Oil prices are sliding this morning following as an over-supplied market (API reported a huge 11.4mm barrel build last week) beats the geopolitical risk premia (with the US poised to attack Iran).

“Iran, rather than backing down and agreeing to all and any term [U.S. President Trump] is placing on the table (as he had expected), is instead daring him to attack.

“Just you try it and you will see what you will get!” is kind of what Iran implicitly said to Trump when it held military drills in the Straight of Hormuz last week,” Bjarne Schieldrop, chief commodities analyst at SEB Research, wrote.

But, prices dipped into negative territory after a Hezbollah official said the group will not intervene in the event of limited US strikes on Iran, AFP reported.

“My preference is to solve this problem through diplomacy, but one thing is certain: I will never allow the world’s number one sponsor of terror, which they are by far, to have a nuclear weapon,” Trump said on Tuesday.

Nevertheless, The US has ordered the biggest military build-up in the Middle East since the second Gulf war in 2003, including two aircraft carriers. America is adding even more assets to the region, deploying 12 stealth F-22 fighter jets to Israel, according to CNN, which cited a defense official.

“So long as we remain in this realm of uncertainty, oil prices are more prone to upside risk on any headlines out of the US-Iran talks,” said Samantha Hartke, head of market analysis for the Americas at Vortexa Ltd.

“Our view is that a prolonged disruption is unlikely given the onerous effect that will have on Iranian trade flows and revenues,” she added, referring to Hormuz.

So will the official data confirm API’s ugly over-supplied build signal?

API

Crude +11.4mm

Cushing +1.8mm

Gasoline -1.5mm

Distillates -2.8mm

DOE

Crude +15.99mm – biggest build since Feb 2023

Cushing +881k

Gasoline -1.01mm

Distillates +252k

The official data confirmed a huge inventory build for crude stocks in the US (15.99mm barrels is the biggest build since early Feb 2023), reverses some of the bumper draws we’ve seen in the last few weeks. The rest of the energy complex was ‘meh’…

Source: Bloomberg

Don’t get too excited though as a huge jump in the adjustment factor is a sign that this data is likely still being impacted by the bad weather of recent weeks…

Source: Bloomberg

Crude production dipped last week…

Source: Bloomberg

WTI slid before the DOE data but is holding in the red for now after the huge crude build…

Source: Bloomberg

Despite the sizable builds, Bloomberg notes that this week has brought fresh evidence of how the tide is turning in favor of those who believe crude can surprise to the upside.

On Monday, shale giant Diamondback Energy said the widely anticipated “wave of oversupply” is being deferred further out in time, a view echoed the following day by Baker Hughes.

Meanwhile, Goldman Sachs raised its forecasts for Brent crude prices, saying that while supply is still expected to exceed demand this year, the excess will continue to be diverted to less-visible storage hubs.

Additionally, OPEC+ delegates firmed up expectations that key members will agree to resume modest supply increases in April when they meet this weekend.

While that decision may end up adding more barrels onto an already-oversupplied world market, it’s also a sign of the undimmed confidence among top Middle East producers that the universally bearish view is overdone, and that extra barrels can ultimately find a home.

The prospect of conflict in Iran could tighten supplies further. Iran counts for about 3% of global oil supply, producing roughly 3.3 million barrels per day.

Authored by Steve Watson via Modernity.news,

New revelations from the Stop The Harm Database expose a grim reality: between 2019 and 2023, thousands of American children were subjected to life-altering surgeries, hormone treatments, and puberty blockers in the name of transgender ideology.

According to the data compiled by medical watchdog group Do No Harm, 5,747 minors underwent surgical procedures often described as mutilation, including mastectomies and other invasive operations.

Another 8,579 children received hormones and puberty blockers, chemicals that disrupt natural development and carry severe long-term risks like infertility and bone density loss.

🔥🚨 BREAKING: New data reveals the staggering number of MINORS who underwent “Gender Transition” surgery or “care” under Joe Biden’s administration.

– 5,747 Childern underwent Surgical Mutilation
– 8,579 Childern recieved Hormones and Puberty Blockers
– 13,994 Minors underwent… pic.twitter.com/OXSL80R136

— The Patriot Oasis™ (@ThePatriotOasis) February 24, 2026

In total, 13,994 minors endured some form of sex change treatment, while a shocking 62,682 prescriptions for these interventions were written for kids.

These numbers highlight the peak of the transgender push under the Biden administration, where progressive policies enabled hospitals and clinics to profit handsomely—raking in nearly $120 million from these procedures on vulnerable youth.

The database, drawing from insurance claims across the U.S., shows the majority of these cases occurred in liberal strongholds like California, Oregon, and Washington, where resistance to safeguards was fiercest.

This comes amid growing backlash against the transgender agenda targeting children.

As we previously detailed, a psychologist and surgeon faced a successful lawsuit for approving and performing a double mastectomy on a 16-year-old girl who later detransitioned. The case underscores how rushed approvals without proper safeguards have left countless lives in ruins.

More recently, a plastic surgeon publicly apologized for remaining silent while training at NYU Langone Health, where gender-affirming surgeries on minors were routine. He credited President Trump’s clear stance against such practices for shifting the tide.

These developments signal a reckoning for a medical establishment that prioritized ideology over evidence. With Trump’s administration threatening to withhold federal funds from facilities performing these operations, the era of unchecked experimentation on children appears to be crumbling.

Parents, coerced by threats of suicide risks amplified by activists, handed over their kids to a system driven by financial incentives and political pressure. Now, as detransitioners speak out and lawsuits mount, accountability must follow. No more hiding behind “affirming care”.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Update (2320ET): While predicted to be ‘2 or 3 hours,’ President Trump’s State of the Union was just 109 minutes – though it was still the longest on record since at least 1964. Trump emphasized border security, energy production, and tax policies while throwing Democrats under the bus over the economy and unchecked illegal immigration.

Trump declared the “Golden Age of America” and stated that the state of the union is “strong,” tying themes to the nation’s upcoming 250th anniversary.

Key Economic Highlights

Trump highlighted a robust economic recovery, claiming:

Core inflation has dropped to 1.7% in recent months, the lowest in over five years. (based on the average of annualized rates of monthly CPI growth)
Mortgage rates are at four-year lows, reducing typical new mortgage costs by nearly $5,000 annually.
Record stock market highs since his election, with “everybody’s portfolios gaining”.
More Americans employed than ever, with 100% of new jobs in the private sector and 2.4 million off food stamps.
$18 trillion in global investment commitments in his first year, compared to under $1 trillion under Biden.
Ended DEI initiatives and cut regulations to boost growth.

Trump: ‘MORE EMPLOYED THAN AT ANY TIME IN HISTORY

THINK ABOUT THAT

100% JOBS I CREATED IN PRIVATE SECTOR’ pic.twitter.com/bF1TFwf3Mf

— RT (@RT_com) February 25, 2026

Trump also announced a deal with major AI and tech companies to cover their own data center electricity costs and pushed for banning Wall Street firms from mass-buying single-family homes, calling for it to become permanent law. Trump also touted the largest tax cuts in history, with no taxes on tips, overtime, or Social Security benefits, noting all Democrats voted against them.

Immigration and Security

Zero illegal border crossings in the past nine months, with fentanyl inflows down 56%.
Murder rate at its lowest in 125 years.

Murder rate with its largest decline in 125 years… thank you @realDonaldTrump. Leadership saving lives 🇺🇸 pic.twitter.com/eg6i7H9BiU

— FBI Director Kash Patel (@FBIDirectorKash) February 25, 2026
Demanded restoration of DHS funding, accusing Democrats of defunding it and enabling threats.
Blamed “pro-crime politicians” for releasing repeat offenders and criticized fraud in programs like those in Minnesota involving Somali communities.

🚨🇺🇸 Trump:

“We will always allow people to come in legally, people that will love our country and will work hard to maintain our country.”

Pro-legal immigration. Anti-chaos.

That’s the distinction. https://t.co/9GP0DnuNZD pic.twitter.com/FEt5xhR6mz

— Mario Nawfal (@MarioNawfal) February 25, 2026

Energy and Foreign Policy

Oil and natural gas production at all-time highs, fulfilling “drill baby drill” promises.
Gasoline below $2 in some states.
Tariffs will persist despite a recent Supreme Court ruling striking down some, potentially replacing income taxes long-term.

PRESIDENT TRUMP: “And as time goes by, I believe the tariffs paid for by foreign countries will, like in the past, substantially replace the modern-day system of income tax, taking a great financial burden off the people that I love.” pic.twitter.com/VkN5ExaU2v

— Fox News (@FoxNews) February 25, 2026
Touched on Iran tensions, stating they want a deal but refuse to denounce nuclear weapons.

