16th January 2026

MACRO

Trump Tech Power Deal

Trump and governors of several Northeastern states agreed to push for an emergency wholesale electricity auction that would compel technology companies to effectively fund new power plants.

The auction would deliver contracts supporting new power plant construction, with tech giants paying for power over 15-year contracts, whether they use the electricity or not.

(Bloomberg)

Trump Fed Chair Search

Trump was impressed by Kevin Warsh in an interview for Fed Chair last month, telling associates over the holidays he was struck by his acumen and good looks.

(Wall Street Journal)

US Treasuries and Policy

Overseas holdings of US Treasuries advanced in November to the highest level on record, with increases in Norwegian, Canadian and Saudi Arabian stockpiles helping offset another monthly drop in China’s total.

Trump threatened to invoke the Insurrection Act to deploy military forces in Minnesota after days of angry protests over a surge in immigration agents in Minneapolis.

US companies are more upbeat about doing business in China after the trade truce between Trump and Xi, according to the American Chamber of Commerce in China.

Trump’s investments in municipal and corporate debt through December included bonds from companies such as Netflix, General Motors, and Boeing.

(Bloomberg, Reuters)

Japan Markets and Policy

The yen strengthened after Finance Minister Katayama said Tokyo would not rule out any options to counter excessive FX volatility, including coordinated intervention with the US.

Reuters sources note some BOJ policymakers see scope to raise interest rates sooner than markets expect, with April a distinct possibility, as a sliding yen risks adding to inflationary pressure.

At next week’s meeting, the BOJ is likely to raise its economic growth and inflation forecasts for fiscal 2026.

Japan’s Nikkei fell for a second consecutive session as investors took a breather from the rally driven by hopes for fiscal stimulus.

Japan’s five-year government bond yield hit a record high as a sharp drop in the yen raised expectations for an early BOJ rate hike.

Japan’s largest opposition party (CDP) and former ruling coalition partner Komeito announced a merger, forming a bloc that could hinder PM Takaichi’s attempt to consolidate power in a snap election.

Most BOJ watchers surveyed judge that Governor Ueda and his colleagues have been slow in ratcheting up rates. The most popular timing for the next hike is July, with 48% of economists picking that month.

The BOJ will soon begin selling its holdings of ETFs and real estate investment trusts under guidelines it set last year.

PM Takaichi and Italian PM Meloni agreed to work together on critical mineral supply.

(Reuters, Bloomberg)

China Markets and Policy

China is removing servers dedicated to high-frequency traders from local exchanges’ data centers, a move led by regulators that will affect both domestic and global firms.

After a year of gung-ho AI news, some elite Chinese researchers are coming to a more pessimistic conclusion - the country’s chances of catching up to the US are slim in the short run because of a bottleneck in chips.

China’s yuan touched a 32-month high against the dollar and was poised to register its longest winning run in over five years.

China’s population policy is emerging as a key part of its economic strategy as Beijing rolls out its most wide-ranging push to boost a flagging birth rate.

Some ETFs heavily owned by China’s “national team” saw record outflows, aligning with efforts to temper the stock market rally.

One of China’s largest asset managers has become the first company in the country to pass Rmb1 trillion in ETFs under management.

Chinese companies ramped up use of the euro in cross-border transactions last year, with settlements rising at the fastest pace since 2010.

Chinese banks helped clients sell a record amount of foreign currencies back into the yuan in December.

China’s local state-owned entities are actively investing in small and medium-sized banks.

Record gold prices have driven Huaan Fund Management’s gold ETF above 100 billion yuan, the first in China to surpass that value.

(Bloomberg, Reuters, Financial Times, Wall Street Journal)

Canada-China Partnership

Canada and China are forging a new strategic partnership that promises “historic” gains by leveraging each other’s strengths, Canadian PM Mark Carney told Chinese leader Xi Jinping.

(Reuters)

European Developments

The ECB will not debate any rate change in the near term if the economy stays on course, but new shocks could upset the outlook, ECB chief economist Philip Lane said.

France’s government has postponed its 2026 budget talks in parliament to Tuesday next week, as lawmakers have failed to reach a compromise.

The UK statistics agency has drawn up contingency plans to delay the launch of its new labor market survey by six months.

