Authored by Steve Watson via Modernity.news,

An unhinged leftist business owner from Minnesota told CNN’s Jake Tapper that there is no question ICE is running “concentration camps” and that federal officers could start “putting people in ovens” soon.

Tapper was platforming the deranged lunatic as a smattering of leftist-leaning shops in the city have shuttered their doors in “solidarity” against basic immigration enforcement, painting law-abiding agents as invaders while conveniently ignoring the chaos of open borders.

Jamie Schwesnedl, co-owner of Moon Palace Books in Minneapolis was there to explain why his business had closed for the day in protest against ICE operations, yet Tapper was provided a peak under that veneer and into the world of TDS radicalism.

“We can’t do business as usual right now, anyway, because our city has been invaded by masked gunmen kidnapping family members and friends and neighbors of ours to send them to concentration camps,” Schwesnedl proclaimed.

He added, “Additionally, there’s a lot of businesses in our area that have staff or customers or owners who are afraid to come to work, afraid to come in and shop. People are closing down today, and we felt like it wouldn’t be kind or fair for us to stay open, so we’re closing in solidarity to help send a message.”

This over-the-top rhetoric frames ICE agents – who are simply doing their job to enforce laws passed by Congress – as some kind of Nazi militia. It’s a classic leftist tactic: demonize border control to keep the floodgates open, even as communities suffer from the fallout of Biden-era lax policies that invited millions across unchecked.

Things escalated when Schwesnedl doubled down on his terminology, prompting Tapper to interject.

The CNN host, known for his establishment leanings, surprisingly pushed back, stating “Just one note, I’m not here to defend ICE, but I’m not a big fan of people using the term ‘concentration camp’ to describe detention camps. That has a very specific meaning.”

Schwesnedl wasn’t deterred. He fired back with historical references twisted to fit his narrative.

“I understand that, but they take people to Fort Snelling here, which literally was built as a concentration camp, and Alligator Alcatraz, which I think we can all agree is a concentration camp,” he replied.

Then came the kicker.

“I’m not saying they’re Dachau. I’m not saying they’re putting people in ovens — yet — but these are concentration camps. I don’t need to argue with you about that.”

That “— yet —” slips in like a Freudian admission, hinting at the wild conspiracy theories bubbling under the surface of anti-ICE activism. It’s not just exaggeration; it’s a deliberate smear against efforts to secure the nation, echoing the same hysteria that labeled Trump-era policies as “fascist” while ignoring the human trafficking and fentanyl crises fueled by porous borders.

For context, ICE detention facilities are civil holding centers for noncitizens caught illegally in the U.S., awaiting due process or deportation. They’re a far cry from the historical concentration camps Schwesnedl invokes, like those under Nazi Germany, which were instruments of genocide. Fort Snelling, a 19th-century military site in Minnesota, has a complex history including internment of Native Americans, but equating it to modern ICE ops is a stretch designed to inflame rather than inform.

The remarks underscore how these protests rely on emotional hyperbole over facts. In addition, the store closures involved only a “handful” of businesses, hardly a mass uprising, hardly worth even mentioning, yet CNN amplifies it as if it’s a national crisis.

Tapper’s stunned reaction highlights a rare crack in the media facade: even CNN hosts balk at rhetoric that veers into Holocaust trivialization. But Schwesnedl’s refusal to back down shows the depths of progressive entitlement, where enforcing borders is akin to invasion, and detaining lawbreakers is oppression.

It’s the perfect snapshot of leftist media propagandists and TDS activists spiraling as America First policies finally bite back against unchecked migration. Instead of addressing real community threats like crime waves tied to illegal entries, they’re equating detentions to historical atrocities – all to stir fear and undermine border security.

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Nvidia increased its investment in CoreWeave to accelerate the buildout of AI factories, adding more than 5 gigawatts of AI computing capacity by 2030. This builds on an existing agreement under which Nvidia has committed to buy more than $6 billion in services from the firm through 2032. 

“Demand for AI continues to grow exponentially and the need for compute has never been greater. To help meet this demand, NVIDIA and CoreWeave are deepening their infrastructure, software, and platform alignment,” CoreWeave wrote in a press release.

The new deal involves Nvidia purchasing $2 billion of CoreWeave Class A common stock at $87.20 per share.

Here’s what the expanded Nvidia-CoreWeave collaboration means:

Build AI factories developed and operated by CoreWeave using NVIDIA’s leading accelerated computing platform technology to meet customer demand.

