Market Report.
📈 And with another day, markets open to yet a new chapter in Trump’s favorite toy: tariffs.
🇺🇸 President Trump stated he is increasing tariffs on imported autos, pharmaceuticals, lumber, and other goods from South Korea from 15% to 25%.Trump cited a delay by the South Korean legislature in approving a trade deal reached between the U.S. and South Korea in July 2025 as the reason for the tariff hike.
🚗 The announcement caused shares of major South Korean automaker Hyundai to fall as much as 4.77% before paring losses, while shares of Hyundai’s subsidiary Kia and affiliate Hyundai Mobis also dropped significantly.
🇰🇷 South Korea is one of the biggest exporters of goods to the U.S., with the U.S. importing over $131 billion in goods from the country in 2024. The potential impact on South Korean exporters, especially the auto industry, could be substantial.
📉 South Korea’s KOSPI initially fell more than 1%, reflecting investor caution. It’s little surprise that Seoul is hesitant to commit hundreds of billions of dollars to U.S. investment when the prospect of unpredictable tariffs remains a constant feature of the Trump administration’s policy stance.
🌏 MSCI’s broad Asia‑Pacific index excluding Japan climbed 1% to a fresh record high, underscoring strong regional momentum. Even Japan’s Nikkei rose 0.7%, despite the yen hovering near its strongest level in more than two months—a move that would typically weigh on Japanese exporters.
⚖️ But remember, the U.S. Supreme Court is currently considering a case challenging the legality of Trump’s unilateral imposition of tariffs, with justices expressing skepticism about his authority to do so without Congressional approval.
⏰ The Supreme Court has postponed publication of its decision and confirmed it will not be released before the January recess. The earliest possible date now under consideration for a ruling is February 20, 2026.
🇬🇧 Prime Minister Keir Starmer’s upcoming trip to China, the first by a British PM in 8 years, comes shortly after a similar delegation by Canadian Prime Minister Mark Carney, which drew fresh tariff threats from U.S. President Donald Trump.
🗣️ Starmer dismissed suggestions that he is seeking stronger ties with China at the expense of the UK’s relationship with its closest allies, such as the U.S. He has stated that the UK will not be forced to choose between the United States and China, as he sees “significant opportunities” for British businesses in China.
🤝 Starmer likely sees opportunities for British businesses to expand into the Chinese market, which remains a major driver of global economic growth despite the geopolitical frictions. However, the UK will have to be careful not to upset its longstanding alliance with the U.S., especially as President Trump has shown a willingness to use tariffs and other trade measures to retaliate against countries he perceives as favoring China.
🛒 According to the British Retail Consortium (BRC), inflation in UK shops rose to the highest level in almost 2 years in January 2026. Prices of commonly purchased products climbed 1.5% in January from a year earlier, the fastest pace since February 2024. This is up from 0.7% in December.
💷 This indicates that retailers in the UK are grappling with higher costs, which they are passing on to consumers through price increases. The BRC data suggests that inflationary pressures remain elevated in the UK, even as the Bank of England has been raising interest rates to try to rein in price growth.
🏦 This could put further pressure on the Bank of England to continue its monetary policy tightening, potentially risking a slowdown in economic growth as higher borrowing costs impact businesses and households.
🇺🇸 U.S. equities remained resilient, with investors positioning ahead of Big Tech earnings. Apple, Meta, and Microsoft led Monday’s gains and are scheduled to report results for the previous quarter later this week, keeping market sentiment supported.
🧠 U.S. memory chipmaker Micron Technology has announced plans to build a massive $24 billion chip manufacturing facility in Singapore over the next decade. The new investment will help Micron boost output of NAND memory chips to meet surging global demand, driven by the rise of AI and data-centric applications.
🏭 The new wafer fabrication facility in Singapore will have a cleanroom space of over 700,000 square feet and is expected to begin production in the second half of 2028.
🧩 This new plant adds to Micron’s existing footprint in Singapore, where it is also building a $7 billion advanced packaging facility for high-bandwidth memory (HBM) chips used in AI applications, set to start production in 2027.