President Trump’s remarks on Iran and the Islamic Republic during his State of the Union address were relatively limited and mirrored what he has said before.

But at one point, his remarks on the regime did lead Senator Elizabeth Warren to stand and clap. pic.twitter.com/YZ2PrFw4Gc

— Yashar Ali 🐘 (@yashar) February 25, 2026
Noted 80 million barrels of Venezuelan oil received and efforts against drug cartels in Mexico.
Lowered prescription drug costs through executive action.

American natural gas production is at an all time high, because President Trump kept his promise to DRILL, BABY, DRILL! pic.twitter.com/EctNOWaIK0

— U.S. Department of Energy (@ENERGY) February 25, 2026

Other Notable Moments

Trump also honored WWII veteran Buddy Taggart on his 100th birthday, and awarded the Presidential Medal of Freedom to U.S. Olympic hockey goalie Connor Hellebuyck and welcomed the men’s gold medal team. He also called for a Congressional ban on insider trading.

World War II veteran George Taggart turns 100 years old on July 4.

The Spirit of 1776 runs through his veins.

Thank you, Buddy! pic.twitter.com/COoRQGRIH9

— Congressman Addison McDowell (@RepMcDowell) February 25, 2026

And as noted below, he also got into a shouting match with Rep. Ilhan Omar (D-MN) over illegal immigration. 

NOW – Ilhan Omar and Rashida Tlaib scream, shout and point their fingers at Trump during his speech. pic.twitter.com/upJM0wNazy

— Disclose.tv (@disclosetv) February 25, 2026

All in all not terrible, but not terribly exciting. 

*  *  *

Update 2220ET: After a fairly boring hour of standard SOTU festivities, President Trump brought up voter ID, sanctuary cities, and Somali fraud, eliciting boos from Democrats a shouting match with Rep. Ilhan Omar (D-MN).

PRESIDENT TRUMP: “The Somali pirates who ransacked Minnesota remind us that there are large parts of the world where corruption and lawlessness are the norm, not the exception. Importing these cultures through unrestricted immigration and open borders brings us problems right… pic.twitter.com/TqE9qcjwqz

— Greg Price (@greg_price11) February 25, 2026

Trump then told Democrats they should ‘end deadly sanctuary cities that protect criminals, and enact serious penalties for public officials who block the removal of criminals aliens – in many cases drug lords, murderers all over our country – they’re blocking the removal of those people out of our country, and you should be ashamed of yourselves.

During which Omar shouted “You have killed Americans!” 

NOW – Ilhan Omar and Rashida Tlaib scream, shout and point their fingers at Trump during his speech. pic.twitter.com/upJM0wNazy

— Disclose.tv (@disclosetv) February 25, 2026

They’re not happy campers:

🚨 HOLY CRAP! Congressional Democrats just CONFIRMED in front of MILLIONS they want to protect illegals over citizens

TRUMP: “Stand if you agree: The first duty of the American government is to protect American citizens, not illegal aliens.”

DEMOCRATS: *Stay seated*

TRAITORS. pic.twitter.com/JvE0U9HTBT

— Eric Daugherty (@EricLDaugh) February 25, 2026

*  *  *

In what some have reported could be the longest presidential address in history, President Trump is set to deliver his first State of the Union address of his second term tonight, when he is expected to highlight his administration’s accomplishments and seize the moment to shore up support for Republicans ahead of the critical 2026 elections.

At last count, there were 72 Democrats who had decided to boycott the President’s address.

Historically, the president’s party almost always suffers midterm losses, and the House appears especially vulnerable this year.

Trump, eager to reverse the trend, is set to deliver a lengthy speech promoting the policy wins over the past year (reportedly over two hours).

“It’s going to be a long speech, because we have so much to talk about,” the president said during an event at the White House on Feb. 23.

In fact, as Polymarket odds show, his speech is expected to last 95 minutes…

This will be Trump’s second speech to Congress since returning to office. He previously spoke to a joint session of Congress on March 4 last year.

While it was not an official State of the Union address, the speech was the longest on record, lasting nearly 1 hour and 40 minutes.

Watch Live (due to start at 9pmET):

*  *  *

President Trump is reportedly planning to outline an unconventional idea for personal and corporate tax cuts that he could implement without Congress.

Bloomberg reports that media figures, including Fox News’ Bret Baier and MSNOW’s Stephanie Ruhle, outlined the details of the closed-door discussion in broadcast appearances, but said they did not have additional details about how the president’s proposal would work. The US Constitution grants Congress sole authority to levy taxes.

Trump has previously floated rebate checks for Americans that would be funded by tariff revenue, but administration officials had said that would require congressional action. Further complicating the proposal, the Supreme Court’s decision striking down his global tariffs could open the door to refunding billions of dollars collected from the duties.

The president is expected to highlight lower gasoline prices and other metrics showing economic gains — as well as the expanded tax cuts he signed into law last year and his Trump Accounts investment program for children. He’ll also point to beneficiaries of his TrumpRx website that allows Americans to directly buy some medicines at a discount, White House Press Secretary Karoline Leavitt told Fox News on Tuesday.

“The president is, of course, going to tout his administration’s record-setting accomplishments over the past year while laying out an ambitious agenda to continue making the American dream more attainable and affordable for working-class people across the country,” Leavitt said on Fox News early Tuesday.

He’ll also be “making a few new policy announcements as well to continue tackling the affordability crisis that Joe Biden created one year ago.”

Trump could emphasize plans his administration has teased to lower housing costs by barring institutional investors from snapping up single-family homes, and reduce upward pressure on electricity prices by asking technology companies to foot the bill for energy-hungry data centers.

Trump also could unveil plans to create retirement savings plans for adults that don’t already have employer-sponsored 401(k)s, Semafor reported.

Trump on Friday delivered a scathing dressing down of the justices who ruled against his tariff strategy.

A repeat of those criticisms could play out with the Supreme Court justices present. They historically attend the speech and sit feet away from the rostrum where the president delivers his speech.

That’s happened before.

Former President Barack Obama used his 2010 State of the Union speech to criticize the high court’s days-old decision striking down regulations limiting political spending by unions and corporations. But while Obama criticized the ruling — saying it would “open the floodgates for special interests” — he steered clear of personal attacks on the justices themselves, including the six sitting before him that night.

Chief Justice John Roberts later called the episode “very troubling,” and lamented that the annual addresses had “degenerated into a political pep rally,” with members of the president’s party cheering raucously even as stoic justices sit expressionless, upholding a tradition of protocol and decorum.

Separately, the anchors indicated that Trump was likely to address Iran during the speech.

They said the president expressed optimism over the prospect of continued talks – as well as frustration that Tehran has apparently been unwilling to unequivocally rule out building nuclear weapons.

The speech will also mark the 250th anniversary of the signing of the Declaration of Independence.

The address “will celebrate 250 glorious years of our nation’s independence and excellence, highlighting incredible stories of American heroes,” Leavitt said in a statement.

In case you cared, newly elected Virginia Governor Abigail Spanberger is slated to deliver the Democratic response to Trump’s speech.

Senator Alex Padilla, a California Democrat, who was handcuffed at a news conference with Homeland Security Secretary Kristi Noem, will provide a Spanish-language rebuttal.

Below, The Epoch Times’ Emel Akan lays out five key things to watch at this year’s State of the Union:

Midterms Messaging

With eight months until the midterms, Republicans are working to win voters, especially independents who backed Trump in 2024. The majority of voters are still anxious about the high cost of living, according to recent polls. Trump is likely to prioritize the economy in his speech and talk about what he has done to lower gas, housing, and health care costs for American families.

Luke Nichter, professor of presidential studies at Chapman University in Orange, California, believes that Trump’s primary message will be about the midterms.

“He wants to make sure those enthusiastic supporters are still enthusiastic, they still support him, and continue to turn out this fall,” Nichter told The Epoch Times.

The speech comes on the heels of the Supreme Court’s decision last week that struck down tariffs imposed under the 1977 International Emergency Economic Powers Act.

President Donald Trump acknowledges the audience before delivering his State of the Union address at the U.S. Capitol in Washington, on Feb. 4, 2020. Mandel Ngan/AFP via Getty Images

Trump sharply criticized the justices who supported the ruling and has since pledged to raise global tariffs to 15 percent using other statutory authorities. During a Feb. 20 press conference, Trump said he was “ashamed of certain members of the court.” Hence, his tone and remarks toward the justices in the room will be closely watched during the address.

Trump is expected to make the case for high tariffs, even as some Republican lawmakers have expressed concerns about their economic impact.

Immigration will also be a key topic, as the Department of Homeland Security (DHS) remains shut down due to ongoing disagreement between the White House and congressional Democrats. Trump is expected to defend his administration’s policies while adopting a more measured tone in light of two recent fatal shootings by immigration agents in Minneapolis.

