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 U.S. Treasury bonds gained, ending a four-day losing streak caused by concerns about persistent inflation, which could be worsened by President-elect Trump’s proposed fiscal stimulus plans. Japanese government bonds also saw an increase in value following a 30-year auction that garnered its highest demand since 2020. Asian markets declined for a second consecutive day, with an emerging market equities index nearing a correction as Trump’s threats of more trade tariffs alarmed investors. Japanese and Australian stocks led the Asian session regional decline, while U.S. futures also dropped. Chinese stocks in both the mainland and Hong Kong fell in response to data showing intensified deflationary pressures in the world’s second-largest economy. China’s consumer inflation decelerated in December, resulting in modest annual price increases for 2024, while factory-gate deflation persisted for the second consecutive year amid weak economic demand. Factors such as job insecurity, an ongoing housing slump, high debt levels, and tariff threats from the incoming U.S. administration under President-elect Donald Trump have dampened demand, even as Beijing increases stimulus efforts to rejuvenate its consumer sector.The Yen appreciated to 158 per Dollar. Japanese workers experienced their largest base wage increase in 32 years, which might encourage the central bank to raise interest rates this month. Additionally, the 30-year government bond auction in Japan on Thursday attracted strong demand due to rising rates. The December FOMC meeting minutes reaffirmed the meeting’s hawkish stance without significantly altering market views. Powell’s message about potentially slowing policy easing was reiterated, and the decision to cut rates was described as ‘finely balanced’ among participants, with some dissenting. The Committee plans a ‘careful approach’ moving forward, and some members used ‘placeholder assumptions’ regarding Trump policies for their economic projections. Additional information on the new government’s policies will be necessary to advance the policy discussion. The market anticipates a 25bp cut by mid-year.The UK government is facing fiscal challenges again, with rising gilt yields and a poor exchange rate. The Treasury emphasised that meeting fiscal rules is essential and dismissed alternative fiscal projections as speculation. Market participants are concerned about heavy gilt supply and the potential need for the government to re-establish fiscal headroom by either increasing taxes or cutting spending. Both options carry political risks and could exacerbate fears of an economic slowdown. Recent surveys indicate a decline in employment, with the REC/KPMG permanent placements index dropping into contraction territory. Today’s calendar will see the release of the Bank of England’s Decision Maker Panel, which is a survey that gathers insights from businesses regarding their expectations for the economy. This panel provides valuable information on business sentiment and can influence monetary policy decisions. Additionally, comments from the Bank of England’s Breeden are expected. These remarks could shed light on the central bank’s current stance on interest rates and economic conditions, which are crucial for investors and policymakers alike. The ECB Bulletin will also be released today. This publication offers insights into the European Central Bank’s monetary policy decisions and economic analysis, which are vital for understanding the eurozone’s economic landscape. In terms of economic data, euro area retail sales figures will be announced. These figures are key indicators of consumer spending and economic health in the eurozone, and they can significantly affect market sentiment. Stateside, US initial jobless claims data will be released, providing insights into the labour market’s health ahead of Friday’s pivotal Non Farm Paytolls data. There will also be comments from various Federal Reserve speakers. Lastly, it is a day of remembrance as the funeral of President Carter takes place, and as such, US stock markets will be closed today.
 Overnight Newswire Updates of Note

          (Sourced from reliable financial news outlets)
 FX Options Expiries For 10am New York Cut (1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

CFTC Data As Of 3/1/25

Technical & Trade ViewsSP500 Short Against 6045

EURUSD Short Against 1.0435

GBPUSD Short Against 1.2614

USDJPY Long Against 153.77

XAUUSD Short Against 2692

BTCUSD Short Against 101,960

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