.8, both still well above the historical averages.
- Later US Q4 GDP, jobless claims, euro area Q4 GDP, December unemployment rate, European Commission January survey and January Spanish CPI print. The ECB is forecast to cut rates 25bp.
ASIA STOCKS: Equities Edge Higher, Following Fed Pause, Softbank's AI Investment
Asian equities edged higher as investors reacted to the Federal Reserve's rate pause, corporate earnings, and central bank policy expectations. Liquidity remained light with China, Hong Kong, South Korea, and Taiwan closed for Lunar New Year.
- India's Nifty 50 is 0.3% higher, extending gains as investors bought the dip. Bajaj Finance (+6.3%) led the index after strong loan growth, while Tata Motors (-9.2%) tumbled on earnings disappointment.
- Japan's Nikkei is +0.35% led by chip-equipment makers Tokyo Electron and Advantest, with focus on an upcoming BOJ speech that could hint at future tightening, the TOPIX is 0.30% higher. SoftBank has reported it will invest $25B in OpenAI, sparking optimism in AI-related, the stock is trading slightly lower although is slowly paring losses.
- Australia's ASX 200 is +0.7% and nearing record highs on rate cut bets after soft inflation data, boosting risk appetite. Buy now pay later firm ZIP money fell over 20% following an earnings miss.
- Indonesia's JCI fell 1.5% and saw the biggest regional decline as trading resumed post-holidays, with weakness in consumer and banking stocks amid concerns over Trump’s potential tariffs.
Overall, rate cut speculation, Fed clarity, and earnings surprises are shaping today’s market sentiment, while trade policy risks and central bank signals remain key catalysts ahead.
OIL: Crude Little Changed Ahead Of Key Events
Oil prices are little changed today after falling around a percent on Wednesday as the Fed left rates on hold and US crude inventories rose. WTI is higher at $72.65/bbl but off the intraday high of $73.07, while Brent is slightly lower at $76.55/bbl following a peak of $76.77. The USD index is down 0.2% which should provide some support to dollar-denominated crude.
- There are a number of key upcoming dates. 25% tariffs against Mexico and Canada are due to be introduced on February 1 but US commerce secretary appointee Lutnick said that they can still be avoided. Over half of US oil imports come from Canada and Midwest refiners are geared for Canada’s heavy crude. The BoC pointed out the uncertainties around trade with the US at its meeting this week.
- OPEC+ meets on February 3 and the US’ plan to increase output is to be discussed, according to Kazakhstan’s energy minister. US President Trump has also told the group to increase production to reduce oil prices. OPEC has delayed plans to begin normalising supply a number of times.
- Later US Q4 GDP, jobless claims, euro area Q4 GDP, December unemployment rate, European Commission January survey and January Spanish CPI print. The ECB is forecast to cut rates 25bp.
Gold Recovers from Move Post Fed Decision.
- Gold is having its worst week for 2025 so far with multiple forces controlling its fortunes.
- As a ‘safe-haven’ asset, gold typically gains in times of volatility and with tariff threats, tech sell-offs and the Fed’s interest rate decision, this week has seen plenty of that.
- Monday saw one of the biggest single day drops in gold for some time as volatility in the tech sector saw gold decline, with some traders indicating that gold positions were being liquidated due equities falling.
- The risk of tariffs is having a push pull effect as President Trump’s threats extend to commodities.
- Gold’s fortunes last year were positively impacted by the expectations for rate cuts yet with the Fed now seemingly on hold, that impetus appears to be waning.