Leverage NVIDIA’s financial strength to accelerate CoreWeave’s procurement of land, power and shell to build AI factories.

Test and validate CoreWeave’s AI-native software and reference architecture, including SUNK and CoreWeave Mission Control, to unlock deeper interoperability and work towards including those offerings within NVIDIA’s reference architectures for NVIDIA’s cloud partners and enterprise customers.

Deploy multiple generations of NVIDIA infrastructure across CoreWeave’s platform through early adoption of NVIDIA computing architectures, including the Rubin platform, Vera CPUs and Bluefield storage systems

Nvidia CEO Jensen Huang commented, “AI is entering its next frontier and driving the largest infrastructure buildout in human history.”

Jensen added, “CoreWeave’s deep AI factory expertise, platform software, and unmatched execution velocity are recognized across the industry. Together, we’re racing to meet extraordinary demand for NVIDIA AI factories – the foundation of the AI industrial revolution.”

The collaboration builds on CoreWeave’s purpose-built cloud, which enables customers to run AI workloads more efficiently and at scale.

CoreWeave CEO Mike Intrator said in a Bloomberg interview that Nvidia funding accounts for about 2% of what his company plans to spend on new infrastructure. “This year, we’re going to deliver an enormous amount of infrastructure, and that’s just going to accelerate over the next three years,” he said.

CoreWeave shares in premarket trading were up nearly 10%, while Nvidia shares were marginally lower.

All of this echoes the circular AI “circle jerk” deals that we pointed out last fall and has only helped propel the AI bubble.

US equity futures are weaker but have retraced much of their overnight lows as geopolitics and USD/JPY roil markets ahead of a significant earnings week, as Mag7 earnings reports kick off this week.As of 8:15am, S&P futures are down 0.1% while Nasdaq futures are 0.2% lower; Mag 7 stocks are mostly lower in premarket trading while both Cyclicals and Defensives are weaker.  The dollar extended its selloff on Monday as speculation, first reported here, swirled that the US could coordinate intervention with Japanese authorities to support the yen.USDJPY sees another significant decline on mounting intervention risk following Friday’s NY Fed rate check at the request of the BOJ. Bond yields are lower by 1-2bp as the yield curve bull steepens with JGB crash risk out of the picture for the time being. The FX moves are triggering a surge in gold and silver, which are up 2% and 6% to $5100 and $110 respectively, even as PGMs outperform gold. Ags are higher and natgas remains the story within Energy. In Eqy pre-mkt, Mag7 names are mixed, Semis are weaker, but Energy / Materials are higher with their underlying commodities. Today’s macro data focus is on Cap Goods / Durables and regional Fed activity indicators.

In premarket trading, Mag 7 stocks are mostly lower (Meta +0.4%, Microsoft +0.1%, Apple +1%, Amazon -0.2%, Alphabet -0.3%, Nvidia (NVDA) -0.7%, Tesla (TSLA) -0.6%

USA Rare Earth (USAR) soared as much as 50% after the Trump administration invested $1.6 billion into the mining company.
Precious metals stocks rise after gold surged past $5,000 an ounce for the first time.
Allied Gold (AAUC) rises 4% after Zijin Gold International agreed to acquire the miner for C$44 per share.
BlackRock TCP Capital Corp. (TCPC), a publicly traded middle-market lending fund, falls 12% as it expects to mark down the net value of its assets 19% after a string of troubled loans weighed on results.
Mannkind (MNKD) rises 2% after the FDA approved an update to the company’s inhaled insulin, revising recommendations for the starting mealtime dosage.
Revolution Medicines (RVMD) slides 21% after the Wall Street Journal reported that Merck ended talks to acquire the biotech firm, citing people familiar with the matter.
Sarepta Therapeutics (SRPT) rises 6% after the firm said it will report three-year topline data from its study of its gene therapy to treat patients with Duchenne muscular dystrophy on Monday.
SkyWater Technology (SKYT) rises 7% after IonQ Inc. agreed to buy the company in a cash-and-stock deal that values the chipmaker at about $1.8 billion.

In corporate news, SoftBank is said to have halted talks about an acquisition of US data center operator Switch, while the WSJ reported that Merck is no longer in talks to buy biotech firm Revolution Medicines after the pair failed to agree on a price. Samsung is getting close to securing certification from Nvidia for the latest version of its AI memory chip, narrowing the gap with rival SK Hynix.