(Reuters, Bloomberg)

Asia-Pacific Developments

New Zealand’s economy is showing signs of a full-blown recovery with manufacturing activity surging in December to its highest level since 2021.

Heavy rainfall in northeast Australia has triggered floods hampering mine operations and disrupting supplies of metallurgical coal.

South Korea’s planned $350 billion investment in strategic US sectors is unlikely to kick off in the first half of 2026, the Finance Minister said.

Taiwan aims to become a close strategic partner with the US in AI after striking a deal to cut tariffs and boost investment.

Malaysia’s economy expanded faster than expected in Q4, helping full-year growth beat official estimates.

Philippine economic managers rallied business executives at a private forum, seeking to restore investor confidence shaken by a massive government corruption scandal.

Poland may return to interest rate cuts next month with a quarter-point reduction.

(Wall Street Journal, Bloomberg, Reuters)

GEOPOLITICAL

Venezuela Oil Reform

Venezuela’s acting President Delcy Rodríguez presented a reform to the nation’s hydrocarbons law and announced the creation of two funds into which dollars from oil sales will be funneled.

(Bloomberg)

Greenland

Denmark and Greenland are stepping up lobbying of US lawmakers in an effort to head off Trump’s push to take control of Greenland.

(Bloomberg)

South Africa

The US criticised South Africa for allowing Iran to participate in naval drills off the coast of Cape Town.

(Bloomberg)

EQUITIES

Chinese Companies Seeking Overseas AI Access

Chinese companies have started discussions about renting computing power at data centers in Southeast Asia and the Middle East to get access to Nvidia’s next-gen Rubin chips.

Washington’s recent decision to allow Nvidia to sell its H200 chip in China isn’t likely to be a game-changer. People at Chinese tech companies said the H200, which is two generations behind Rubin, has become insufficient for training state-of-the-art AI.

An Alibaba AI executive was asked at a Beijing conference about the chance of any Chinese company leapfrogging OpenAI and Anthropic over the next three to five years. His on-the-spot guess was 20% or less.

(Wall Street Journal)

OpenAI and Microsoft Trial

A federal judge in Oakland rejected requests by OpenAI and Microsoft to dismiss claims by Elon Musk and ordered the case to proceed to a jury trial.

(Bloomberg)

Mitsubishi Shale Acquisition

Mitsubishi has agreed to acquire Aethon’s shale gas assets in Texas and Louisiana for $5.2 billion, its biggest acquisition ever.

(Wall Street Journal)

Verizon-Frontier Deal

Verizon has received the final approvals needed to buy fiber-optic broadband provider Frontier Communications for $9.6 billion after agreeing to some concessions to California regulators.

(Wall Street Journal)

China Auto Price Wars

Chinese regulators warned of “severe penalties” against automakers after they started a new round of price cuts, defying a campaign by authorities to curb excessive competition.

(Bloomberg)

JPMorgan Europe M&A

JPMorgan is looking to add dealmakers in Europe, as the lender predicts a bumper year for M&A in 2026.

(Bloomberg)

CMOC Copper Growth

Major Chinese miner CMOC Group plans copper growth of up to double digits in 2026 after a price rally lifted profit.

(Bloomberg)

X/Grok Probe

Japan said it has become the latest country to probe X over Elon Musk’s AI service Grok, stating the government would consider every possible option to prevent the generation of inappropriate images.

(Reuters)

TikTok Age Detection

TikTok will start rolling out new age-detection technology across Europe in the coming weeks, as the ByteDance-owned platform faces regulatory pressure to better identify and remove accounts belonging to children under 13.

(Reuters)

Samsung Foundry

Samsung Foundry is gaining strong momentum, with big order backlogs and high demand for both its mature 8nm process and its newer 4nm node.

(ZDNet)

Other Notable Moves

Coinbase CEO Brian Armstrong roamed the halls of the Capitol to assure the company would continue to be able to pay stablecoin rewards.

Walmart International CEO Kathryn McLay is stepping down.

J.B. Hunt Transport recorded lower revenue in Q4 as transcontinental load volumes declined.

HSBC said it was undertaking a strategic review of its insurance manufacturing business in Singapore.

(Bloomberg, Wall Street Journal, Reuters)

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