📦 Analysts note that the memory chip supply shortage could persist through late 2027, despite Micron and its rivals like Samsung and SK Hynix planning new production lines and accelerating start dates.
☁️ The strong demand for high-performance storage equipment, especially from major cloud service providers, is fueling the robust order activity and price increases.
⚠️ The prolonged memory chip shortage underscores the critical role these components play in powering the AI data center boom, as well as the broader consumer electronics industry. The memory chip situtation is expected to continue through 2026 and 2027. Most of the memory output from top players like Samsung, SK Hynix, and Micron is currently going directly to AI infrastructure, leaving other markets “starved” for supply. The memory chip shortage and resulting price increases are already impacting consumer electronics companies, who may have to consider raising prices for products like smartphones and PCs.
🤖 However, acording with CNBC, despite the popular narrative that AI investment was the savior of the U.S. economy in 2025, a recent report from MRB Partners reveals that consumption was actually the most crucial driver of GDP growth that year. MRB Partners noted that the GDP value of AI is smaller than one might expect, as a lot of the high-tech equipment is imported, and imports do not count towards GDP.
🥈 When adjusted for the real imports of AI-related equipment like computers, semiconductors, and telecom gear, the net average contribution of AI investments to GDP growth was between 40-50 basis points, or about 20-25% of real GDP growth.
🥈 The silver market appears to have entered uncharted territory, with the precious metal’s price reaching new all-time highs and outpacing even the record-setting gains in gold. The combination of industrial, monetary, and investment demand factors is driving this historic rally
🔋 Silver’s central role in the manufacture of chips and batteries, as well as its recent designation as a critical mineral by the U.S. Department of the Interior, is helping maintain the metal’s price momentum. Also, a growing demand from lower-to-middle income buyers in emerging markets like India and China is boosting the price.
🌐 As has happened with the United States, China, currently the world’s largest investor, is beginning to turn into an economy with positive capital flows from the rest of the world, but without having a global currency like the dollar, which makes it even more epic.
🌍 According to new research from the Development Finance Observatory, China has undergone a significant shift in its financial relationship with Africa over the past decade. From 2010-2014, China provided a net funding flow of $30.4 billion to African countries. However, this has now reversed, with China receiving $22.1 billion in net repayments from Africa over the past 5 years.
🧭 This represents a swing of about $52 billion in China’s position, going from being a major source of funding to becoming more of a debt collector in its dealings with African nations. This shift likely reflects growing concerns within China about the sustainability of its lending to African countries, many of whom have struggled to repay their debts.
Gepolitics.
🛡️ The United Arab Emirates said it will not allow any attack on Iran to be launched from its territory. In a statement, the UAE said it will not permit its airspace, land, or waters to be used for hostile military actions against Iran, nor will it provide logistical support for such operations.
Market View.
📈 We are back above the 7,000‑point level in S&P 500 futures, which is undoubtedly positive news. Nasdaq 100 futures are also close to reaching 26,000 points, placing US equity markets in a position to potentially extend the bullish trend.
💵 This recovery appears to be partly fuelled by the correction in the US Dollar Index (DXY), which has once again fallen below 98 points, reaching 97.25 in recent hours — a decline of more than 2.5% from Monday’s highs. As a result, EUR/USD managed to break above 1.19, although it has since pulled back to around 1.1855.
🇪🇺 In Europe, DAX 40 futures are approaching the 25,100‑point level, while Euro Stoxx 50 futures are attempting to consolidate above 6,000 points.
🛢️ The oil market continues to retreat from last Friday’s highs, with spot Brent crude trading below $64.35 per barrel.
🥇 Gold futures remain at record highs, trading just shy of the $5,100 per ounce level. Silver, which saw a remarkable opening with new all‑time highs above $117 per ounce, remains stable and biased to the upside.
₿ Bitcoin, however, continues to be one of the major disappointments of 2026, failing to regain momentum and remaining stuck around the $88,135 level.