Futures dropped but then rebounded, tracking moves in the Nikkei which slumped as the yen surged on signs that Tokyo and Washington coordinated on rate checks. This fueled volatility in foreign-exchange markets, as traders viewed the steps as preparation for direct intervention. Joint US-Japan action would give authorities greater power to deter speculators after the yen fell to an 18-month low earlier this month.

“The bigger signal is policy coordination,” said Daniel Baeza, senior vice president at Frontclear. “If markets interpret coordination as a willingness to tolerate easier global dollar conditions, especially alongside a dovish Fed reaction function, that could reinforce short-term dollar downside.”

Traders are also monitoring the possibility of a partial government shutdown. Senate Democrats have insisted that funding for the Department of Homeland Security be split off until Congress can agree on new guardrails for immigration enforcement, after agents killed two US citizens this year in Minnesota. Senate Republican leaders plan to reject the demands. 

“A potential shutdown would clearly represent some downside risks for the market mood as we just recover form the last one,” said BNP’s Kemper.

Besides a govt shutdown, earnings will be in the spotlight as the busiest week of the season gets underway, with four of the Magnificent Seven tech giants due to report. The group has driven market gains for much of the past three years, but that leadership faltered in late 2025 as Wall Street grew skeptical of whether massive AI spending will deliver returns. Results from Meta, Apple, Tesla and Microsoft will be dissected to see how their massive spending on AI is translating into profits. Earnings from RTX, Lockheed Martin and Northrop Grumman will likely reflect increased demand for weapons amid geopolitical tensions.

“The main focus from investors will likely be comments around AI-capex,” said Stephan Kemper, chief investment strategist at BNP Paribas Wealth Management. “Any sign of a slowdown could be seen as hyperscalers losing trust in the possibility to monetize those investments in a timely manner.”

Some of Wall Street’s top strategists are beginning to see early evidence that US profit growth is spreading beyond tech megacaps. An analysis by JPMorgan shows that forward guidance has topped expectations at roughly half of the S&P 500 companies that have provided an outlook for 2026. Goldman Sachs Group Inc. also expects earnings to support an expansion.  “Since most of the companies that have reported are outside the tech sector, this trend suggests a broadening of growth across other industries this year,” JPMorgan strategist Dubravko Lakos-Bujas wrote in a note.

In Europe, the Stoxx 600 is down 0.1%, opened on either side of the unchanged mark, before moving a little lower to now display a mixed/mostly negative picture. European sectors have opened mixed to slightly negative. Leading sectors are Basic Resources (+1.0%), Banks (+0.8%) and Energy (+0.6%). Basic Resources continues to be underpinned by strength in metal prices as gold and silver continue to gain strength as havens, whilst the energy sector has gained on the back of firmer crude prices. At the bottom of sectors reside, Travel & Leisure (-1.0%), Food Beverage & Tobacco (-0.9%) and Technology (-0.6%).

Asian stocks advanced amid choppy trading as gains in technology and material shares offset a slump in Japanese equities. The MSCI Asia Pacific Index rose as much as 1.1% early on Monday before halving its advance. MediaTek and Tencent provided the biggest boost. The Asian benchmark — which rose in each of the past five weeks — was also buoyed on Monday by gains in mining shares. The cohort climbed alongside metal prices as investors rotated into hard assets such as gold. Investors are awaiting earnings from some of the world’s top technology firms this week for further cues after the sector’s relentless rally. Stocks in Japan underperformed the region as exporters tumbled amid a yen rally sparked by increased speculation that authorities may intervene to support the currency’s slide. Gains in Asian stocks Monday also came amid broad weakness in the dollar as investors debated how potential US involvement in foreign-exchange intervention in Japan might worsen sentiment toward the world’s reserve currency.

In rates, treasuries hold small gains led by long-end tenors, with 20- and 30-year yields down 1bp-2bp from Friday’s closing levels as traders added to bets for 2026 interest-rate cuts after BlackRock Inc. executive Rick Rieder’s candidacy to helm the Federal Reserve gained momentum. With an announcement on the next Fed chair possible as soon as this week, rate expectations will be in focus as current Chair Jerome Powell delivers the latest decision on Wednesday. US front-end yields are little changed, leaving 2s10s and 5s30s spreads about 1bp flatter; 10-year near 4.21% is about 1bp lower vs 3bp decline for German counterpart, 5bp for French 10-year. European bonds outperform led by France following continued progress on budget plans. Dollar extends slide amid speculation the US could coordinate intervention with Japanese authorities to support the yen. This week’s Treasury coupon auctions begin a day early with 2-year notes; Treasury coupon auctions this week include 2-, 5- and 7-year notes on Monday, Tuesday and Thursday respectively, with FOMC rate decision Wednesday. WI 2-year yield near 3.59% is about 9bp cheaper than last month’s, which tailed by 0.3bp.