Aaron Dusso, a political science professor at Indiana University, believes that Trump will try to shift the narrative during his speech, especially given recent criticism of the domestic immigration crackdown and declining approval ratings.

“This is going to be an opportunity for him to command attention across the entire country,” Dusso told The Epoch Times.

Foreign Policy Questions

Foreign policy is typically not a major focus in the State of the Union addresses, as presidents usually prioritize domestic issues. Trump’s address may be an exception, Nichter said.

In recent weeks, the administration has stepped up the U.S. military presence in the Middle East to exert pressure on Iran to curb its nuclear program. The Pentagon has dispatched another large aircraft carrier to the region. Amid tensions, another round of talks with Tehran is set for Feb. 26 in Geneva. Lawmakers will be closely watching for any new announcements regarding Iran.

Mexican soldiers patrol in armored vehicles in Acapulco in the aftermath of a military operation in which Mexican drug lord Nemesio Oseguera, known as “El Mencho,” was killed in Jalisco state, in Acapulco, Mexico, on Feb. 22, 2026. Henry Romero/Reuters

In Mexico, a U.S.-aided operation killed Nemesio “El Mencho” Oseguera Cervantes, a powerful drug cartel leader, on Feb. 22. Lawmakers and foreign policy analysts will be listening for clarity on the extent of the U.S. involvement in the Mexican military’s operation.

Trump is also expected to highlight his broader efforts to broker peace around the world, crediting himself for ending eight wars.

According to Nichter, Trump may also address unresolved foreign policy issues, including Greenland, Cuba, Venezuela, and the golden dome missile defense system.

Guests in the Gallery

The White House and lawmakers will invite special guests to the State of the Union to highlight their political messages.

Over the weekend, Trump invited the U.S. Men’s and Women’s Olympic Hockey teams following their gold medal victories over Canada.

The women’s team declined the invitation, citing scheduling issues. The men’s team is expected to attend.

Jake Guentzel #59, Tage Thompson #72, Jaccob Slavin #74, Kyle Connor #81 and Jake Sanderson #85 of Team United States listen to the national anthem during the medal ceremony for Men’s Ice Hockey following their gold-medal win over Canada at the 2026 Winter Olympic games at Milano Santagiulia Ice Hockey Arena in Milan, Italy, on Feb. 22, 2026. Bruce Bennett/Getty Images

Democratic lawmakers have invited several people who say they were victims of sex offender Jeffrey Epstein, including Jess Michaels and the family of the late Virginia Roberts Giuffre, to demand legal consequences for those named in the files.

Some Democrats, including Senate Minority Leader Chuck Schumer (D-N.Y.), will bring constituents to raise concerns about the impact of rising tariffs and health care costs.

Some Republicans are focusing on human rights issues in China. House Speaker Mike Johnson (R-La.) will host the daughter of Gulshan Abbas, a Uyghur doctor detained in China since 2018. Rep. Chris Smith (R-N.J.) will host Claire Lai, daughter of Hong Kong media tycoon Jimmy Lai, who is serving a 20-year prison sentence.

Reaction

There have been dramatic moments at past State of the Union addresses, most notably in February 2020, when then-House Speaker Nancy Pelosi tore up a copy of Trump’s speech after he finished speaking.

This time, the setting will be different. Seated behind Trump will be Johnson and Vice President JD Vance.

Reactions from Democrats in the chamber will be closely watched. As with previous years, some lawmakers are expected to stage symbolic protests, wearing coordinated colors or displaying signs.

Vice President Mike Pence claps as Speaker of the House of Representatives Nancy Pelosi rips a copy of President Donald Trump’s speech after he delivers the State of the Union address at the Capitol in Washington on Feb. 4, 2020. Mandel Ngan/AFP via Getty Images

The official response from the Democratic Party will be delivered by Virginia Gov. Abigail Spanberger, who won a landslide victory last November and became the state’s first female governor. Her response will air immediately after Trump’s speech.

Yemisi Egbewole, a Democratic strategist and former Biden White House adviser, said that Spanberger’s selection shows the party is changing its strategy by focusing on affordability and moving away from identity issues.

The response is expected to be measured and aimed at voters who are uneasy about Trump as president, even if they sometimes support Republicans, Egbewole told The Epoch Times.

“That is really where Democrats need to hit,” she said.

Virginia Gov. Abigail Spanberger signs executive orders after being sworn into office at the Virginia State Capitol in Richmond, Va., on Jan. 17, 2026. Win McNamee/Getty Images

More than a dozen Democrats plan to skip the speech and attend an alternative event, the “People’s State of the Union” rally at the National Mall in Washington.

Sens. Adam Schiff (D-Calif.), Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), Chris Murphy (D-Conn.), Tina Smith (D-Minn.), and Chris Van Hollen (D-Md.), as well as Reps. Yassamin Ansari (D-Ariz.), Becca Balint (D-Vt.), Greg Casar (D-Texas), Veronica Escobar (D-Texas), Pramila Jayapal (D-Wash.), Delia Ramirez (D-Ill.), and Bonnie Watson Coleman (D-N.J.) are expected to skip the address.

Defending the Record

Trump is expected to defend his record and outline his legislative goals in another lengthy address.

He will tout economic milestones, including the Dow Jones Industrial Average surpassing 50,000 points. He will argue that crime is falling nationwide.

He will also likely highlight reductions in immigration flows at the southern border with Mexico. Trump has previously said that illegal immigration along that border has reached near-zero levels.

A banner showing President Donald Trump at the Department of Justice in Washington on Feb. 21, 2026. Madalina Kilroy/The Epoch Times

The address is also considered a prime opportunity for the president to lay out his legislative proposals. This year, Trump is expected to encourage the passage of the Safeguarding American Voter Eligibility (SAVE) America Act, a bill that would require proof of citizenship to vote.

He will also tout his other policies, such as banning male athletes with gender dysphoria from competing in women’s sports.

According to David Schultz, a political science professor at Hamline University in Minnesota, Trump will have to keep his base energized while deciding whether to adjust his tone and message to win back the independent voters who helped elect him in 2024.

Republicans’ chances of holding Congress depend on retaining those swing voters, he told The Epoch Times.

“His base is still mostly with him,” Schultz said. “The question becomes, does he only pitch to the base, or does he try to alter his language and approach to appeal to the swing voters?”

David Tepper, the billionaire behind Appaloosa Management, blasted Whirlpool’s board in a sharply critical letter, accusing the appliance maker of eroding shareholder value and demanding a strategic reset, according to CNBC, who viewed the letter.

Tepper said he watched with “a certain astonishment” as Whirlpool moved ahead with what he described as a sizable and avoidable equity issuance that diluted investors. He argued the capital raise carried a cost of more than 10% — far above the company’s tax-adjusted borrowing costs of under 5% in public markets — despite management’s stated aim of cutting leverage.

“Over the years this management team has destroyed hundreds of millions of dollars of shareholder value. Enough is enough. There can be no more excuses,” Tepper wrote in the letter, first reported by CNBC’s Andrew Ross Sorkin.

The share sale triggered a sharp market reaction. Whirlpool stock fell 14% Tuesday after announcing plans to raise about $454.9 million through a common stock offering and $508.1 million via depositary shares.

The company also placed 435,000 shares with Guangdong Whirlpool Electrical Appliances at a discounted $69 apiece in a private deal. Whirlpool was Appaloosa’s eighth-largest position at the end of the fourth quarter, valued at $282 million, according to Verity data.

CNBC noted that shares later rebounded nearly 1%, though they remain down roughly 36% from a 52-week high reached in July.

Tepper also criticized Whirlpool for not fully leveraging tariffs imposed during the Trump administration, suggesting it consider alliances or mergers with foreign competitors disadvantaged by trade policy to improve its footing.

“We encourage the Board to (i) remember their fiduciary responsibilities and not accept management acting purely in its own self-interest, and (ii) invite domestic entities or foreign corporations who want to create American jobs and increase shareholder value to take an interest in Whirlpool,” the letter said.

Tepper, who founded Appaloosa in 1993, is known for aggressive, event-driven investing and outspoken activism.

He previously ran a successful distressed-debt strategy, bought the NFL’s Carolina Panthers in 2018, and has built a reputation as one of Wall Street’s most influential hedge fund managers.

Authored by Eva Sun-Wai via BondVigilantes.com,

The dollar’s slide last year looks less like a sudden break and more like the culmination of pressures that have been gathering for a while. The fading of US exceptionalism has sat quietly in the background, and once the narrative started to normalise, the cracks became clearer: softer growth expectations, slower capital inflows, and valuations that had been leaning heavily on the idea that the US could keep outperforming indefinitely. The currency came into the year heavily owned and reliant on that growth premium, and when it began to erode, the dollar suddenly felt far more exposed to shifts in sentiment and positioning than it had for some time.

