Credit Agricole is out with a note at the end of last week saying that the dollar will remain in the crosshairs for trading this week. That as traders will have plenty to look forward to this week as well, following the key economic data trifecta last week.The firm argues that all things considered, the dollar could find some opportunities to seek relief in this kind of environment:"Looking ahead into next week, the ‘USD rebalancing’ theme could remain quite important and investors will scrutinise the TIC data for December looking for any indications that foreign demand for USTs and US stocks has started to taper off.In addition, market participants will focus on core PCE deflator data for December, PMIs for February as well as the minutes from the January FOMC meeting and Fedspeak. FX investors will further keep an eye out for any headlines regarding SCOTUS’ long-anticipated verdict on the trade tariffs of the Trump administration.In all, we continue to think that many Fed-related negatives are already in the price of the USD and would expect the currency to consolidate in the absence of data disappointments and/or dovish surprises from the Fed in the near-term. It would take evidence that international investors continued to buy US assets, however, to give the USD a more lasting reprieve."As a reminder, there are two key risk events to watch out for outside of the usual economic calendar this week. The first being the US Treasury TIC report for December 2025, which is scheduled for 18 February.The report continues to be a crucial one in scrutinising foreign investors' appetite for US debt. For some context, their holdings reached a record $9.36 trillion in November 2025. And that is despite a further drop in China holdings, which declined to its lowest since 2008.That being said, it is best to reminded that this data doesn't fully measure China's holdings of US Treasuries. It instead measures China's holdings of Treasuries in US custodians. That's a very important distinction to be mindful about. Why so you might ask?Because China could be, and almost certainly, is still buying Treasures via non-US custodians. And some of the biggest names in this context are the likes of Belgium and Luxembourg, whose holdings are going toe-to-toe with some of the major players in the world.And the other key outside risk event this week will be the potential US Supreme Court decision on Trump's tariffs. The next opinion hearing date is scheduled for 20 February, so that could introduce some end of week risk for markets to be mindful of.More on that: US Supreme Court says next Friday will be a decision day This article was written by Justin Low at investinglive.com.

That will make for a quieter start to the new week, not least with Chinese markets also out today. As a reminder, it will be a one week break for China in conjunction with the Lunar New Year holidays. So, that will sap out a chunk of liquidity in Asia trading at least for the week ahead.Anyway, the US holiday today gives markets some added time to digest the key happenings from last week. US data took center stage with the non-farm payrolls and inflation numbers being released on the same week. At the end of it all, traders pushed back Fed pricing slightly but I would argue it wasn't all too significant.The most notable pricing move was that the 25 bps rate cut in June was phased out. However, the odds of a June rate cut remain highly significant at around ~81%. By year-end, traders are still pricing in ~62 bps of rate cuts by the Fed for this year.In FX, the push and pull in the data releases is still leaving the dollar in a vulnerable spot. And the focus this week will once again be on whether markets will continue to choose to punish the dollar. That especially over the continued incoherent and uncertain approach on economic and geopolitical policies by the US administration, among other things.To start the day so far, the dollar remains mixed but little changed overall. USD/JPY remains in focus amid intervention risks, sitting up by 0.3% to 153.10 on the day. As long as price holds below the 155 mark, we might just be steering clear of the wrath of Tokyo officials. Meanwhile, EUR/USD is flat at 1.1865 and AUD/USD up just 0.1% to 0.7082 currently.In other markets, US futures are seen up 0.1% but again the cash market will be closed later. This comes after a bit of a rebound in Wall Street to prevent more battering of software stocks late on Friday. Here's the S&P 500 performance breakdown snapshot:So, the overall risk sentiment is keeping somewhat steady and muted to start the day. That even as the Nikkei retreats by over 1% so far in Asia trading.As for precious metals, we're seeing gold and silver stumble once again with the former dipping back under $5,000 with the latter down nearly 3% to $75.15 currently. This article was written by Justin Low at investinglive.com.