In FX, the yen surges on speculation of intervention, with the dollar sinking against most major currencies on deteriorating sentiment toward the greenback. However, Bank of Japan data offered no clear signal on whether the country intervened on Friday. Bloomberg Dollar Spot Index falls to lowest since September, while USDJPY dropped as low as 154 before rebounding.  

In commodities, gold rallies to a new record well above $5,100/ounce, and silver surges to around $109/ounce as investors seek out havens. Treasuries are higher and European bonds are rising. Oil prices wavering, with Brent hovering around $66/barrel.

US economic calendar includes November Chicago Fed national activity index and durable goods orders (8:30am) and January Dallas Fed manufacturing activity (10:30am)

Market snapshot

S&P 500 mini -0.2%
Nasdaq 100 mini -0.4%
Russell 2000 mini -0.2%
Stoxx Europe 600 little changed
DAX -0.2%
CAC 40 -0.3%
10-year Treasury yield -2 basis points at 4.21%
VIX +1.1 points at 17.14
Bloomberg Dollar Index -0.5% at 1187.53
euro +0.3% at $1.1862
WTI crude +0.2% at $61.17/barrel

Top Overnight News

US President Trump said administration is reviewing everything about the Minneapolis shooting and that immigration enforcement officers will at some point leave the area, according to WSJ.
The dollar extended its selloff and hit a four-month low on speculation the US may help Japan support the yen after a warning from PM Sanae Takaichi and comments from other top Japanese officials. BBG
Gold stormed beyond $5,000 for the first time and silver hit a record as traders revived the debasement trade. BBG
China launched a corruption investigation into top general Zhang Youxia. The surprising probe has implications for Taiwan, succession, and further turmoil in the Communist Party ranks, and raises questions about who Xi Jinping can trust within his inner ranks. BBG
US power grids face unprecedented demand as a massive storm left brutal cold in its wake. More than 800,000 homes and businesses are without electricity, and around 3,500 flights have been cancelled today. US natural gas soared almost 20%. BBG
Europe formally adopted a proposal that would ban Russian LNG imports starting in 2027, with pipeline gas imports halted by the fall of 2027. EU
The US is in talks with crude producers and oilfield service providers about a plan to quickly revive output in Venezuela at a fraction of the estimated $100 billion cost for a complete rebuild. BBG
Canada has “no intention” of pursuing a free trade deal with China, Prime Minister Mark Carney said, after U.S. President Donald Trump threatened to slap punitive tariffs on Ottawa. CNBC
Senate Democrats angered by the deadly shooting in Minneapolis said they wouldn’t vote for a government funding package without major changes to its homeland security provisions, raising the possibility of a partial government shutdown this coming weekend. WSJ
The American Academy of Pediatrics recommends children be vaccinated against 18 diseases, more than the U.S. government directs after it overhauled its schedule. The doctors group kept its guidance largely unchanged from its previous version from last year and said it doesn’t endorse the Centers for Disease Control and Prevention’s childhood-vaccine schedule. WSJ

Trade/Tariffs

India is to reduce tariffs on cars to 40% in a trade deal with EU, according to sources cited by Reuters.
EU and India are reportedly to explore possibilities for India’s participation in European defence initiatives.

Central Banks

BoJ accounts provided no clear signal of intervention in the JPY on Friday.
PBoC Deputy Governor Zou affirms will continue efforts to enhance market connectivity between mainland and Hong Kong. Pledges continued backing and steady development of Hong Kong’s offshore RMB market. To coordinate with authorities to increase yearly offshore RMB government bond issuance.
SNB has lowered the threshold factor for the remuneration of sight deposits of account holders subject to minimum reserve requirements from 16.5 to 15, as of 1st March.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly subdued amid Japanese intervention concerns and US President Trump’s latest tariff threat against Canada, in which he threatened to impose 100% tariffs if it makes a deal with China. Risk sentiment was also not helped by the Democrats threatening a partial government shutdown in revolt against the fatal shooting of an ICE protester in Minneapolis, while market conditions were somewhat quieter owing to the holiday closures in Australia and India. Nikkei 225 underperformed with the index pressured by a firmer currency amid US-Japan joint intervention concerns after Japanese PM Takaichi said the government is ready to take action against speculative moves, and with reports last Friday that the New York Fed conducted rate checks on USD/JPY. Hang Seng and Shanghai Comp were indecisive with demand contained amid reports that China is likely to target growth of 4.5% to 5% in 2026, while stocks also failed to benefit from news late last week that China told the biggest tech firms they can prep NVIDIA H200 orders.