At the same time, the policy backdrop has turned more awkward for the currency. Markets expect the Fed to continue cutting, and the prospect of a more politically influenced leadership has introduced a small but noticeable risk premium around credibility. That is happening just as fiscal policy remains unanchored, with deficits showing little sign of narrowing and spending likely to rise into the election cycle. The steepening we’ve seen in the curve has not offered the dollar much support. Even when nominal yields tick higher, the lack of a credible fiscal path blunts the rate‑differential argument the currency would otherwise be able to lean on.

Trade policy hasn’t helped clarify matters either. Ordinarily, higher tariffs would tighten the inflation narrative and lend support to the dollar, but the market seems to be treating recent announcements with a degree of caution. The reversals, the unpredictability, and the simple fact that these things take time to feed through the system have meant the FX impact has been surprisingly muted. Rather than helping the dollar, tariff headlines have added to the broader sense of uncertainty.

Source: M&G, Bloomberg intelligence.

All of this has fed into the gentler tone around inflation expectations. Long‑dated breakevens suggest a market that is comfortable (perhaps too much so) with the idea that inflation pressures will remain contained. For the dollar, that matters: when inflation is assumed to stay under control, rate differentials compress, and one of the currency’s key supports weakens. A shift in those expectations, whether driven by tariffs or other factors, could prompt a repricing. The more challenging scenario would be one where inflation starts to firm again, yet the Fed continues to ease. That combination would weigh heavily on real yields and raise questions about policy direction and central‑bank independence at a moment when confidence is already fragile.

Against this backdrop it’s no surprise that traditional valuation anchors feel less dependable. Too many competing forces such as policy, flows, and politics, are pulling at once. If the Fed keeps cutting and differentials narrow, a softer dollar is the natural outcome unless other central banks ease more aggressively and/or for longer than expected. And while this doesn’t yet resemble a structural rotation away from the dollar, the combination of drivers could support a gradual diversification at the margins. Reserve managers are still operating within clear limits with USD markets remaining the core of the system, but increased accumulation of alternatives, particularly gold, fits with the broader theme.

Taken together, this episode looks both political and structural. Politics has accelerated the move, but the foundations were already in place: the normalisation of US exceptionalism, the awkward policy mix, and the evolving inflation and reserve‑management dynamics. How long those forces persist will shape the dollar’s path into the next decade.

It doesn’t yet feel like a dramatic turning point, but nor does it look like an interruption that will snap back quickly.

The more plausible path is a slower, uneven adjustment as the market works out what the right premium for the US actually is.

Via Remix News,

Opponents of Brussels’ deal with Latin American countries to import agricultural products are being proven right, unfortunately. Meat containing a banned growth hormone has shown up in the EU, a Dutch authority has reported, leading Polish authorities to order urgent inspections by the relevant inspectorates.

EU farmers and multiple groups warned that the lack of safety regulations in use across the Mercosur countries would lead to such outcomes.

The Dutch Food and Consumer Product Safety Authority announced that it had detected Brazilian beef contaminated with estradiol, a growth hormone used to stimulate estrus in cattle that is banned in the European Union, writes Do Rzezcy.

Four contaminated shipments, containing a total of 62,781 kilograms of meat, were imported by two European companies.

A significant portion of the meat was distributed to several buyers and introduced into the EU market.

Two remaining shipments of beef from Brazil (each containing approximately 25 tons of frozen meat) were blocked by Dutch authorities from being released for distribution, the Farmer.pl website reported on Monday.

The website stressed that the detection of contaminated beef imports could become another argument for opponents of the EU trade agreement with Mercosur, a bloc of South American countries.

According to the RMF FM radio station, EU member states, including Poland, were informed by the European Commission about the distribution of contaminated meat from Brazil as early as November 11 of last year. The European Commission detected the irregularities during an audit at the end of October 2025. By Jan. 21, contaminated beef had been detected in approximately 10 countries, including the Czech Republic, Germany, and Italy.

And yet, that same day, on Jan. 21, despite the European Parliament voting to have the ECJ review the legality of the Mercosur deal, leaders in Brussels were urging for the deal to be formalized, including the German president of the European Commission, Ursula von der Leyen, and German Chancellor Friedrich Merz as well.

“We are convinced of the agreement’s legality. No more delays. The agreement must now be applied provisionally,” Merz posted on X at the time.

The Polish Ministry of Agriculture and Rural Development has ordered inspections of beef imported from Brazil.

“Due to reports of estradiol (a growth hormone) being detected in batches of Brazilian beef imported to the EU, we have ordered urgent inspections by the relevant authorities. We are monitoring the inflow of products into Poland and verifying all signals.”

“At this time, there is no information that the indicated batches have reached the Polish market. We are taking preventive measures to ensure full food safety,” Deputy Minister Małgorzata Gromadzka announced on X.

Read more here…

US equity futures are higher into NVDA earnings release after the close, and the risk-on tone in the US yesterday has spread globally with tech giant’s earnings a catalyst for maintaining the rally aided by Tech. As of 8:00am ET, S&P 500 futures were up 0.3% as with Nasdaq 100 contracts +0.4%; NVDA is up 0.6% in premarket trading and while blowout results from the company later today may soothe nerves about the AI trade, “even if they have tremendous numbers, we know the markets are really fickle,” said Mahoney Asset Management’s Ken Mahoney. Other Mag7s are also higher ex-AAPL and TSLA with Cyclicals bid, led by Fins/Industrials/Materials while Defensives mostly lower pre-mkt, ex-Healthcare, reflecting the risk-on tone. JPM says to keep an eye on Software if TMT gains positive momentum. European stocks rose 0.5%, hitting a record on a rebound in banks and miners. South Korea pushed past France in stock-market value.Bond yields are +1-3bp, the dollar slipped after President Donald Trump doubled down on his commitment to tariffs, before erasing the move, and commodities are bid led by Metals with precious outperforming base especially silver and platinum. Bitcoin rallied more than 2%. Gold and silver climbed. Today’s macro data releases are light (only Mortgage Applicatgions which rose 0.4%) ahead of tomorrow’s  jobless claims and Friday’s PPI, but with multiple Fedspeakers. Yesterday we saw better weekly ADP data, weaker regional Fed data, and improving consumer sentiment.

In premarket trading, Magnificent Seven stocks are mostly higher, with Nvidia +0.8% ahead of its report (Alphabet +0.5%, Amazon +0.5%, Microsoft +0.3%, Meta Platforms +0.3%, Tesla +0.4%, Apple -0.2%). 

Lithium stocks are rising after Zimbabwe suspended exports of lithium concentrates and raw minerals.
AbCellera Biologics (ABCL) rises 8% after the drug developer reported total revenue for the fourth quarter that was ahead of the average analyst estimate. The firm also posted loss per share for the quarter that was narrower than Wall Street’s expectations.
Aspen Aerogels (ASPN) falls 21% after the maker of thermal insulation used in electric vehicles reported loss per share for the fourth quarter that’s wider than expected. The company has initiated a strategic review.
Axon (AXON) rises 15% after the Taser maker reported adjusted earnings per share for the fourth quarter that beat the average analyst estimate.
Camping World (CWH) slides 12% after the retailer of recreational vehicles reported a larger-than-expected adjusted Ebitda loss for the fourth quarter.
Cava Group (CAVA) climbs 11% after the fast-casual chain’s restaurant comp sales forecast for 2026 came in above the average estimate from analysts.
Circle Internet Group Inc. (CRCL) rises 16% as profit and revenue increased more than estimated while the amount of its USDC stablecoin in circulation jumped 72% to $75.3 billion in the fourth quarter.
First Solar (FSLR) slides 16% after the maker of electricity-producing solar modules reported a 2026 net sales forecast which missed the average analyst estimate.
HP Inc. (HPQ) falls 5% after providing a profit outlook for the current quarter that may fall short of estimates and said full-year earnings will likely hit the lower end of a previously forecast range as the company copes with tariffs and the rising price of memory chips.
Lowe’s Cos. (LOW) slips 3% after forecasting sales guidance for the full year that fell short of expectations, a sign the housing market will remain lackluster in the near term due to high borrowing costs and economic volatility.
Lucid (LCID) declines 2% after the electric-vehicle maker reported adjusted loss per share for the fourth quarter that missed the average analyst estimate.
MercadoLibre (MELI) falls 5% after the online marketplace for Latin America reported its fourth-quarter results. While analysts are broadly positive on growth trends, they noted that elevated spending will pressure the company’s margins.
Oddity Tech (ODD) slumps 34% after the direct-to-consumer beauty and wellness company said it expects its revenue for the first quarter of 2026 to decline 30% year-over-year.
Workday (WDAY) declines 9% after giving a subscription revenue guidance that missed expectations, adding to investor concerns that a rise of AI automation tools is disrupting traditional software vendors.