Japan bear flips & now bets on yen strength vs dollar, sterling & franc (sees +8% vs. CHF)Japan PM and BOJ chief Ueda will meet today at 5pm Tokyo timeWestpac targets 1.22 for EUR/USD and $1.41 GBP/USD (long horizon)China deploys ‘national team’ investors to cool AI stock surge, selling interventionJapan junior coalition leader backs food tax suspension, defends BOJ independenceSingapore January exports rise 9.3% but miss expectations, uneven trade recovery continuesJapan Q4 GDP rises just 0.2% annualised, misses forecasts & keeps BoJ on cautious pathJapan's economic growth in Q4 2025 misses estimatesInvestors turn optimistic on Chinese tech and housing policies into Lunar New YearWestpac: US resilience may delay final Fed rate cut to June 2026Weekend - US boards second Venezuela-linked oil tanker in Indian OceanIMF says Australia achieving soft landing but warns on inflation risks & fiscal loosenessNew Zealand January card spending mixed messagesNew Zealand services sector expands in January but momentum easesXi Jinping pushes domestic demand as China braces for rising global trade uncertaintyMonday open indicative forex prices, 16 February 2026Newsquawk Week Ahead: US PCE and GDP, FOMC Minutes, RBNZ, Flash PMIs, UK and Canada CPIAt a glance:Thin Asia trade as China’s Lunar New Year holiday shuts mainland markets.US markets will be closed for Presidents’ Day, with SIFMA recommending a full fixed-income close.NZ retail sales signal fragile demand ahead of this week’s RBNZ meeting.Japan Q4 GDP disappoints, rising just 0.2% annualised and 0.1% q/q.Yen softens post-GDP, with PM Takaichi set to meet BOJ Governor Ueda.It was a subdued session across Asia on the first day of China’s Lunar New Year holiday, with mainland markets closed for the week and additional closures scheduled in Singapore and Hong Kong. Trading conditions were further thinned by the US Presidents’ Day holiday, with US equity markets shut and SIFMA recommending a full closure for US dollar fixed-income trading.Ahead of this week’s Reserve Bank of New Zealand monetary policy decision, where a hold is widely expected, data showed New Zealand retail sales remain soft, underscoring still-fragile household demand.From Japan, fourth-quarter GDP figures disappointed. The economy expanded just 0.2% annualised, or 0.1% quarter-on-quarter, well below expectations. Private consumption and capital expenditure posted only modest gains, while exports fell 0.3%. Inflation pressures remain firm, keeping the Bank of Japan on a cautious normalisation path.Prime Minister Sanae Takaichi is scheduled to meet BOJ Governor Kazuo Ueda later today (5pm Tokyo / 0800 GMT / 0300 US Eastern), a discussion markets will watch closely for policy signals. The yen weakened modestly following the soft GDP release.Elsewhere in FX, major pairs were relatively steady amid the lighter liquidity backdrop.Regional equities were largely consolidating recent gains, with Japan’s weaker data taking some momentum out of what had been a strong rally.In corporate news, Japanese media reported that Starbucks Korea plans to open at least 100 new outlets this year. This article was written by Eamonn Sheridan at investinglive.com.

Investor turns bullish on Japan bonds and yen after election clarity.Summary: Bloomberg reports Nash turns bullish on JGBs, buying 10-year bonds after election clarity.Political stability seen as catalyst, with yields falling sharply since Takaichi’s win.Yen bought versus dollar and sterling, marking strategic FX repositioning.Forecast 8–9% yen appreciation, particularly against the Swiss franc.Shift reflects diversification away from US assets amid policy uncertainty.A prominent global bond investor has turned bullish on Japanese government bonds and the yen following Prime Minister Sanae Takaichi’s decisive election victory, arguing that the removal of political uncertainty marks a turning point for Japan’s markets.According to Bloomberg, Mark Nash of Jupiter Asset Management has bought 10-year Japanese government bonds (JGBs), closing a long-standing short position and positioning for a sustained rally. He views Takaichi’s strong mandate as a stabilising force that provides policy clarity and reduces concerns about fiscal and monetary direction.Japanese bond yields had climbed to multi-decade highs amid rising global rates and domestic political uncertainty. However, since the election, long-dated yields have fallen sharply, with the 30-year yield dropping around 40 basis points in less than a month as investors reassessed risk. Nash argues that the clarity provided by the election outcome has shifted sentiment at the long end of the curve.Alongside the bond call, Nash is making an explicit foreign exchange bet. He has bought the yen against both the US dollar and sterling and is forecasting a significant appreciation against the Swiss franc. He sees potential for the yen to strengthen by 8% to 9% versus the franc and other currencies, arguing that Japan’s fiscal and political backdrop now compares more favourably with traditional safe-haven peers.The shift marks a notable reversal in strategy. Nash had previously maintained a short position in Japanese debt, benefiting from rising yields as policy normalisation gathered pace. His fund returned 7.6% over the past year, ranking strongly among peers.The broader thesis rests on the view that Japan’s political stability, combined with clearer policy direction and improving investor confidence, could attract foreign capital at a time when uncertainty around US policy encourages diversification away from dollar assets.If the yen’s long-standing underperformance reverses meaningfully, it would represent a structural change in global currency positioning. This article was written by Eamonn Sheridan at investinglive.com.

Summary:Takaichi and Ueda meet for first time since election win, amid rate-hike speculation.Previous November meeting preceded December hike to 0.75%.Yen has rebounded nearly 3%, after earlier weakness near 160 per dollar.Markets price ~80% chance of April hike, as inflation stays above target.Two BOJ board seats opening, giving Takaichi potential influence over policy direction.Japanese Prime Minister Sanae Takaichi is set to hold her first bilateral meeting with Bank of Japan Governor Kazuo Ueda since securing a landslide election victory, in a closely watched encounter that could shape expectations for further interest rate hikes.The meeting, scheduled for 5 p.m. local time (0800 GMT/ 0300 US Eastern time), comes as markets increasingly speculate that persistent inflation and earlier yen weakness may prompt the central bank to tighten policy again as soon as March or April. The BOJ head typically holds a bilateral meeting with the premier about once every quarter to discuss economic and price developments. Investors have drawn parallels with the pair’s previous face-to-face discussion in November, which preceded the BOJ’s December rate hike to 0.75%, a 30-year high. At that time, the yen had been under heavy pressure amid concerns the government might resist further tightening. However, Governor Ueda signalled that the central bank was proceeding gradually toward achieving its inflation target, and policymakers followed through with a rate increase weeks later.Since then, currency dynamics have shifted. After sliding close to the psychologically significant 160 level against the dollar in January, the yen has rebounded sharply, gaining nearly 3% last week, its strongest advance since November 2024. The dollar is trading around 153.10 as I post. The stronger yen could influence the tone of policy discussions. While Takaichi has previously been associated with expansionary fiscal and monetary views, she has largely refrained from direct comment on BOJ decisions since the election. Under Japanese law, the central bank operates independently, though historically it has faced political pressure during periods of sharp currency moves.Inflation has remained above the BOJ’s 2% target for nearly four years, and the bank has repeatedly stressed its readiness to continue normalising policy after exiting large-scale stimulus in 2024. Markets are currently pricing roughly an 80% probability of another rate hike by April.Beyond near-term policy, Takaichi will also have the opportunity to shape the BOJ’s future direction, with two seats on the nine-member policy board set to open later this year.Bank of Japan Governor Ueda This article was written by Eamonn Sheridan at investinglive.com.