- Opening at US$2,759.36 trended lower for much of the day reaching $2,744.87 around the Fed decision, before recovering a little to finish at $2,759.36 but staged a modest recovery throughout the Asian trading day to reach $2,763.00
UP TODAY (TIMES GMT/LOCAL)
| Date | GMT/Local | Impact | Country | Event |
| 30/01/2025 | 0630/0730 | ** |  FR | Consumer Spending |
| 30/01/2025 | 0630/0730 | *** | FR | GDP (p) |
| 30/01/2025 | 0700/0800 | ** |  SE | Retail Sales |
| 30/01/2025 | 0700/0800 | ** |  DE | Import/Export Prices |
| 30/01/2025 | 0800/0900 | ** | SE | Economic Tendency Indicator |
| 30/01/2025 | 0800/0900 | *** |  ES | HICP (p) |
| 30/01/2025 | 0800/0900 | ** |  CH | KOF Economic Barometer |
| 30/01/2025 | 0900/1000 | *** |  IT | GDP (p) |
| 30/01/2025 | 0900/1000 | *** | DE | GDP (p) |
| 30/01/2025 | 0930/0930 | ** |  GB | BOE M4 |
| 30/01/2025 | 0930/0930 | ** | GB | BOE Lending to Individuals |
| 30/01/2025 | 1000/1100 | ** |  EU | Unemployment |
| 30/01/2025 | 1000/1100 | * | EU | Consumer Confidence, Industrial Sentiment |
| 30/01/2025 | 1000/1100 | *** | EU | EMU Preliminary Flash GDP Q/Q |
| 30/01/2025 | 1000/1100 | *** | EU | EMU Preliminary Flash GDP Y/Y |
| 30/01/2025 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 30/01/2025 | 1000/1000 | ** | GB | Gilt Outright Auction Result |
| 30/01/2025 | 1315/1415 | *** | EU | ECB Deposit Rate |
| 30/01/2025 | 1315/1415 | *** | EU | ECB Main Refi Rate |
| 30/01/2025 | 1315/1415 | *** | EU | ECB Marginal Lending Rate |
| 30/01/2025 | 1330/0830 | * |  CA | Payroll employment |
| 30/01/2025 | 1330/0830 | *** |  US | Jobless Claims |
| 30/01/2025 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 30/01/2025 | 1330/0830 | *** | US | GDP |
| 30/01/2025 | 1345/1445 | EU | ECB Governing Council Meeting press conference | |
| 30/01/2025 | 1500/1000 | ** | US | NAR Pending Home Sales |
| 30/01/2025 | 1530/1030 | ** | US | Natural Gas Stocks |
| 30/01/2025 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 30/01/2025 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 31/01/2025 | 2330/0830 | * |  JP | Labor Force Survey |
| 31/01/2025 | 2330/0830 | ** | JP | Tokyo CPI |
| 31/01/2025 | 2350/0850 | ** | JP | Industrial Production |
| 31/01/2025 | 2350/0850 | * | JP | Retail Sales (p) |
| 31/01/2025 | 0030/1130 | * |  AU | Producer price index q/q |
| 31/01/2025 | 0700/0800 | ** | DE | Retail Sales |
| 31/01/2025 | 0730/0830 | ** | CH | Retail Sales |
| 31/01/2025 | 0745/0845 | *** | FR | HICP (p) |
| 31/01/2025 | 0745/0845 | ** | FR | PPI |
| 31/01/2025 | 0855/0955 | ** | DE | Unemployment |
| 31/01/2025 | 0900/1000 | *** | DE | North Rhine Westphalia CPI |
| 31/01/2025 | 0900/1000 | *** | DE | Bavaria CPI |
| 31/01/2025 | 0900/1000 | ** | EU | ECB Consumer Expectations Survey |
| 31/01/2025 | 1000/1100 | ** | IT | PPI |
| 31/01/2025 | 1300/1400 | *** | DE | HICP (p) |
| 31/01/2025 | 1330/0830 | *** | CA | Gross Domestic Product by Industry |
| 31/01/2025 | 1330/0830 | *** | US | Personal Income and Consumption |
| 31/01/2025 | 1330/0830 | *** | US | Employment Cost Index |
| 31/01/2025 | 1330/0830 | *** | CA | Gross Domestic Product by Industry |
| 31/01/2025 | 1330/0830 | US | Fed Governor Michelle Bowman |