In other corporate news, DoorDash is pulling out of four countries in Asia, a sign that fierce competition and thin margins are weighing on its overseas ambitions. Anthropic has loosened its central safety policy, coinciding with a growing dispute with the Defense Department. AMC plans to close more theaters in underperforming locations.

Expectations are high for Nvidia as customers have announced huge capex plans, but a positive stock reaction is key for the Nasdaq after recent underperformance, said Arnaud Girod, head of cross-asset strategy at Kepler Cheuvreux. “We’re in the thick of uncertainty about the disruption of AI with the market de-rating entire segments of the stock market.”

To reinvigorate its stock performance, Nvidia will at least need to beat its prior outlook and set new targets above current Wall Street estimates. While the company has done this repeatedly, concerns have grown that the AI spending wave isn’t sustainable. “Nvidia’s results are expected to be good given the massive capex announced by its clients, but it’s all about how the market will react,” said Arnaud Girod, head of cross-asset strategy at Kepler Cheuvreux. “The Nasdaq needs Nvidia if it is to limit its current underperformance.”

Another key earnings event on Wednesday is Salesforce, the cloud-based customer-relationship firm whose stock has plunged 30% this year after getting caught up in the selloff of software companies on fears that AI could render their services obsolete. Analysts, on average, project that the company will post its best quarterly revenue growth rate in three years. Still, highlighting the risks for software-as-a-service firms, Workday Inc. slid nearly 10% in early trading after subscription sales fell short of estimates.

Turning to Trump’s State of the Union address, the President talked up the economy saying that the nation is back, bigger, better and stronger than before, while he added that we’ve seen nothing yet and this is the golden age of America.

Trump said they have achieved a transformation like never before and a turnaround for the ages, as well as stated that low interest rates will solve the housing problem, and they want to protect home values and keep them up.
He also commented that inflation is plummeting, salaries are rising, and the roaring economy is roaring like never before.
Regarding tariffs, Trump said the Supreme Court decision on tariffs is very unfortunate, but added that tariffs will remain in place and nearly all countries want to keep the trade deals, while he also stated that congressional action won’t be needed on tariffs.
Trump also commented on Iran, which he claimed is working on missiles that could soon reach the US, and noted Iran wants to make a deal but hasn’t yet said that it won’t pursue nuclear weapons, while he reiterated that his preference is to resolve Iran’s nuclear issue through diplomacy.

Out of the 450 S&P 500 companies that have reported so far in the earnings season, 74% have managed to beat analyst forecasts, while 21% have missed. TJX, Bank of Montreal and Lowe’s are among companies expected to report results before the market opens. Wall Street expects TJX’s fourth-quarter results to have received a boost from a strong holiday shopping season, with comparable sales estimate of +3.7% (Bloomberg Consensus). Earnings from Nvidia and Salesforce follow later with Wall Street eager to hear what it has to say about potential disruption to software makers from AI upstarts like Anthropic.

Rates on Japan’s longer-term bonds climbed further after Prime Minister Sanae Takaichi’s government nominated two new Bank of Japan policy board members who are seen as dovish. The yen fell 0.5%, the worst performance among major currencies.

European stocks are higher across the board with the FTSE 100 outpacing peers as post-earnings gains in HSBC send the index to a record high. Mining and banking shares are leading gains. Meanwhile, food and beverage as well as personal care stocks are the biggest laggards. Here are the biggest movers Wednesday:

HSBC shares advanced as much as 6.1% in London to a fresh high after the lender reported strong earnings ahead of estimates and offered new guidance figures that analysts say are above expectations
Relx shares rise as much as 5.3% after the professional publisher says it’s integrating an Anthropic automation tool into its legal research platform
Anglo American rallied as much as 4.4% in London after DZ Bank upgraded the miner to buy from hold, saying that the merger with Teck Resources to become one of the world’s biggest copper producers is going as planned
Lion Finance Group shares climb as much as 9.8% to the highest level on record, after the Georgian lender reported strong fourth-quarter results
Temenos shares rise as much as 8.6%, the most since October, after the software firm raised its mid-term targets for annual recurring revenue, free cash flow and Ebit, while issuing fiscal 2026 guidance that met expectations
St James’s Place shares climb as much as 7.3%, the most since July, after the British wealth manager reported underlying cash profit for the full year that beat the average analyst estimate
Diageo shares fall as much as 7.1% after the maker of Guinness stout and Johnnie Walker whiskey cut its sales guidance due to further weakness in the key US market, and reduced its dividend
Haleon shares drop as much as 5.6% after the consumer healthcare firm delivered weaker-than-expected organic growth in the final quarter of 2025 and issued guidance that was below its mid-term ambition
Iberdrola shares slip as much as 1.5%, ceding earlier gains, after the Spanish power company’s fourth-quarter net income missed estimates, overshadowing a 12% rise in full-year 2025 results

Earlier in the session, Asian stocks rise for a third straight day, led by tech stocks, as investors pared concerns over potential disruption from artificial intelligence. The MSCI Asia Pacific Index gained 1.1% at the close to remain near record highs, with  chipmakers TSMC and Samsung continuing to drive advances. Benchmarks in Japan and Taiwan rose more than 2%, while Australian and Korean shares also gained over 1%. Asia’s equity markets have avoided some of the volatility sweeping Wall Street in recent weeks, as investors remain confident about the region’s role in supplying essential AI components to the US. On Wednesday, the region’s tech firms were further supported by comments from Anthropic PBC that it plans to build partnerships with existing businesses. 

“Today’s firmer Asia open, following the US rebound, looks like a reset from oversold levels,” said Ritesh Ganeriwal, head of investment at Syfe Pte in Singapore. “The bounce in US tech is providing near-term relief to sentiment.” “That said, we would characterize this as tactical stabilization rather than a full reset of positioning. Markets are still digesting valuation, earnings visibility, and AI monetization assumptions.”

In FX, the Bloomberg Dollar Spot index is now up a touch as yen weakness helped the greenback shrug off initial downside. The yen was sold and the JGB curve steepened after Japanese PM Takaichi nominated two dovish reflationist academics to join the BOJ board.

In rates, treasuries are slightly cheaper in early US trading as stock futures advance and investors set up for 5-year note auction at 1pm New York time.US yields are 1bp-3bp higher and curve spreads are within 1bp of Tuesday’s close. 10-year near 4.05% is 2bp cheaper, lagging German counterpart by around 1bp.$70 billion 5-year note auction follows solid results for Tuesday’s 2-year; WI 5-year yield near 3.618% is ~20.5bp richer than last month’s auction, which tailed by 0.3bp. Elsewhere in the rates space, US yields are up 1-2bps across the curve with modest upside also seen in German and UK borrowing costs.

While Treasuries showcased their haven status during Monday’s tech selloff, longer-term pressures including uncertainty over inflation, tariffs and fiscal questions remain, according to Laura Cooper, head of macro credit at Nuveen. “We are unlikely to see the resumption of rate cuts until we see greater signs of disinflationary pressures coming through, which to our mind is more of a second-half-of-2026 story,” Cooper told Bloomberg TV. “All of the factors suggest we are in a higher-for-longer yield backdrop.”

In commodities, WTI crude is up 0.3%, but down from highs. US President Donald Trump stated that Iran is working to reconstitute its nuclear program. Spot gold and silver are up 0.5% and 3.5% respectively. Bitcoin is up 2.1% after a recent run of losses. 

The US economic data calendar is blank, while Fed speaker slate includes Barkin (10:40am), Schmid (11am) and Musalem (1:20pm)

Market Snapshot

S&P 500 mini +0.1%
Nasdaq 100 mini +0.2%
Russell 2000 mini +0.4%
Stoxx Europe 600 +0.6%
DAX +0.4%
CAC 40 +0.4%
10-year Treasury yield +2 basis points at 4.05%
VIX little changed at 19.51
Bloomberg Dollar Index little changed at 1189.37
euro +0.1% at $1.1786
WTI crude +0.4% at $65.89/barrel