Westpac says global growth rotation may weigh on the dollar.Summary:Westpac sees dollar drifting lower, with risks skewed to the downside.US growth expected above trend in 2026, driven by consumers and tech investment.Inflation pressures likely to persist, limiting Fed rate cuts to one more move.Euro and sterling forecast to outperform, reaching $1.22 and $1.41 by mid-2027.Asia currencies also seen strengthening, led by gradual renminbi gains.Westpac says the US dollar is likely to edge lower over the next 12 to 18 months, even though the bank remains constructive on the US economic outlook.The dollar rallied from 97.9 in late December to 99.4 in mid-January before reversing sharply to a near four-year low of 96.2. It is currently trading around 97.0 — roughly 15% below its mid-2022 peak and about 1.5% beneath its 10-year average. Westpac’s baseline view is that the dollar will settle somewhere between current levels and its 20-year average, but risks are skewed to the downside.Importantly, Westpac is not bearish on the US economy. The bank expects another year of above-trend growth in 2026, led by resilient consumer spending and continued investment in technology infrastructure. It anticipates the labour market will remain effectively fully employed, with wage growth continuing to outpace inflation.However, Westpac argues that inflation risks remain elevated. Capacity constraints across housing, transport, energy and healthcare, alongside the lagged effects of tariffs, are likely to keep price pressures above the Federal Reserve’s 2% target. This underpins its expectation for only one additional rate cut from the Federal Open Market Committee, a more cautious stance than current market pricing for at least two cuts this year.So why the softer dollar outlook? Westpac points to improving opportunities elsewhere. It argues that the strong run in US equities may limit further relative outperformance, while growth narratives in Europe and Asia are increasingly focused on structural expansion rather than trade risks.The bank expects the euro to rise toward $1.22 and sterling toward $1.41 by mid-2027. It sees more gradual gains for the Canadian dollar and yen, and anticipates further appreciation in the renminbi as Asia’s growth prospects strengthen. USD/CAD projected to ease to 1.34 by mid-2027 and 1.30 by mid-2028USD/JPY 145 by end-2026 and 139 by mid-2028 USD/CNY seen advancing toward 6.35 over the next two years This article was written by Eamonn Sheridan at investinglive.com.

Beijing deploys state-linked investors to moderate AI-driven stock speculation.ps. Chinese markets are closed this week:Lunar New Year 2026: Mainland China markets are scheduled to be closed February 16–23Summary:China’s “national team” selling equities, aiming to cool AI-driven speculation.Shift from traditional buyer role, previously used to stabilise markets during downturns.~US$110bn ETF outflows cited, consistent with state-linked selling activity.Group controls significant market exposure, estimated at around 6% of A-share capitalisation.Policy goal: foster stable, long-term equity culture while avoiding bubbles.China’s state-linked “national team” of investors has shifted into selling mode as authorities seek to temper excess speculation in artificial intelligence-linked stocks, according to reporting by the Wall Street Journal.The group, widely understood by market participants to comprise state-backed funds and financial institutions, typically functions as a stabilisation force during market stress. It has historically stepped in as a buyer of exchange-traded funds and index products during periods of sharp volatility, including the 2015 market rout and more recent tariff-driven turbulence.However, officials appear increasingly concerned about overheating conditions in parts of the equity market. Recent strong gains in AI-related shares and record trading volumes have prompted policymakers to prioritise orderly, long-term capital formation over speculative surges. Regulatory officials have emphasised the need to prevent sharp market swings and encourage rational investment behaviour.Data cited by Goldman Sachs indicate nearly US$110 billion in outflows from China-focused domestic ETFs in the latter half of January, suggesting significant selling pressure consistent with national team activity. Analysts describe the approach as calibrated — restraining momentum without abruptly reversing it.The national team is believed to include entities linked to China’s sovereign wealth apparatus, margin financing vehicles and state-backed asset managers. Estimates suggest the group holds exposure equivalent to roughly 6% of China’s A-share market capitalisation, underscoring its capacity to influence liquidity and sentiment.Beijing’s objective appears twofold: nurture a sustainable equity culture while preventing destabilising bubbles. Household financial assets remain heavily concentrated in property, and authorities want deeper capital markets to diversify savings channels and support corporate funding.At the same time, policymakers are wary of retail-driven speculation, given that individual investors account for a majority of daily trading activity. The intervention signals a preference for what some analysts describe as a “slow bull” environment — one marked by steady gains rather than rapid, volatility-prone rallies. This article was written by Eamonn Sheridan at investinglive.com.