Top Asian News

Japanese PM Takaichi rules out combining BoJ ETF holdings, pension funds, and reserves to form a sovereign wealth fund.
Japanese Chief Cabinet Secretary Kihara said the government will prepare a tentative budget if the FY26 Budget is unlikely to pass the Diet by the end of March.
Japan’s PM Takaichi said would like to achieve two-year suspension of 8% tax on food at the earliest date possible and submit relevant legislation in the fiscal 2026 Diet.
China’s Guangdong province targets 2026 GDP growth of 4.5%-5.0%.

European bourses (STOXX 600 -0.1%) opened on either side of the unchanged mark, before moving a little lower to now display a mixed/mostly negative picture. European sectors have opened mixed to slightly negative. Leading sectors are Basic Resources (+1.0%), Banks (+0.8%) and Energy (+0.6%). Basic Resources continues to be underpinned by strength in metal prices as gold and silver continue to gain strength as havens, whilst the energy sector has gained on the back of firmer crude prices. At the bottom of sectors reside, Travel & Leisure (-1.0%), Food Beverage & Tobacco (-0.9%) and Technology (-0.6%).

Top European News

French Finance Ministry announces that France will hold a G-7 finance call on Tuesday.
EU Commission to open proceedings against X’s AI chatbot grok on Monday under the Digital Services Act, via Handelsblatt report, citing EU officials.

FX

DXY gapped lower at the open from Friday’s 97.456 close, with the index off its worst and best levels at the time of writing, towards the middle of a 96.949-97.333 band. The index remains suppressed by the aforementioned JPY strength, alongside risks of a US government shutdown also increasing after Democrats said they will not support a funding package without changes to homeland security provisions.
JPY is the standout gainer, bolstered by double intervention risk after Japanese PM Takaichi warned that the government is ready to take action against speculative moves amid a weakening currency and surge in bond yields, while it was reported on Friday that the New York Fed had conducted rate checks on USD/JPY. Analysts at ING succinctly highlight two reasons for Washington’s involvement: “a) the weak yen was adding to last week’s JGB sell-off and indirectly driving US Treasury yields higher. If there is any financial instrument more important than the stock market to the White House right now, it is US Treasuries. And b) the strong USD/JPY was potentially unwinding the work of US tariffs on Japan and giving Japanese manufacturers a competitive advantage.” USD/JPY slumped from Friday’s 155.74 close to a Monday trough at 153.40, slightly under the 100 DMA (153.54).
EUR benefits from the USD weakness but trades off best levels after hitting resistance at 1.1898 (vs 1.1837 low) shortly after the resumption of trade. Little action was seen on the sub-par German Ifo report, and with the EZ docket also light ahead.
CHF mildly gains due to its haven status amid the looming US government shutdown, alongside President Trump’s 100% tariff threat on Canada if it makes a trade deal with China. On that note, USD/CAD trades on a softer footing amidst the aforementioned USD weakness, with the pair also dipping under the psychological 1.3700 mark to a 1.3675 low at the time of writing.
Antipodeans trade on a firmer footing with AUD underpinned as spot gold briefly topped USD 5,100/oz earlier in the session. AUD reached a high of 0.6934 from a 0.6896 close on Friday.

