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 Asian stocks and European equity futures are on the rise, following a tech-led recovery on Wall Street post a market downturn that had unsettled global markets. Investors are now shifting their focus towards the upcoming Federal Reserve interest rate decision and earnings reports from prominent US companies Tesla, Meta and Microsoft. Japanese, Australian, and Indian markets have observed gains, while many other key markets in the region are closed for the Lunar New Year holiday. US futures are holding steady as the S&P 500 climbed and the Nasdaq 100 surged 1.6% on Tuesday, with Nvidia making an impressive 8.9% recovery following its historic single-day value drop. Shares have rebounded after a turbulent start to the week, attributed to concerns surrounding the budget-friendly AI model from Chinese startup Deepseek, the potential over-investment in AI development by leading US firms in light of DeepSeek’s cost-efficient approach sparked a surge in selling. Attention turns towards the Fed’s decision and results from major tech companies starting Wednesday.In European earnings of note, ASML, the top supplier of equipment for computer chip manufacturers, unveiled on Wednesday that its fourth-quarter bookings soared to 7.088 billion euros ($7.39 billion), surpassing expectations by a significant margin, buoyed by robust demand for its advanced tools crucial in chip production for artificial intelligence. Analysts, who had projected bookings of 3.99 billion euros based on a survey by Visible Alpha, noted a notable increase from 2.63 billion euros in the third quarter of 2024. This remarkable surge is likely to instill confidence not only in ASML but also in investors of chip stocks, affirming the enduring strength of investments in chips crucial for AI applications. This positive development comes in the wake of a recent market sell-off triggered by the emergence of an efficient AI model by Chinese firm DeepSeek, which demonstrated lower computing requirements compared to its rivals.Today’s data slate includes significant updates such as rate announcements from the Bank of Canada. Furthermore, UK Chancellor Reeves is scheduled to deliver a speech on UK growth, and BoE Governor Bailey will be presenting at the Financial Stability Report (FSR) Treasury Select Committee (TSC).Stateside, the Federal Reserve is expected to maintain the current status quo and defer any updates on Trump’s ‘placeholder assumptions’ for the upcoming meeting. Building anticipation for the January Federal Open Market Committee (FOMC) meeting presents a challenge as no changes in interest rates are foreseen, and the dot plot projections are likely to remain unaltered. Envisaging substantial modifications to the FOMC statement is also challenging. The removal of references to the potential for ‘additional adjustments’ in Fed funds might be perceived as too hawkish presently. Conversely, if Powell hints at a possible rate cut in March during his press conference, it may be challenging to reconcile with the existing economic conditions. From a political perspective, it appears more prudent for the FOMC to wait until the subsequent meeting to clarify the ‘placeholder assumptions’ regarding the new administration’s policies.In terms of economic data, the labour market continues to exhibit strength, as evidenced by the recent employment component of the Consumer Confidence report. Although there was a slight deceleration in the ‘jobs plentiful minus jobs hard to get’ metric, it remains robust enough to align with readings from the latter part of 2024 and is indicative of an unemployment rate around 4.3%, marginally higher than the current 4.1% rate. A notable portion of the press conference is likely to centre on political enquiries, particularly following Trump’s recent advocacy for lower interest rates.
 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 24/1/25This summary provides an overview of the trading positions held by equity fund managers and speculators in various futures markets as of the reporting period ending January 21:1. Currencies (Net Short Positions):**– **Euro**: **-62,486** contracts (significant bearish sentiment).- **Japanese Yen**: **-14,673** contracts (moderate bearish stance).- **Swiss Franc**: **-41,837** contracts (notable bearish sentiment).- **British Pound**: **-8,257** contracts (marginal bearish positioning).2. Bitcoin (Net Long Position):**– **BTC**: **+739** contracts (mild bullish positioning in the futures market, reflecting growing optimism).3. Equities (S&P 500 CME Futures):**– **Equity Fund Managers (Long)**: Increased net long position by **+7,931 contracts** to a total of **+931,930 contracts**, signaling continued optimism.  – **Equity Fund Speculators (Short)**: Expanded net short position by **+88,671 contracts** to a total of **-399,756 contracts**, highlighting growing speculative bearish bets.4. Treasuries (CBOT Futures):****Long Positions:**- **US Treasury Bonds (30-year)**: Net long position grew by **+24,404 contracts** to **+24,456**, reflecting a more bullish outlook on long-term bonds.**Short Positions:**- **US Ultrabond (long-term Treasuries)**: Net short position decreased (trimmed) by **-12,434 contracts** to **-229,988**, indicating less bearish sentiment.  – **2-Year Treasury Futures**: Net short position trimmed by **-82,829 contracts** to **-1,174,377**, showing a reduction in bearish sentiment on short-dated bonds.  – **5-Year Treasury Futures**: Net short position increased by **+18,570 contracts** to **-1,796,191**, reflecting stronger bearish sentiment for mid-duration bonds.  – **10-Year Treasury Futures**: Net short position increased by **+12,310 contracts** to **-580,245**, indicating growing bearish sentiment for this maturity segment.**Key Takeaways:**1. **Currencies**: Persistent bearish sentiment dominates, particularly for the **euro** and **Swiss franc**, with speculative shorts significantly outweighing longs.2. **Bitcoin**: A small but positive net long position reflects a bullish tilt.3. **Equities**:     – Fund managers are steadfastly **bullish** on the S&P 500, while speculators maintain a growing **bearish stance**, signaling a potential divergence of sentiment.4. **Treasuries**:     – **Long-duration bonds** (30-year) saw increased long positions, indicating optimism in long-term fixed income.   – **Shorter and mid-duration bonds** (e.g., 5-year, 2-year) retain heavy net short positions, reflecting expectations of rising interest rates or bearish bond sentiment.  Overall, bullish interest in long bonds and equity fund managers’ sustained optimism, while speculative shorts dominate in currencies and some Treasury maturities.
 Technical & Trade ViewsSP500 Pivot 6040

EURUSD Pivot 1.0435

GBPUSD Pivot 1.2614

USDJPY Pivot 153.77

XAUUSD Pivot 2692

BTCUSD Pivot 101,960

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