Japan junior coalition partner leader urges tax relief while defending BOJ independence.Summary:Junior coalition leader backs swift food tax suspension, targeting fiscal 2026 rollout.Foreign reserves flagged as funding option, potentially reducing need for new debt issuance.BOJ independence emphasised, with rate decisions left to the central bank.Further rate hikes possible, given weak yen and inflation considerations.Policy mix balancing act, combining fiscal support with cautious monetary tighteningThe head of Japan’s junior ruling coalition partner has called for swift implementation of a two-year suspension of the food sales tax while warning politicians not to interfere in Bank of Japan monetary policy decisions.Hirofumi Yoshimura, leader of the Japan Innovation Party (Ishin), said the government should move at the earliest possible date to suspend the current 8% consumption tax on food, arguing that households continue to face pressure from rising living costs. Japan levies an 8% rate on food and 10% on most other goods. Prime Minister Sanae Takaichi has pledged to roll out the suspension during fiscal 2026, and Yoshimura’s comments suggest coalition backing for proceeding without delay.To fund the measure, Yoshimura said authorities should consider tapping non-tax revenue sources, including potential surpluses from Japan’s vast foreign exchange reserves. Japan holds around $1.4 trillion in reserves, traditionally viewed as a buffer for currency intervention. Drawing on these funds could help finance the tax relief without issuing additional government debt, though it would likely draw scrutiny from markets concerned about fiscal discipline.On monetary policy, Yoshimura stressed that decisions on interest rates should remain solely within the Bank of Japan’s remit. While acknowledging that further rate hikes could increase mortgage costs and weigh on households, he said the current weak yen environment means additional tightening is possible. The BOJ raised its policy rate to 0.75% in December and markets are pricing in the possibility of another increase by April.Yoshimura’s remarks highlight the coalition’s balancing act: supporting fiscal stimulus to bolster growth while signalling respect for central bank independence. The weak yen remains a focal point for investors, as it supports exporters but increases import costs and inflation pressures. Officials have refrained from specifying currency levels that would trigger intervention, emphasising instead the need for timely and appropriate responses.The comments reinforce expectations that Japan’s policy mix will combine targeted fiscal support with gradual monetary normalisation as authorities seek to manage currency volatility and inflation risks. This article was written by Eamonn Sheridan at investinglive.com.

Singapore exports grow solidly but miss forecasts as electronics outpace other sectors.Summary: January NODX rose 9.3% y/y, below expectations of 12.1%.Electronics led gains, driven by integrated circuits and disk media.Non-electronics exports declined, highlighting uneven sector performance.Exports to China, Hong Kong and EU rose, while US and Indonesia shipments fell.Forecasts recently upgraded, with 2026 NODX seen at 2%–4% growth.Singapore’s non-oil domestic exports (NODX) rose 9.3% year-on-year in January, extending the recovery in trade flows but falling short of market expectations for a 12.1% increase.The expansion was driven primarily by electronics, with strong gains in integrated circuits and disk media products. In contrast, non-electronics exports contracted, highlighting the uneven nature of the rebound across sectors.The latest figures come just days after authorities upgraded both growth and export forecasts for 2026, following stronger-than-expected economic momentum at the end of 2025. Fourth-quarter GDP expanded 6.9% year-on-year and 2.1% quarter-on-quarter, prompting policymakers to lift the 2026 GDP growth outlook to 2%–4%, from 1%–3% previously. Enterprise Singapore also raised its full-year NODX forecast to 2%–4%, up from 0%–2%.January’s export performance suggests that trade momentum remains intact, though not accelerating as quickly as some had anticipated. Among key markets, shipments to China, Hong Kong and the European Union increased compared with a year earlier. However, exports to the United States and Indonesia declined, pointing to persistent pockets of softness in external demand.The divergence between electronics and non-electronics categories underscores Singapore’s continued reliance on the global semiconductor cycle. Demand linked to artificial intelligence investment and advanced manufacturing remains a supportive factor, but broader trade conditions appear more mixed.While the 9.3% growth rate represents a solid start to the year, the miss relative to expectations may temper enthusiasm following the recent upgrades to official forecasts. Even so, with policymakers projecting improved global demand conditions and continued resilience in manufacturing and trade-related services, Singapore’s export sector appears positioned for moderate expansion through 2026 — albeit with risks from external demand fluctuations and geopolitical uncertainty still in play.ps. Singapore markets will be impacted by the Lunar New Year holidays this week. This article was written by Eamonn Sheridan at investinglive.com.

