26th January 2026

MACRO

Fed Asked Banks About Yen-Dollar Swaps - Coordinated Intervention Speculation Grows

The New York Fed asked banks on behalf of the Treasury Department about the cost of exchanging yen for dollars - a highly unusual move that prompted a sharp recovery in the Japanese currency during US trade on Friday.

PM Takaichi said Sunday her government will take necessary steps against speculative market moves. Top Japanese authorities said Monday they’ve been in close coordination with the US on foreign exchange but declined to confirm the rate check reports. Finance Minister Katayama said the government is monitoring forex markets “with a sense of urgency.”

The stronger yen weighed on Japan’s Nikkei on Monday, hitting exporters including automakers and electronics manufacturers. Takaichi’s approval rating has slipped ahead of next month’s election - a Nikkei survey showed support fell below 70% for the first time, dropping to 67% from 75% in December. Former Finance Minister Yoshihiko Noda said any intervention will have limited effect unless Japan gets its fiscal house in order.

(New York Times, Reuters, Wall Street Journal)

Gold Breaks $5,000 for First Time

Gold has smashed through $5,000 an ounce for the first time, with worries about a US government shutdown adding fresh fuel to the rally. Money managers increased bullish wagers to the highest since October as Greenland anxieties prompted rotation into hard assets away from currencies and sovereign bonds.

(Wall Street Journal, CFTC)

Trump Threatens 100% Tariffs on Canada

Trump warned he’d impose 100% tariffs on all Canadian goods if “Canada makes a deal with China” - a major escalation in the trade war with Mark Carney’s government.

Treasury Secretary Bessent signalled potential removal of additional 25% tariffs on India following a sharp reduction in Indian imports of Russian oil. India plans to slash car tariffs on EU imports to 40% from as high as 110% as the two sides close in on a free trade pact that could come as early as Tuesday.

(Wall Street Journal, Reuters)

China Investigating Xi’s Top General

China is investigating its No. 1 general and Politburo member Zhang Youxia - a shocking move targeting a key Xi ally that leaves the apex military body with just two people. Zhang is accused of leaking information about China’s nuclear weapons programme to the US and accepting bribes, including for promoting an officer to defence minister.

China may cut its RRR or interest rates in the first half to ensure ample liquidity, with the policy rate cut window potentially landing in Q2. China plans to hire the largest number of tax officials in more than a decade as Beijing steps up taxation reform amid a widening budget deficit. Hong Kong will double the yuan supply available for banks to borrow to meet growing demand.

(Bloomberg, Wall Street Journal, Securities Daily, Financial Times)

BlackRock Private Debt Fund Marks Down 19%

A BlackRock private debt fund expects to mark down net asset value by 19% after troubled loans weighed on results - the latest sign of pressure in the private credit market. The fund struggled partly due to exposure to e-commerce aggregators and troubled home improvement company Renovo Home Partners.

(Bloomberg)

US Border Agent Kills Man in Minneapolis

A US Border Patrol officer shot and killed a 37-year-old man in Minneapolis on Saturday, dramatically escalating the standoff between Minnesota and the federal government following an earlier fatal shooting. Trump signalled willingness to eventually withdraw immigration enforcement officials from the Minneapolis area.

A winter storm has caused roughly 11,900 flight cancellations and left about 900,000 power customers without electricity, primarily in the South.

(Wall Street Journal)

UK Labour Market Cooling, AI Job Losses Accelerating

Job vacancies in Britain continued to fall in December and advertised salary growth slowed, adding to signs of a cooling labour market. The UK is losing more jobs than it’s creating due to AI at a faster rate than international peers, according to Morgan Stanley.

The Bank of England is restructuring the top of its monetary policy and analysis teams in a shake-up seen as strengthening Deputy Governor Clare Lombardelli’s hand.

Labour blocked Greater Manchester mayor Andy Burnham from standing as an MP, triggering political backlash. Allies of the PM feared Burnham would challenge Starmer for the party leadership.

(Reuters, Bloomberg, Financial Times)

Other Macro Developments

Poland is in no hurry to join the eurozone, with the government arguing strong economic performance shows it’s better served by retaining the zloty. Fitch raised Turkey’s outlook to positive, citing increased FX reserves and reduced policy loosening risk.

South Africa’s budget will show government debt stabilising relative to GDP for the first time in almost 20 years. South Korea’s small-cap index soared to the highest since September 2000 as investors bet the world-beating rally will spread. Indonesia recorded its first stock outflow since October ahead of MSCI index changes.