Fixed Income

Fixed income benchmarks are in the green. USTs firmer by a handful of ticks, at the top-end of a 111-25 to 111-29+ band. The US session is relatively quiet, aside from 2yr supply ahead. Strength for fixed is perhaps a function of the slight equity pressure, which in turn can be explained at least in part by ongoing/renewed trade tensions relating to the US, Canada and China, after Trump’s rhetoric. One other point of support might be the US conducting a rate check in the JPY on Friday, as this could be interpreted as a precursor to joint intervention; given the moves in long-end Japanese yields seen last week, and the global influence that had, any such action could target JGBs in addition to the Yen.
Bunds are firmer, with gains of just over 20 ticks at best. Specifics for the bloc are a little light, with no move seen to German Ifo, which came in softer-than-expected for the climate figure, while the other components were mixed vs prev. For the EZ, the week is mainly waiting to see how the trade situation develops, with the EU meeting today to discuss unfreezing EU-US talks.
Gilts outperform, gains of c. 30 ticks at a 91.56 high. Upside that is, primarily, being driven by the news that Greater Manchester Mayor Burnham will not be able to run for the vacant Labour MP seat. This blocks Burnham from launching a leadership challenge against PM Starmer, as some have speculated he might, despite Burnham himself suggesting Starmer is the best person to be PM currently. While welcomed by Gilts, the block has prompted significant backlash against PM Starmer from within the Labour Party, and as such, this narrative may return.
Gulf Cooperation Council nations have issued c. USD 32.3bln of international bonds YTD, +25% Y/Y, Bloomberg reported.
Japan sold JPY 299.9bln in 5yr Climate Transition Bonds b/c 3.49 (prev. 3.98), price at highest accepted yield 99.61 (prev. 99.53), highest accepted yield 1.684% (prev. 1.098%). Allotment for Bids at the Highest Accepted Yield 24.2857% (prev. 35.6363%).

Commodities

WTI Mar’26 continues to oscillate beyond USD 61/bbl while Brent Apr’26 rotates around USD 65/bbl, seemingly unaffected by the day’s rise in Nat Gas prices, despite the gradual rise in crude prices in recent sessions due to concerns of supply disruptions.
Henry Hub futures gapped beyond USD 6/MMBtu, its highest level since the start of the Ukraine war, while the Dutch TTF future nears EUR 42/MWh, following the Arctic storm in the US that has shut around 10% of production in the US. Prices of natural gas have been rising in recent days due to poor weather across Europe, Asia and now the US, freezing oil and natural gas wells, in addition to geopolitical concerns and accompanying supply concerns.
Precious metals continue their historic bid higher, with spot gold trading beyond USD 5,000/oz and briefly extended above USD 5,100/oz, while spot silver trades just shy of USD 110/oz.
3M LME Copper is currently trading in the middle of the USD 12.52k-13.41k/t band that has been forming since the start of 2026 as supply/demand dynamics support the red metal. Supply disruptions were the main driver throughout 2025 but as the worries wane, demand has continued to grow due to AI demand.
Ukraine’s military said it struck a Russian oil refinery in Krasnodar region.
China’s Shanghai Futures Exchange to adjust price limits, margin ratios for copper and aluminium futures contracts from the 28th January closing settlement.
Kazakhstan’s Energy Ministry said that production is to be relaunched for the Tengiz oil field in the near future.
EU has given final approval to the Russian gas ban; will entirely ban Russian LNG imports by 1st January 2027, and pipeline gas by 30th September 2027.
Kazakhstan’s Tengizchevroil is reportedly gradually restarting its Tengiz production.
OPEC+ is likely to maintain its supply pause in March, Bloomberg reported citing delegates; adds that there is no need to respond to the events in Venezuela and Iran but a significant supply disruption would warrant a boost in output.
PBoC Deputy Governor supports the development of Hong Kong’s gold market, strengthening its offshore RMB market functions.

Geopolitics: Ukraine

Ukraine’s military said it struck a Russian oil refinery in Krasnodar region.
EU has given final approval to the Russian gas ban. Will entirely ban Russian LNG imports by 1st January 2027, and pipeline gas by 30th September 2027.
Russian Presidential Envoy said Ukrainian President Zelensky is hindering peace by postponing the issue of land settlement, Al Arabiya reported.
Russia’s Kremlin said that constructive talks with Ukraine are underway, according to RIA.

Geopolitics: Middle East

“Commander of Iran’s Naval Forces: Armed Forces Fully Prepared to Protect the Country”, Sky News Arabia reported.
OPEC+ is likely to maintain its supply pause in March, Bloomberg reported citing delegates; adds that there is no need to respond to the events in Venezuela and Iran but a significant supply disruption would warrant a boost in output.
Iranian Foreign Ministry Spokesperson said that Iran is stronger and more capable than ever before, and will certainly respond to any aggression with a broad and deterrent response.

Geopolitics: Other

Chinese Commerce Ministry Official said China and the US maintained communication at various levels following the leaders’ summit in South Korea. China and the US are to manage differences and promote stable trade ties.