Japan ekes out Q4 growth, but momentum remains weak despite easing tariff drag.SummaryQ4 GDP barely positive, rising 0.1% q/q and 0.2% annualised, well below expectations.Private consumption slowed, up 0.1% q/q amid persistent food price pressures.Capex underwhelmed, increasing just 0.2% versus forecasts of 0.8%.Exports fell 0.3%, with external demand contributing zero to overall growth.GDP deflator rose 3.4% y/y, highlighting ongoing inflation pressures.Japan’s economy returned to marginal growth in the fourth quarter of 2025, but the expansion fell well short of expectations, underscoring the fragile nature of the recovery.Preliminary data showed real GDP rose 0.1% quarter-on-quarter in the October–December period, following a revised 0.7% contraction in Q3. On an annualised basis, growth came in at just 0.2%, significantly below market expectations for a 1.6% gain and weaker than forecasts of a 0.4% quarterly rise.Private consumption, which accounts for more than half of Japan’s economic output, increased 0.1% in Q4, matching expectations but slowing from the 0.4% pace recorded previously. Persistently elevated food prices continue to weigh on household spending, limiting momentum in domestic demand.Business investment showed only modest improvement. Capital expenditure rose 0.2% quarter-on-quarter, undershooting expectations for a 0.8% gain and marking only a partial rebound from prior weakness.External demand provided no net boost to growth. Exports declined 0.3% in the quarter, though the fall was milder than in Q3, suggesting the initial shock from US tariff measures may be easing. Net external demand contributed zero percentage points to overall GDP, compared with a drag in the previous quarter. Domestic demand also made a neutral contribution.Inflationary dynamics remain firm, with the GDP deflator rising 3.4% year-on-year, highlighting persistent price pressures even as real growth remains subdued.The data suggest Japan has stabilised after a sharp contraction but is far from a strong recovery. For the Bank of Japan, the modest return to growth provides some reassurance as it continues policy normalisation, though the softness in private demand and investment signals that tightening will likely proceed cautiously. Meanwhile, expansionary fiscal plans under Prime Minister Sanae Takaichi add complexity to the policy mix. This article was written by Eamonn Sheridan at investinglive.com.

GDP growth fell well short of estimates. Preview is hereI'll have more to come on this separately, details and analysis. ADDED, here: Japan Q4 GDP rises just 0.2% annualised, misses forecasts & keeps BoJ on cautious path This article was written by Eamonn Sheridan at investinglive.com.

Optimism builds for Chinese equities as policy support and tech innovation offset lingering risks.Summary:Chinese equities rallied strongly in 2025, supported by exports, AI advances and policy easing.Technology and housing stabilisation policies are key areas of investor optimism.Corporate governance and capital returns improving, with rising dividends and buybacks.Earnings growth expected to drive 2026 performance, after valuation-led gains last year.Risks remain from trade tensions, weak consumer confidence and AI investment volatility.Note: Chinese markets are closed all this week:Lunar New Year 2026: Mainland China markets are scheduled to be closed February 16–23As China moves into the Lunar New Year holiday period, investors are expressing renewed optimism toward Chinese equities, particularly in technology and policy-driven segments such as housing. The Year of the Horse, traditionally associated with boldness and forward momentum, coincides with a market backdrop that has already delivered strong gains over the past 12 months.Chinese equities posted robust returns in 2025, supported by resilient export performance, advances in artificial intelligence and targeted policy easing. Economic growth met official targets despite ongoing property sector strains and external trade frictions. Investors argue that the rally was initially driven by a re-rating of valuations from depressed levels, but increasingly point to structural improvements that could sustain momentum.Technology remains a focal point. Domestic innovation in AI models and continued investment in data centres have strengthened confidence in China’s push toward technological self-sufficiency. Meanwhile, corporate behaviour is evolving. Companies are placing greater emphasis on capital discipline, governance standards and shareholder returns, with dividend payouts and buybacks rising meaningfully over recent years. This shift is seen as enhancing the quality and durability of equity returns.Valuations, while no longer at distressed levels, are still viewed as trading at a discount to global peers. Investors expect earnings growth to play a larger role in 2026 performance after last year’s valuation-driven rebound. Financials, internet platforms and select consumer names are among the preferred exposures.Policy support is another key theme. Authorities have introduced measures aimed at stabilising the property market and lowering financing costs. There are also signs of renewed emphasis on boosting domestic consumption, including potential easing of restrictions previously imposed on property developers. However, consumer confidence surveys remain subdued, reflecting lingering concerns about housing prices and labour market conditions.Risks persist. China’s economy continues to rely heavily on investment and exports, leaving it vulnerable to renewed trade tensions or shifts in global demand. A slowdown in AI-related investment could also weigh on growth, given the increasing weight of the technology sector.Even so, many investors believe structural reforms, policy backing and innovation-driven growth leave Chinese equities positioned for further gains, provided earnings begin to justify valuations. This article was written by Eamonn Sheridan at investinglive.com.