Top Overnight News

Donald Trump accused Iran of reviving its nuclear program in his State of the Union address, adding to speculation of new US strikes. BBG
Trump pledged a new retirement savings plan for workers without 401(k)s. It would be modeled after the federal Thrift Savings Plan, with a government match of up to $1,000 annually. BBG
US House Speaker Johnson said codifying some of the tariffs would be difficult and will have discussions on tariffs in coming weeks, via Fox Business Interview.
The Pentagon threatened to invoke a Cold War-era law against Anthropic unless it allows unrestricted military use of its technology by Friday, people familiar said. Anthropic said in a blog post that it’s loosening its hallmark safety pledge.
Nvidia Corp. has yet to sell any of its H200 chips to China two months after President Donald Trump’s decision to allow shipments of the artificial intelligence processors to the world’s second-largest economy. BBG
Two Federal Reserve officials on Tuesday signaled no near-term appetite to change the setting of central bank interest rate policy. Markets expect the Fed to lower rates again this year but officials, faced with a stabilizing job market and uncertainty over whether inflation pressures will moderate back to target, have not given much guidance about the prospect for more reductions in the cost of short-term borrowing. RTRS
Japan must keep raising interest rates and tighten fiscal policy as the economy is already in “great shape,” former central bank chief Haruhiko Kuroda said, warning that Premier Sanae Takaichi’s big spending plan could stoke an inflationary upswing. RTRS
Japan’s government has nominated candidates for two positions at the central bank, a move that could be viewed as a chance to influence monetary policy in a more dovish direction. WSJ
The Aussie gained as January core inflation came in stronger than expected. The Bank of Thailand unexpectedly cut rates to 1%. BBG
Consumers expecting a drop in prices after the U.S. Supreme Court struck down the White House’s emergency tariffs are likely to be disappointed, as businesses plan to use any relief to offset elevated costs and gird themselves to chase refunds. RTRS

Trade/Tariffs

China’s Commerce Ministry, on USTR Greer comments, said that China has fulfilled obligations of China-US phase one agreement.
China’s Commerce Ministry announces that the country encourages imports of services related to chip research, development and design.
Chinese Premier Li said in meeting with German Chancellor Merz that China is willing to bolster dialogue, communication and mutual trust.
German Chancellor Merz on trade with China said, they welcome any further market opening and it is in their mutual interest.
US President Trump said Supreme Court decision on tariffs is very unfortunate, but adds that tariffs will remain in place and nearly all countries want to keep the trade deals, also said congressional action won’t be needed on tariffs.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded higher as the region took impetus from the rebound on Wall Street after Anthropic’s presentation helped soothe some AI/software concerns, and with tech also bolstered by the USD 60bln Meta-AMD chip deal. ASX 200 advanced with gains led by notable outperformance in the tech, consumer staples and mining sectors, while participants continue to digest an overload of earnings and are unfazed by firmer-than-expected CPI data. Nikkei 225 rallied to a fresh record high as exporters benefitted from recent currency weakness after it was reported that Japanese PM Takaichi relayed to BoJ Governor Ueda her reservations about further rate hikes. Hang Seng and Shanghai Comp conformed to the broad upbeat risk sentiment, with attention in Hong Kong on the annual budget and with the mainland underpinned with the PBoC conducting a CNY 600bln MLF operation.

Top Asian News

China aims to boost output of relatively advanced chips to 100,000 wafers in 1-2 years, according to Nikkei; China has set target of adding an additional 500,000 wafers of capacity by 2030.
Shanghai City relaxes home buying rules for non-residents effective on Thursday and will exempt property tax for certain home buyers.
Japanese PM Takaichi said closely watching FX moves with a high sense of urgency.
Major Japanese brokerage warns that yen could test post-election low if BoJ appointments are dovish.
Hong Kong Financial Secretary Chan said in Budget Address that 2025 GDP rose 3.5% and the domestic economic trend is to continue to be good in 2026. Sees 2026 GDP at 2.5%-3.5% and average growth of 3.0% per year in real terms for 2027-2030.
Hong Kong budget is speculated to include funding for tech hub and aerospace sector incentives, according to SCMP.

European bourses (STOXX 600 +0.6%) are entirely in the green, with the FTSE MIB and FTSE 100 (+0.9%) gaining, helped by positive HSBC earnings. The SMI (+0.1%) is the slight laggard, weighed down by Alcon (-1.1%) after the Co. missed on Q4 revenue and core EPS. European sectors are broadly in the green. Banks (+1.8%) and Basic Resources (+2.2%) sit comfortably at the top of the table, while Food, Beverages and Tobacco (-0.7%) is soft as poor Diageo guidance hits the rest of the sector (Pernod Ricard -2.9%, Heineken -0.3%). HSBC shares (+5.5%) are higher today for three reasons: 1) beating market estimates for its top line metrics, 2) lifting its annual 2026-28 ROTE to 17% or greater, and 3) stating its USD 1.5bln cost-saving target will be hit ahead of schedule. This, alongside an update from Santander (+2.7%), in which they expect 2028 net income at EUR 20bln (exp. EUR 18.6bln), lifts the Banking sector.

Top European News

UK Chancellor Reeves is facing renewed called to cut bank tax as UK competitiveness lags, according to City AM.
German lawmakers are reportedly set to approve EUR 540mln order for attack drones, Bloomberg reported citing sources.

FX

DXY trade flat intraday and off worst levels within a current 97.643-97.867 range after briefly dipping under yesterday’s 97.695 low, with little reaction to US President Trump’s State of the Union Address, where he defended his leadership and described the past year as a “turnaround for the ages”; he promoted tariffs as strengthening the US economy, and said they would “substantially replace” income taxes; he offered limited details on Iran, China and Ukraine. Aside from that, newsflow this morning has been on the lighter side. Focus ahead will be on Fed speak and then NVIDIA earnings.
JPY underperforms with recent developments seeing PM Takaichi nominating academics Ayano Sato and Toichiro Asada to the BoJ policy board, replacing Asahi Noguchi and Junko Nakagawa; analysts said the picks are viewed as reflationist and dovish, and may reduce expectations of near-term rate hikes. Further, JPY weakness coincided with reports that Japan’s FTC conducted an on-site inspection of Microsoft (MSFT) on suspicion of violating the Antimonopoly Act, Nikkei reported, potentially stoking some Big Tech-related bilateral tensions. USD/JPY resides in a 155.34-156.64 range after topping Tuesday’s 156.28 high.
AUD is the G10 outperformer following firmer-than-expected monthly CPI data from Australia. The upside in consumer inflation was driven by electricity and garments & footwear offset somewhat by a larger than expected fall in holiday travel and a smaller than expected rise in health. Analysts at Westpac note “Consistent with our preliminary review we see little risk to our current inflation profile.” AUD/USD resides closer to the top end of a 0.7057-0.7117 range at the time of writing.
GBP and EUR trade with mild gains despite a flat DXY, possibly more a function of JPY weakness as GBP/JPY hovers around 211.50 and EUR/JPY meanders around 184.50. Aside from that, specifics for GBP and EUR are light, with the latter eyeing EZ final inflation metrics.

Central Banks

Former BoJ Governor Kuroda said Japan need to move toward tighter fiscal and monetary policy as the economy is already in great shape. Recent USD/JPY levels near 157 is somewhat too weak. BoJ can probably hike rates around twice a year in 2026 and 2027 to around 1.5-1.75%. PM Takaichi’s administration spending and tax-cut plans could fuel inflation and push up bond yields.
Japan nominates professors Toichiro Asada and Ayano Sato to replace outgoing BoJ board members Noguchi and Nakagawa.
Japanese Deputy Chief Cabinet Secretary said aware of report that PM Takaichi voiced apprehension to additional BoJ rate hikes, adds Takaichi did not have a specific request and there is ‘nothing more or less than that’.
RBA Governor Bullock said patience is required in assessing policy.
China may see lower rates from Q2, according to experts cited by China Securities Journal.
Thai Central Bank unexpectedly cuts its rate by 25bps to 1.00% (exp. a hold at 1.25%); 4-2 voted in favour of the cut; said downside risks to headline inflation are expected to increase relative to previous assessment.

Fixed Income

Global benchmarks are broadly lower this morning. Pressure which also comes alongside JGB selling, which are currently lower by around 50 ticks. The situation is Japan appears to be shifting from optimism surrounding political stability, after PM Takaichi’s landslide victory, to one where traders are questioning “reflationist” policy; this refers to government’s ability to boost spending whilst also allowing inflation to run higher. Fears which were sparked by reports on Tuesday, that PM Takaichi expressed her apprehension to further BoJ hikes. Moreover, overnight it was reported that the government had recommended two academics, who have been described as “staunch reflationists”, by Chief Fixed Income strategist SBI Securities.
USTs are lower by a handful of ticks and currently hold within a 113-05+ to 113-10+ range, with price action ultimately sideways for much of the morning. Pressure this morning in tandem with easing AI disruption related fears, after Anthropic announced a slew of new partnerships. Overnight, markets tuned into President Trump’s State of the Union Address, in which he largely talked up the US economy; on trade, he suggested that tariffs will remain in place and nearly all countries want to keep the trade deals. On the Iran situation, he suggested that Iran wants to make a deal, and reiterated his own preference to solve the situation through diplomacy. Overall, his comments did not spur a reaction in US paper.
Bunds initially held around the unchanged mark early doors, before slipping slightly into the red; currently off by around 10 ticks, to hold within a 129.50-129.71 range. Earlier, Final German GDP (Q4) figures were unrevised, whilst the GfK Consumer Confidence metrics deteriorated from the prior vs expectations of a slight improvement. Little move to the release of Final EZ HICP metrics.
Gilts follow peers lower, and currently lower by 10 ticks within a 92.94-92.84 range. Focus on Tuesday was on the BoE, where several MPC members appeared at the TSC hearing. Governor Bailey noted that would go into coming meetings asking if a cut is justified, adding that a rate cut at the next meeting is a genuinely open question. Market pricing was little moved following the hearing and are still yet to definitively determine if the next cut will be in March or April. Elsewhere, CityAM reported that UK Chancellor Reeves is facing renewed calls to cut the bank tax as UK competitiveness lags.