US Event Calendar

8:30 am: United States Nov Chicago Fed Nat Activity Index, est. -0.2, prior -0.21
8:30 am: United States Nov P Durable Goods Orders, est. 3.75%, prior -2.2%
8:30 am: United States Nov P Durables Ex Transportation, est. 0.3%, prior 0.1%
10:30 am: United States Jan Dallas Fed Manf. Activity, est. -8.6, prior -10.9

DB’s Jim Reid concludes the overnight wrap

With the year still not yet four weeks old, it’s already been a tour de force of news volatility, even as market volatility has remained relatively contained. We’ve moved from Venezuela to Japan, via Iran and Greenland, with a range of other themes running in the background. These now include President Trump on Saturday threatening 100% tariffs on Canada if China strikes a trade deal with them, and the odds of another US government shutdown after January 30th (Friday) jumping on Polymarket from 8% on Friday to 78% this morning. This followed Senate Democratic leader Schumer warning that they will block the spending package unless Republicans defund Homeland Security after a Border Patrol shooting at a protest in Minnesota on Saturday linked to the immigration crackdown.

If that weren’t enough to be getting on with, Rick Rieder’s odds of becoming the next Fed Chair surged from around 33% as Europe closed on Friday to over 60% at one point over the weekend, before settling at 47% this morning. The perception in markets is that he would be more market friendly than the previous front runner, Kevin Warsh, who is now trading at 29% on Polymarket. He was at 65% last Monday.

Finally in the UK, Andy Burnham was yesterday blocked by the ruling Labour Party from contesting an imminent by-election. Burnham is seen as a potential challenger to PM Starmer with lots of party support. Gilts may see some relative relief this morning as Burnham had said last September that the UK needs to “get beyond being in hock to the bond markets”.  However this story is unlikely to completely go away. With all this going on it’s perhaps no wonder that Gold (+8.52%) was within two-tenths of a percent of its best week since 2008, marginally behind one week in 2020. It’s up another +1.7% this morning and has flown past $5000 for the first time. However the Dollar has just had its worst week for 8 months, falling against all its peers, and has continued to weaken this morning.

So there are plenty of balls in the air right now, but the one perhaps most urgently needing careful handling is Japan. On Friday afternoon in Europe, news broke that the New York Fed had conducted a “rate check” on USD/JPY on behalf of the US Treasury. 

This morning, the Japanese yen is around +1.1%, trading at 154.05 against the dollar, marking its strongest position since November. Various official have refused to confirm or deny overnight any intervention so far. 2yr JGBs are around +3bps higher with 10yr and 30yr yields -1bps and flat respectively while the Nikkei is -1.90% due to the strong Yen since Friday.

Elsewhere in Asia, the KOSPI (-0.90%) is lower with some looking at the weak KRW as a potential for intervention risk. The Korean Wong is up +1.7% this morning. Chinese equities are up a little with S&P 500 (-0.28%) and NASDAQ 100 (-0.41%) futures both lower.

The main event this week will be the Fed’s decision on Wednesday with the main focus not on the likely unchanged Fed Funds rate but on what Powell says about a variety of things in the presser (more below). The Bank of Canada meet the same day with Sweden’s Riksbank meeting on Thursday, with both also expected to be on hold. Finally, the ECB will publish its monthly consumer expectations survey on Friday. In terms of data, the US sees durable goods (today), consumer confidence (tomorrow) and PPI (Friday). In Europe preliminary January CPI for countries including German and Spain are released, alongside Q4 GDP for the main economies all on Friday. The German Ifo is out today.

Over in Asia, a likely busy week of news flow for Japan is bookended with a big data dump on Friday featuring the Tokyo CPI, consumer confidence, retail sales and industrial production. The Lower House election campaign begins tomorrow ahead of the 8 February vote. Other notable indicators due in the region include December industrial profits in China tomorrow and Q4 CPI in Australia on Wednesday (our economists expect the quarterly trimmed mean print at 0.9% QoQ / 3.3% YoY).

Rounding out with corporate earnings, an important week is ahead featuring results from four Magnificent 7 stocks – Microsoft, Meta and Tesla on Wednesday and Apple on Thursday. The four make up 16% of the S&P 500 by market cap, with the overall list of firms reporting next week totalling 32% of aggregate capitalisation. Other tech highlights include ASML, Samsung, IBM and SAP. The focus will also be on defence firms RTX, Northrop Grumman and Lockheed Martin. On Friday, big oil firms Exxon and Chevron will also report. In Europe, highlights also include LVMH, Roche and Sanofi.