Westpac says US resilience limits scope for further Fed easing.Summary:US growth remains resilient, with activity tracking above trend despite uncertainty.Labour market stable, unemployment steady around 4.3% and wage growth firm. Household balance sheets strong, wealth at record highs supporting consumption. Inflation risks persist, particularly in core services, complicating Fed easing. Westpac delays final rate cut call to June 2026, but sees risk the Fed stays on hold.Westpac argues the US economy continues to display notable resilience, with little evidence that growth is meaningfully slowing despite elevated uncertainty and political disruption.The bank notes that activity remained firm through the turn of the year, with the Atlanta Fed’s GDPNow tracker indicating output growth stayed above trend even during the longest federal government shutdown on record. After five years of sustained outperformance, Westpac expects growth to moderate toward trend in 2026, but sees little risk of a sustained downturn in momentum.Labour market conditions, in its assessment, have stabilised rather than deteriorated. Nonfarm payroll growth, while softer through mid-2025, has averaged roughly 73,000 jobs per month since October. The unemployment rate has remained contained in a narrow 4.2%–4.4% range for nearly a year. Broader indicators, including wage measures and the Employment Cost Index, continue to signal firm nominal income growth, while recent improvements in ISM employment components suggest hiring intentions have steadied.Household balance sheets are described as robust. Wealth has reached record levels, supported by gains in equities and property markets. Many households locked in historically low borrowing costs during the pandemic, while marginal borrowers are now seeing adjustable rates ease modestly. This combination, Westpac argues, leaves consumers well positioned to sustain renovation activity, housing demand and discretionary spending into 2026.Sentiment remains the principal vulnerability. Consumer confidence measures sit well below historical averages, reflecting lingering concerns over inflation’s impact on real incomes. Businesses, meanwhile, face two-sided risks: potential supply constraints from tariffs and labour shortages, alongside uncertainty over consumers’ pricing tolerance.Against this backdrop, Westpac cautions that persistent above-trend consumption and capacity constraints may complicate the Federal Reserve’s task of returning inflation to its 2% target. Core services inflation remains elevated. The bank has therefore delayed its expectation for the final rate cut of this cycle to June 2026, though it acknowledges low conviction and sees a greater probability that the Federal Open Market Committee remains on hold if growth and inflation outperform. This article was written by Eamonn Sheridan at investinglive.com.

Washington escalates sanctions enforcement with another long-range tanker interception.Posting this with Globex oil trade about to open for the new week. Summary:US boards second tanker, intercepting the Panama-flagged Veronica III in the Indian Ocean. Operation followed long-distance tracking from the Caribbean amid sanctions enforcement. Vessel carried 1.9 million barrels and is sanctioned by the US Treasury. Part of broader blockade strategy, targeting Venezuelan oil exports under Trump’s directive. Exports sharply curtailed, with loadings reportedly halved since enforcement intensified.The United States has boarded a second oil tanker linked to Venezuelan exports in the Indian Ocean, escalating enforcement of sanctions aimed at curbing Caracas’ oil trade.The Pentagon confirmed that US forces conducted what it described as a “right-of-visit, maritime interdiction and boarding” operation against the Panama-flagged tanker Veronica III. The vessel had been tracked from the Caribbean Sea across thousands of nautical miles before US forces intercepted it in the Indo-Pacific region. Officials did not specify whether the ship was seized outright or permitted to continue its voyage following inspection.Washington said the tanker was operating in defiance of measures imposed under President Donald Trump’s directive to quarantine sanctioned Venezuelan oil shipments. The administration has intensified efforts to restrict exports from Venezuela, targeting vessels suspected of transporting crude in violation of US sanctions.The Veronica III reportedly departed Venezuela on 3 January carrying approximately 1.9 million barrels of crude oil. According to shipping monitors, the vessel has been involved in transporting sanctioned oil, including cargoes linked to Venezuela, Russia and Iran, since 2023. It is currently subject to sanctions from the US Treasury Department.This marks the second interdiction in the Indian Ocean within a week. US forces previously boarded and inspected the tanker Aquila II, which had also been tracked over long distances. The Pentagon’s messaging stressed that geographic distance would not shield sanctioned shipments from enforcement, underscoring the global reach of US naval operations.The broader crackdown has significantly curtailed Venezuelan crude exports. Since late last year’s blockade announcement, only shipments associated with Chevron and bound for the United States have continued operating largely uninterrupted. Independent estimates suggest Venezuelan oil loadings have roughly halved in recent months.The move signals Washington’s willingness to project power well beyond regional waters in order to enforce energy sanctions, reinforcing geopolitical pressure on Caracas and tightening constraints on global flows of sanctioned crude. This article was written by Eamonn Sheridan at investinglive.com.