Commodities

Crude benchmarks remain underpinned, with WTI and Brent trading within the ranges of USD 65.45-66.60/bbl and USD 70.45-71.60/bbl, respectively. Ongoing geopolitical tension between the US and Iran will likely keep oil prices volatile in the near term. At the time of writing, the latest update includes US Senator Cruz suggesting that they are likely to see limited strikes on Iran in a matter of days. Meanwhile, Iranian Foreign Minister Araghchi said Tehran will resume talks with the US in Geneva tomorrow. In Russia and Ukraine, Washington warned Ukraine not to strike targets within Russia that could hit US economic interests, according to the FT.
In the precious metal space, XAU and XAG continue to surge, trading at the upper range of USD 5128.3-5310.7/oz and USD 86.22-87.10/oz, respectively. The yellow metal has been underpinned by recent dollar softness as well as continuous haven demand over geopolitical uncertainty between the US and Iran.
Copper prices are slightly firmer this morning, tracking global risk sentiment from Wall Street and APAC, which finished higher, as well as the European session, which is trading mostly positive thus far this morning. At the time of writing, 3M LME copper is trading at the upper end of a USD 13.19-13.29k range.
Russia and Iran are cutting its oil prices to China, Bloomberg reported citing traders; Russia’s Urals grade is selling USD 12/bbl below ICE Brent (prev. USD 10/bbl below), Iranian Light selling USD 11/bbl below ICE Brent (prev. USD 8-9/bbl).

Geopolitics: Ukraine

Ukraine President Zelensky’s negotiators will meet with US counterparts on Thursday and is targeting a leaders summit in March.
Washington warns Ukraine over striking US economic interests in Russia, FT reported. Kyiv’s ambassador to Washington said the Trump admin has formally warned Ukraine not to strike targets within Russia that could hit US economic interests.

Geopolitics: Middle East

US President Trump said Iran is working on missiles that could soon reach the US, and noted Iran wants to make a deal but hasn’t yet said that it won’t pursue nuclear weapons, reiterates his preference is to resolve Iran nuclear issue via diplomacy.
Iran’s Parliamentary Speaker said, with relation to US-Iran talks, all options are on the table. Ready for dignified diplomacy, also ready for defence.

US Event Calendar

7:00 am: United States Feb 20 MBA Mortgage Applications, prior 2.8%
10:40 am: United States Fed’s Barkin Speaks on Panel
11:00 am: United States Fed’s Schmid Speaks on Monetary Policy and the Economy
1:20 pm: United States Fed’s Musalem Speaks on Role of Fed

DB’s Jim Reid concludes the overnight wrap

Markets recovered their poise over the last 24 hours, with the S&P 500 (+0.77%) advancing thanks to positive US data and a rebound in software stocks. Clearly that mood could change with Nvidia’s results after tonight’s close, but the news led to a bit more confidence in the near-term outlook, and the financial stress at the start of the week eased across several asset classes. Moreover, inflation concerns also fell back after Brent crude oil prices (-1.01%) declined for a second day. So there was a much more positive tone relative to Monday’s selloff, and futures on the S&P 500 (+0.01%) are just about higher as well this morning.

In terms of the latest on the AI side, there wasn’t much in the way of fresh headlines to drive markets yesterday, but we did see software and other tech stocks pare back their Monday losses. For instance, the NASDAQ (+1.04%) and the Magnificent 7 (+1.14%) both put in a decent performance, and the S&P 500’s software component (+1.28%) picked up from its 10-month low on Monday. Meanwhile, AMD (+8.77%) was the second-best performer in the S&P 500 after it was announced that Meta would acquire AMD chips with a total capacity of 6 gigawatts. So it was a strong session for tech stocks, which also supported broader US equity gains. By the close, more than 70% of the S&P 500’s companies were higher on the day, with consumer discretionary (+1.58%) and industrials (+1.23%) sectors leading the way. However, there were more concerns in the credit space, with US IG and HY spreads both edging +1bps higher, reaching their widest levels since December.

Risk assets got further support from the latest US data, as the Conference Board’s consumer confidence reading picked back up to 91.2 in February (vs. 87.1 expected). Moreover, the expectations component also rebounded to 72.0, up from a 9-month low the previous month. There were also promising signs on the labour market, as the ADP’s weekly private payrolls series hit a 2-month high, showing 4-week average growth of +12.75k in the period to February 7. So at the margins, that leant positively against the recent talk of AI-driven unemployment.

Given the more positive data and the tech stock rebound, investors also priced in a slightly more hawkish path for the Fed over the year ahead. For instance, the probability of a rate cut by the June meeting fell to just 52%, the lowest so far this year. And looking further out, just 55bps of cuts are now priced in by the December meeting, which was down -3.9bps on the day. So in turn, that pushed up front-end Treasury yields, with the 2yr yield (+2.3bps) up to 3.46%, although the 10yr yield (-0.2bps) was basically flat at 4.03%. Comments from Fed officials also leaned against imminent rate cuts, with Chicago Fed President Goolsbee warning that 3% inflation “is not good enough” and that they needed to make more progress. And Boston Fed President Collins said rate were likely to stay unchanged “for some time” and that she was looking for more confidence that disinflation resumes. There were also discussions around AI-related job losses too, with Governor Cook saying that “our normal demand-side monetary policy may not be able to ameliorate an AI-caused unemployment spell without also increasing inflationary pressure”.

Another supportive factor yesterday was the latest dip in oil prices, which helped to ease concerns on the inflation side. In part, that was driven by growing hopes for some sort of deal between the US and Iran that would avoid a military escalation. Indeed, Trump himself had posted on Monday evening after the US close that “I would rather have a Deal than not”. So that took a bit of the geopolitical risk premium out, with Brent crude down -1.01% to $70.77/bbl, whilst gold prices fell -1.60% to $5,144/oz. Trump echoed that rhetoric on a deal in last night’s State of the Union address, saying that his “preference is to solve this problem through diplomacy”.

Over in Japan, the yen weakened yesterday after the Mainichi newspaper reported that PM Takaichi was apprehensive about more rate hikes in a meeting last week with BoJ Governor Ueda. So it was down -0.78% against the US Dollar yesterday, making it the weakest-performing G10 currency. Then this morning, Japanese equities have seen a strong outperformance after the government nominated two reflationists to join the Bank of Japan’s board, who were seen as favouring more stimulus. So the Nikkei is up +2.60% this morning, on course for another record high, and bringing its 2026 gains to +16.83% already.

That optimism has been clear elsewhere in Asia, building on the overnight gains seen on Wall Street. So in South Korea, the KOSPI (+1.79%) is up for a 5th consecutive session, and also on track to close at a record. Similarly in Australia, the S&P/ASX 200 (+1.17%) is on course for an all-time high as well, despite a stronger-than-expected CPI report this morning, with inflation remaining at +3.8% in January (vs. +3.7% expected). So that’s seen investors price in more RBA rate hikes at the next few meetings, and the Australian Dollar has strengthened against every other G10 currency this morning, up +0.73% against the US Dollar. Otherwise, there’s also been gains for the Hang Seng (+0.72%), the Shanghai Comp (+0.99%) and the CSI 300 (+0.86%).

Earlier in Europe, most assets had also put in a decent performance yesterday, with the STOXX 600 (+0.23%) paring back some of Monday’s losses as well. That came as longer-dated yields continued to fall across the continent, with yields on 10yr gilts (-0.9bps) and BTPs (-0.5bps) at their lowest since December 2024, whilst 10yr OAT yields (-0.8bps) reached their lowest since July. For 10yr bund yields (-0.4bps) there was a comparatively smaller fall, but yields still closed at their lowest since November.

Looking at the day ahead, one of the main highlights will be Nvidia’s earnings after the US close tonight. Otherwise, central bank speakers include the Fed’s Barkin, Schmid and Musalem, and the ECB’s Vujcic. There’s not much data, but we will get the final Euro Area CPI print for January, along with the final Q4 GDP release from Germany.