Previewing Wednesday’s FOMC meeting, our economists expect the Federal Reserve to leave policy unchanged while striking a slightly firmer tone on the underlying economic backdrop. Although the usual focus would be on the policy outlook, circumstances this time mean that Chair Powell’s press conference is likely to dwell heavily on non-economic matters. Questions will inevitably surface around the recent DoJ subpoena, the situation involving Governor Cook, and the broader issue of future Fed leadership. Powell will probably lean on the themes of his recorded statement from 11 January, emphasising the importance of institutional independence and resisting political pressure — a message he is unlikely to dilute given the current environment.

On the policy statement itself, our economists expect the Fed to upgrade its description of growth from the previous “moderate pace” to something closer to a “solid pace,” consistent with Vice Chair Jefferson’s comments on 16 January. They also expect the Committee to acknowledge a somewhat steadier labour market, reflecting the more recent data flow available since the November meeting. Inflation is trickier: with core PCE still running at 2.8% year on year into November, progress has been limited, and the Committee may simply reiterate that inflation remains “somewhat elevated,” echoing Jefferson’s framing of recent developments.

Where the statement may shift most meaningfully is the second paragraph. Over the past several meetings, the Fed has justified its easing bias by pointing to rising labour market risks. Given the more balanced labour picture and the lack of discernible improvement on inflation, our economists believe the Committee may drop its explicit reference to labour market deterioration and revert to the more neutral line that it remains attentive to risks on both sides of the mandate — while stopping short of last year’s language that risks were “roughly balanced.”
Taken together, Wednesday’s decision and press conference should reinforce the idea that policy is now within the Fed’s estimated range of neutral and that the Committee is well placed to respond in either direction if incoming data justify a move. Nearly all voters are likely to endorse that message, though Governor Miran will likely dissent in favour of additional easing. 

Recapping last week, markets endured another round of whipsaw action amid lingering questions over Greenland. As a reminder, over the previous weekend Trump announced 10% tariffs on several European countries by February 1 and until the US obtained control of Greenland. That sent the STOXX 600 (-1.19%) to its worst performance in two months on Monday, while the S&P 500 (-2.06%) posted its worst day in three months when US markets returned on Tuesday. Sentiment improved on Wednesday after Trump said the US would not use force to acquire Greenland and dropped the tariff threat after agreeing to “a framework of a future deal” with NATO’s Mark Rutte. Equities recovered somewhat, but the STOXX 600 (-0.98%, -0.09% on Friday) and the S&P 500 (-0.35%, +0.03% on Friday) still ended the week lower. This was the first time since June that the S&P had seen two consecutive weekly declines.

It wasn’t all negative: a tech rebound pushed the Mag 7 +1.10% higher (+1.04% Friday). And although the VIX closed above the 20 level for the first time since November on Tuesday, it finished the week little changed at 16.09 (+0.23 bps). Meanwhile, geopolitical concerns helped gold rise to within sight of the $5,000 level, with its best week since the early months of Covid in 2020 (+8.52% to $4,987/oz). Silver also surged +14.50% to $103.19/oz (+7.22% Friday), extending its YTD gain to +44%.

Bond markets saw similarly turbulent moves. The most dramatic shifts came in JGBs, where the 30yr yield spiked +26.6bps on Tuesday to 3.84%, its biggest daily increase since 1999. The moves later moderated, with 30yr JGB yields ending the week +14.6bps higher and 10yr yields +6.7bps higher. In Europe, 10yr bunds (+7.1bps) and gilts (+11.2bps) also sold off as geopolitical volatility heightened concerns about increased European defence spending and the resulting fiscal pressure.

US Treasuries initially slumped on geopolitical noise and firm data, but ended the week little changed. The 2yr yield rose +0.7bps to 3.95% (-1.2bps Friday), while the 10yr yield edged up +0.2bps to 4.23% (-2.0bps Friday). The stronger US data included initial jobless claims falling to 200k (vs 209k expected), which pushed the 4 week moving average to a 2 year low of 201.5k, and Friday’s stronger than expected University of Michigan final consumer sentiment reading (56.4 vs 54.0 expected). Despite that, yields rallied late on Friday, supported by rising expectations that Rick Rieder would be chosen as the next Fed Chair.

The dollar index fell -1.80%, its worst week in eight months (-0.77% on Friday). By contrast, the Japanese yen — which had been drifting toward its weakest levels since 2024 — sharply rebounded on Friday (+1.74% to 155.70 against the dollar) amid renewed speculation about FX intervention. That followed a relatively uneventful BoJ decision earlier on Friday, which left rates unchanged at 0.75%, with one dissent (8–1) in favour of another 25bp hike.

Let’s see what this week brings as an eventful January draws to a close!!