IMF says Australia is landing softly, but inflation and global risks demand policy vigilance.Summary:IMF sees Australia achieving a soft landing, with growth rebounding to around 2% after a weak 2024.Inflation eased then re-accelerated, with underlying price pressures back above 3% in late 2025.Growth expected to hold near 2% in 2026, supported by monetary easing and firmer private demand.Risks skewed to slower growth and higher inflation, amid global trade uncertainty and domestic supply constraints.Policy guidance: vigilance required, with support for RBA’s data-dependent stance and medium-term fiscal consolidation.The International Monetary Fund has concluded its 2026 Article IV consultation with Australia, assessing the economy as navigating a “soft landing” but warning that risks remain tilted toward slower growth and renewed inflation pressures.Economic momentum improved through 2025, with GDP growth rising to 2.1% year-on-year in the September quarter after a subdued 2024. The recovery has been supported by gradually strengthening private demand. As spare capacity narrowed, inflation eased through mid-2025, allowing monetary policy to be loosened. However, price pressures have since re-intensified, with underlying inflation climbing back above 3% in the third quarter of 2025.Labour market conditions are gradually softening from previously tight levels. The unemployment rate has edged up to 4.3%, though this remains low by historical standards. Meanwhile, easing financial conditions have contributed to a rebound in house prices, and dwelling investment is beginning to recover.Looking ahead, the IMF expects the expansion to continue. Growth is estimated at 1.9% for 2025 and forecast to rise to 2.1% in 2026, supported by the lagged effects of earlier monetary easing and firmer consumer sentiment. Inflation is projected to return to the midpoint of the Reserve Bank of Australia’s 2–3% target band in the second half of 2027 as services price pressures moderate. Wage growth is anticipated to slow further, partly reflecting weak productivity performance.The Fund cautioned that risks remain skewed to the downside. Global trade tensions, financial market volatility and commodity price swings could weigh on demand, while domestic supply constraints and persistent labour tightness may prolong inflation. Climate risks and shifting global energy demand also pose medium-term challenges.Directors endorsed the Reserve Bank of Australia’s recent policy tightening and its data-dependent approach, emphasising the need for vigilance amid uncertainty. They welcomed progress in strengthening central bank governance and communication.On fiscal policy, the IMF supported medium-term consolidation to rebuild buffers, alongside targeted reforms to lift productivity and improve housing supply. While financial stability risks are viewed as contained, directors stressed continued supervision, macroprudential flexibility and coordinated structural reform to bolster long-term growth and resilience. This article was written by Eamonn Sheridan at investinglive.com.

New Zealand retail card spending -1.1% m/m in January, reversing December’s +0.1%. Total card spending also declined, -0.7% on the month after a 1.0% fall previously.In annual terms, electronic retail card spending edged up 0.4% y/y.Card spending data covers around 68% of core retail sales in NZ. Its used as the main retail sales indicator for the country. This article was written by Eamonn Sheridan at investinglive.com.

NZ services expand modestly, but confidence and hiring remain subdued.Summary:PSI slips but stays in expansion, easing to 50.9 from 51.5 and remaining above the 50 threshold.Growth below long-run average, with January’s reading under the historical norm of 52.8.Activity and new orders positive, signalling ongoing turnover and forward demand support.Employment and inventories weak, both in contraction, pointing to cautious hiring and stock management.Confidence still fragile, with negative commentary rising despite signs the broader economy is stabilising.New Zealand’s services sector remained in expansion territory at the start of 2026, although momentum eased slightly from the previous month.The BNZ–BusinessNZ Performance of Services Index (PSI) slipped to 50.9 in January from 51.5 in December. While still above the 50-point threshold that separates expansion from contraction, the reading was 0.8 points lower on the month and below the long-run survey average of 52.8. The data suggest the sector is growing, but only modestly, and remains some distance from a robust recovery.Within the detail, performance was mixed. Two of the five key sub-indices remained in expansion. Activity and sales led the gains at 54.2, signalling that some firms continue to see solid turnover. New orders also stayed positive at 51.8, pointing to a degree of forward demand. However, stocks/inventories fell back into contraction at 49.7, while employment weakened further to 49.1, indicating ongoing caution around hiring.Business sentiment remains fragile. Nearly 59% of comments received in January were negative, a noticeable increase from December and November. Respondents cited a combination of seasonal factors — including the Christmas–New Year holiday period and related shutdowns — alongside subdued enquiry levels and an extended post-holiday lull. Elevated living and operating costs were also highlighted as ongoing pressures.The composite Performance of Composite Index (PCI), which combines services and manufacturing indicators, eased to 52.5 from a previously reported 53.9. Despite the pullback, it continues to signal overall economic expansion.BNZ economists argue that the broader data flow suggests the economy may be turning a corner after a challenging period. While growth remains uneven and confidence subdued, recent indicators have been consistent with a gradual stabilisation in activity.The January readings reinforce the narrative of an economy moving forward, but cautiously. Expansion is present, though not yet broad-based, and labour market softness remains a key area to watch. This article was written by Eamonn Sheridan at investinglive.com.

Beijing pivots toward consumption-led growth as export reliance faces mounting global headwinds.While Chinese President Xi Jinping spoke on Sunday, take note that Chinese markets are closed all this week:Lunar New Year 2026: Mainland China markets are scheduled to be closed February 16–23Summary:Xi pivots toward domestic demand, calling consumption and investment the “main driver” of growth.China bracing for global uncertainty, despite a record trade surplus amid US tariff tensions.Exports masked weak domestic momentum in 2025, with 5% GDP growth supported by strong semiconductor shipments.Policy focus on incomes and innovation, including higher pensions, livelihood-linked investment and new growth industries.Measured fiscal support ahead, with no large stimulus planned, but continued efforts to stabilise property and employment.Chinese President Xi Jinping has underscored the need to make domestic demand the primary engine of China’s economic growth, signalling a strategic pivot as global trade uncertainty intensifies.In remarks delivered at December’s Central Economic Work Conference and published on Sunday, Xi stressed that growth must be anchored in consumption and investment at home. He called for coordinated efforts to stimulate spending and expand investment while fully utilising what he described as the advantages of China’s “super-large-scale market.” Improving household livelihoods, stabilising investment and fostering sustainable long-term growth were positioned as central priorities.The policy blueprint reflects Beijing’s expectation of a more volatile external environment. China posted a record trade surplus last year despite the ongoing tariff conflict with the United States, but policymakers appear increasingly cautious about relying heavily on export-led expansion. Rising protectionism and pushback from trading partners over low-cost Chinese goods have heightened the urgency of rebalancing growth toward domestic consumption.China’s economy expanded 5% last year, with exports offsetting softer private consumption and a sharp downturn in investment, particularly in property. However, officials acknowledge that such an imbalanced model may prove difficult to sustain as geopolitical and trade risks mount.Xi reiterated that innovation will remain central to the country’s development strategy, pledging to accelerate the cultivation of new growth drivers and emerging industries. At the same time, measures aimed at strengthening household income — including higher wages and pensions for rural and urban residents — are intended to reinforce consumer spending power. Investment projects tied directly to public welfare are also set to receive greater emphasis.Additional priorities include advancing high-quality development, promoting green transformation, continuing economic opening, and addressing structural distortions. Xi urged officials to curb destructive price competition among firms — part of the so-called “anti-involution” campaign — while also stabilising the property sector and supporting employment for graduates and migrant workers.Although Beijing has signalled continued policy support, it is not preparing a large-scale stimulus surge. Authorities plan to maintain what they describe as a necessary fiscal deficit and steady government spending into 2026, suggesting a calibrated rather than aggressive approach to sustaining growth. This article was written by Eamonn Sheridan at investinglive.com.