Russia’s Arctic cities of Murmansk and Severomorsk are without power for a fourth day after aging infrastructure failed amid freezing temperatures.

(Financial Times, Bloomberg, Reuters)

GEOPOLITICAL

Ukraine-Russia Talks End Without Deal

Ukraine and Russia ended a second day of US-brokered talks in Abu Dhabi without a deal, but more talks are expected next weekend. “We saw a lot of respect in the room between the parties because they were really looking to find solutions,” said a US official.

Kyiv and other Ukrainian regions came under a massive Russian drone and missile attack on Friday night as talks continued. Ukraine hopes EU accession will be fast-tracked “as early as possible” as part of the peace process but knows there’s no agreement on timeline.

(Reuters, Bloomberg, Financial Times)

Trump Administration’s Softer China Stance

The Trump administration’s annual defence strategy report takes a softer tone toward China than in years past, calling for deterrence “through strength, not confrontation” while focusing on Western Hemisphere threats from migration and narcotics.

China will prioritise alliance with neighbouring countries and maintain stable relations with major powers including the US, Russia and Europe over the coming five years, according to Vice Foreign Minister Ma Zhaoxu.

(Bloomberg, People’s Daily)

Iran’s Oil Profits Collapsed Despite Record Exports

Iran exported more oil in 2025 than it had in years, smuggling crude in defiance of sanctions mainly to China. But the regime’s profits from oil collapsed - falling global prices compressed margins, but the decline was largely driven by middlemen and buyers exploiting Tehran’s precarious position and dependence on oil revenue.

Russian fuel oil exports to Asia slowed in early 2026 as tighter Western sanctions hampered trade while Ukrainian drone attacks on refineries reduced output.

(Wall Street Journal, Reuters)

UK Defence Concerns Over Trump Threats

Trump’s threats to Western allies are fuelling concern in parts of the UK government about London’s reliance on Washington for defence. A multibillion-pound contract to build next-generation military satellites is set to become a key flashpoint.

A top Pentagon official praised South Korea as a model ally ready to take greater responsibility for its own security after the new US defence strategy signalled reduced American military support.

(Financial Times, Bloomberg)

EQUITIES

Trump Investing $1.6 Billion in US Rare Earths

The Trump administration is planning to inject $1.6 billion into USA Rare Earth - its biggest investment in the sector - as Washington shores up supplies of key minerals. A separate $1 billion private financing deal is expected to be announced today.

(Financial Times)

Nvidia’s Jensen Huang in China

Jensen Huang arrived in Beijing on Sunday after two days in Shanghai. He’s expected to attend Nvidia’s Lunar New Year celebrations and meet Chinese clients. It’s unclear if he’ll meet senior Chinese officials during the trip. Nvidia announced the departure of director Persis Drell, who is leaving to “pursue a new professional opportunity.”

(The Information, China Daily, Bloomberg)

Samsung to Supply HBM4 Chips to Nvidia

Samsung plans to start production of next-generation HBM4 chips next month and supply them to Nvidia. Samsung shares rose while competitor SK Hynix declined on the news.

(Reuters)

SoftBank Halts Switch Acquisition Talks

SoftBank has halted talks to acquire US data centre operator Switch - a setback for Masayoshi Son’s Stargate AI infrastructure ambitions.

Some of the largest US data centre operators are planning a lobbying blitz this year to stem public backlash against the vast projects underpinning the AI boom.

(Bloomberg, Financial Times)

Merck Ends Talks to Buy Revolution Medicines

Merck is no longer in discussions to acquire biotech Revolution Medicines, according to sources.

(Wall Street Journal)

Other Equity Moves

China’s Eastroc Beverage has started taking orders for its Hong Kong secondary listing, planning to raise up to HK$10.14 billion ($1.3 billion). Airbus’s head warned staff the company must adapt to geopolitical risks after facing “significant” damage from US protectionism and trade tensions.

LVMH shareholders are seeking clarity on Bernard Arnault’s succession plans, saying lack of transparency is increasingly becoming a risk. Ryanair upgraded fiscal 2026 guidance on strong demand and early Boeing deliveries. Hargreaves Lansdown is cutting fees for about half its customers as UK investment platform competition heats up.

(Wall Street Journal, Reuters, Financial Times)

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