A week after Bill Gates abruptly pulled out as a keynote speaker at a high-profile global AI summit in India, the left-wing billionaire finally mustered enough nerve to “take responsibility for his actions” over his ties to late financier and sex offender Jeffrey Epstein during a town hall meeting with Gates Foundation employees.

The Wall Street Journal reports that Gates told employees at a town hall event for the foundation on Tuesday that he never spent time with Epstein’s victims, and never visited Epstein’s island.

He revealed that Epstein later learned about two affairs he had with Russian women, but said those relationships did not involve Epstein’s victims. Gates said photos in the Epstein files show him with redacted women were taken by Epstein’s assistants after meetings.

Did Gates fall into a Russian honeypot?

“I did nothing illicit. I saw nothing illicit,” Gates emphasized, according to a recording reviewed by WSJ journalists.

Gates continued, “To be clear, I never spent any time with victims, the women around him.”

“It was a huge mistake to spend time with Epstein” and bring Gates Foundation executives into meetings with the sex offender, Gates said, adding, “I apologize to other people who are drawn into this because of the mistake that I made.”

Last week, the $86 billion philanthropic body’s last-minute decision to yank Gates was a major embarrassment and came as the Epstein fallout worsened, with many high-profile people under fire.

Related:

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“Knowing what I know now makes it, you know, a hundred times worse in terms of not only his crimes in the past, but now it’s clear there was ongoing bad behavior,” Gates said. He gave credit to his ex-wife, who “was always kind of skeptical about the Epstein thing.”

Gates told staff he began meeting Epstein in 2011, despite the financier’s 2008 guilty plea for soliciting a minor for prostitution. He said he was aware of the “18-month thing” that had restricted Epstein’s travel, yet continued the relationship, even after his then-wife, Melinda French Gates, raised serious concerns in 2013.

He said the relationship continued through 2014 and that he flew on a private jet with Epstein and spent time with him in Germany, France, New York, and Washington. “I never stayed overnight,” he said, or visited Epstein’s island.

He said Epstein “talked about the kind of intimate relationship he had with a lot of billionaires, particularly Wall Street billionaires,” and that he could help raise money for global health nonprofits.

“It definitely is the opposite of the values of the Foundation and the goals of the Foundation,” he said. “And our work is very reputation-sensitive. I mean, people can choose to work with us or not work with us.”

No matter what, the Gates Foundation has a dark cloud hanging over it because of Gates’ involvement amid the deepening Epstein fallout.

Gates is worth billions, so why would he need Epstein to raise money for global health nonprofits? Something doesn’t pass the sniff test in this damage-control town hall he held for his foundation’s employees.

Provided continued AI disruption, indiscriminate software stock selling, and credit market risks do not trigger a broader risk-off market event in the coming weeks or months, a June SpaceX IPO could become the bedrock for the grand reopening of the IPO market. The second-order effects of a SpaceX IPO would be improved sentiment toward AI companies going public and potentially a serious investor appetite for the low-Earth-orbit space industry.

Continuing our ever-evolving “how to profit” space theme, a newly listed company on U.S. exchanges is York Space Systems.

YSS is a U.S. government-focused Space Prime that builds standardized satellite buses (spacecraft platforms) at scale, integrates customer payloads, and supports the rest of the mission, launch coordination, the ground segment, and in-orbit operations.

“Its vertically integrated design and manufacturing process means its SVs can be produced at 50% of the cost and 20% faster than defense primes,” Goldman analyst Anthony Valentini wrote in a note on Monday.

Valentini told clients her markets team has begun to “initiate coverage of YSS at Neutral with a $29 price target.”

YSS’ ability to build spacecraft and offer aligned services at not just half the cost but in a quicker timeframe checks all the boxes that the U.S. military is searching for these days, especially with the DOGE unit at the Department of War resetting the procurement program away from big, bloated legacy primes to startups.

Valentini gives three reasons why her markets team favors YSS:

Growth: alignment to the growing space economy and shifting DoW purchasing preferences could lead to fast growth;

Business model: the business is capital light and structured to control cost, enabling lowest price solutions to customers;

Potential sticky high margin revenue: potential for recurring high margin software revenue as the installed fleet increases.

YSS was founded in 2012 and went public at the start of this year. Valentini described a little bit more of its operations:

The company bids as the Prime, under fixed-price contracting terms, manufactures satellite buses, and integrates the payload into its spacecraft for the customer. York serves the customer through the full mission life cycle; the company manufactures the satellite bus, integrates the payloads, organizes launch services, and provides mission operations post-launch.

How YSS benefits from the space industry:

“Left of Launch“: York bids on a contract as the prime, builds the satellite bus, integrates the payload, and delivers it to the launch provider so that the customer can then operate the satellite and receive data from the payload.

“Right of Launch“: York offers software services to operate the satellite for its customer. This is potentially a significant lever for the business because it is high-margin recurring revenue, but currently this offering forms less than 5% of the backlog.

The proliferation of space architecture provides a significant growth opportunity.

The space ecosystem has experienced significant growth in recent years as innovations in launch have reduced the cost to get to orbit, and militaries look to gain the high ground to ensure national security. The SDA has spent ~$14bn on SVs for the PWSA program, and the U.S. government funded ~$25bn for Golden Dome. The company expects that the intel community opportunity is 2x PWSA, and it can service $65bn of the potential $175bn for Golden Dome, leading to a TAM of $140bn.

YSS is one to track.  

Whether the catalyst is the incoming space boom or federal “Golden Dome” spending, YSS stands to benefit from both themes. Investors are already signaling bullish appetite for the space trade, as seen in the recent blast-off in a stock tied to a Korean broker that holds about $400 million in private shares of SpaceX and xAI.

Professional subscribers can read much more of the Goldman note here at our new Marketdesk.ai portal

Shares of Diageo Plc fell the most in 2 years after the maker of Guinness beer and Johnnie Walker whiskey cut its guidance for the second time this fiscal year amid soft demand in the US and China markets. The move marks an early challenge for new CEO Dave Lewis.

The British distiller now expects organic net sales to decline by 2% to 3% this fiscal year, down from previous guidance of flat to slightly down, and said it would reduce its dividend.

First-half results were mixed. Organic net sales fell 2.8%, worse than expected, while North America’s operating profit plunged 15%, missing analyst estimates tracked by Bloomberg Consensus. Europe was a bright spot, with operating profit rising 10% and beating forecasts. Adjusted EPS slightly beat, but overall sales and operating profit were much softer than anticipated by analysts.

Citi analyst Simon Hales said the cut to full-year organic sales growth guidance reflects a much weaker US environment and noted that it could prompt cuts to the 2027 outlook. He added that the dividend cut has “taken the shine off” what could otherwise have been seen as the “clearing event” for the stock to rally.

At Goldman, analyst Natasha de la Grense said the big story in the earnings report is the dividend cut. She noted investors are still waiting for a proper turnaround plan from the new CEO:

Main focus today is the dividend cut which is perhaps not a huge surprise (Mr Lewis did this when he arrived at Tesco) and arguably necessary but never welcome news on the day. They are targeting a 30-50% payout going forward with a minimum floor of 50c per annum (consensus FY26 100c). In terms of the H1, it’s a miss on org sales (-2.8% vs cons -2%) driven by volumes (-0.9% vs cons -0.2%) which were particularly weak in North America (-4%). US spirits net sales fell -9.3%. Reported EBIT is more in line at $3,256m (consensus $3,213m) and org EBIT better (-2.8% vs cons -3.9%) driven by A&P efficiencies (16.3% of sales vs consensus 17.7%). They are cutting sales and EBIT guidance as expected, now looking for sales -2-3% (cons -1%) and EBIT flat to +LSD (cons flat). The org profit guidance implies an acceleration in H2 underpinned by higher savings which are coming through earlier than expected. Spot FX rates imply a +$100m FX impact on sales per management (consensus +$200m). FCF guidance is reiterated. Not tons from the new CEO on strategy which is to be expected given he only started 1 Jan – he sees opportunities to enhance competitiveness and to deliver higher growth. In H1, Diageo grew or held market share in just 30% of markets.

Shares of Diageo in London tumbled 7.5%, marking the largest intraday decline since November 10, 2023, when shares dropped by 12%.

From the 2021 peak, shares have been more than halved and currently trade around 2015 levels.

RBC analyst James Edwardes Jones and Wassachon Udomsilpa told clients that softer sales performance, a guidance downgrade, and a dividend cut are a “non-event” due to the CEO’s new strategy, set to kick in later this year.

“We are going to have to wait for ‘later in the summer’ (hopefully not too much later) to get into the meat of Sir Dave’s plans for Diageo,” the analyst wrote.

The only problem for analysts hoping for a turnaround at Diageo is the mounting headwinds facing the industry, as younger generations are giving up alcohol for health reasons or perhaps simply lack the discretionary spending power.