The key market influence today is the closure of Chinese mainland markets and half days on ly in Hong Kong and Singapore (more detail below the screenshot). The calendar lists China house price data due today. These were published last week:China house prices continue their death spiral: January -3.1% y/y and -0.4% m/mJapanese economic growth data will be eyed. Fourth-quarter GDP is expected to have expanded by 0.4% from the previous quarter, lifting annual growth to 1.6%. Analysts see improvement coming from a recovery in construction activity as the drag from temporary safety rules eases, alongside firmer export performance supported by strong global demand for semiconductors.Trade figures for January point to ongoing momentum in chip exports. Favourable calendar effects and a low comparison base are also likely to flatter headline export growth rates.The boost from additional fiscal spending is projected to show up more clearly in the first quarter of 2026 rather than in the fourth quarter data. Meanwhile, any fallout from tensions between China and Japan is not expected to have had a meaningful impact on Q4 results.Overall, steady political conditions and resilient semiconductor demand are viewed as key supports for both manufacturing output and services activity.I posted all this last week, repeating now ICYMI:Lunar New Year (LNY) 2026 brings thin liquidity and China-offshore price discovery, with travel/consumption the key narrative.Summary:Lunar New Year 2026 (Year of the Horse) falls on Tuesday 17 Feb.Mainland China markets are scheduled to be closed Feb 16–23, reopening Tue Feb 24.Hong Kong has half-day trading on Mon Feb 16, is closed Feb 17–19, and reopens Fri Feb 20.Singapore (SGX) has half-day trading on Mon Feb 16 and is closed Feb 17–18.China is running an extended nine-day Spring Festival holiday (Feb 15–23) with officials expecting a record travel surge, supportive for consumption narratives, but liquidity will be thin.Lunar New Year 2026 lands on Tuesday 17 February and, as usual, it will reshape trading conditions across mainland China, Hong Kong and Singapore, with liquidity effects often as important as the headlines.Onshore, China’s equity market enters its biggest scheduled trading interruption of the year.The Shenzhen Stock Exchange calendar shows the market closed from Monday 16 February through Monday 23 February, resuming Tuesday 24 February.The Shanghai Stock Exchange (SSE) will be closed for the 2026 Lunar New Year (Spring Festival) from Monday, February 16, 2026, to Monday 23 Feb 2026 (inclusive) Reopens: Tuesday 24 Feb 2026With A-shares shut, price discovery shifts offshore (CNH, H-shares, ADRs, commodities proxies), while onshore macro/credit headlines can “bottle up” and reprice quickly when domestic trading resumes.This year the macro overlay is the extended nine-day public holiday (Feb 15–23) and a policy push to encourage spending and travel, with officials projecting a record travel rush. That tends to support short-term themes in consumer, travel, catering, duty-free and tourism names, while also lifting scrutiny on high-frequency indicators (mobility, domestic flight bookings, hotel occupancy, box office, and retail receipts) as a real-time read on confidence.Hong Kong becomes the key regional venue for China beta during the A-share closure. HKEX lists half-day trading on Monday 16 February (Lunar New Year’s Eve) and full market holidays Tuesday 17 through Thursday 19 February, with normal trade resuming Friday 20 February. Expect thinner depth, wider spreads and a higher sensitivity to CN headlines.Singapore also sees disrupted liquidity. SGX notes half-day trading on 16 February, with the market closed 17–18 February. Regionally, the practical market impact is a short window where positioning gets lighter, volatility can be jumpy on small flows, and “reopen gaps” become a feature, especially if FX or commodities move sharply while China is closed. This article was written by Eamonn Sheridan at investinglive.com.

Not too much change from late Friday:EUR/USD 1.1875 USD/JPY 152.66 GBP/USD 1.3641 AUD/USD 0.7072 USD/CAD 1.3609 USD/CHF 0.7685NZD/USD 0.6033I'll be back with weekend news soon. This article was written by Eamonn Sheridan at investinglive.com.