Market Report.
🇩🇪 German inflation edged up to 2.1% in January. The harmonized consumer price index (HICP) — used for comparison across the European Union — had stood at 2.0% year‑on‑year in December, indicating a modest acceleration in price pressures at the start of the year.
📉 Reminder: Since the Ukraine War, its economy has been contracting for two years and is now growing at 0.3%.
📦 The EU’s trade surplus has been shrinking due to several factors. Tariffs imposed by the US have weighed on EU exports to its biggest trade partner, with exports to the US falling 12.6% year-on-year.
🇨🇳 Rising imports from China have crowded out domestic EU production, with the EU’s trade deficit with China increasing by around 15% in 2025.
📉 The loss of US markets will take years for the EU to regain, leaving a large gap in the economy as net exports have been a key driver of growth.
🏗️ A fiscal boost in Germany, including increased defense and infrastructure spending, is expected to lift growth further, especially in the second half of 2026.
🌏 Australia joins the club of economies like Japan that are opting for rate hikes, while countries such as the UK are considering cut hikes.
🏦 The Reserve Bank of Australia’s (RBA) concluded that inflation would remain stubbornly high if it had not hiked interest rates as it did this month. However, the central bank is not yet sure if further tightening will be necessary.
📈 The RBA raised the cash rate by 25 basis points to 3.85% in February, reversing one of the three cuts made in 2025. The central bank is forecasting core inflation to remain elevated at 3.7% by mid-year and 3.2% by the end of 2026, well above its 2-3% target range.
💱 The recent rise in the Australian dollar could tighten financial conditions a little, but the board sees this as partly in anticipation of higher interest rates.
🇬🇧 Meanwhile, according to the Reuters poll, the majority of economists (over 60%) expect the Bank of England to cut the Bank Rate by 25 basis points to 3.50% at its March 19th meeting.
📊 There is less certainty around the timing of a second rate cut, with economists split between expecting it in Q2 or later in the year. The median forecast shows the Bank Rate reaching 3.25% by the end of 2026, but the forecasts range from 3.00% to 3.75%.
📉 January inflation data is expected to have slowed to 3.0%, but the BoE’s chief economist has warned that underlying inflation remains elevated around 2.5%. The UK economy is expected to grow 1.0% this year and 1.4% next year, largely unchanged from the previous poll.
🇯🇵 Japan’s economy grew 0.1% in Q4 2025 compared to the previous quarter, narrowly avoiding a technical recession. The 0.1% quarter-on-quarter and year-on-year growth brought the economy back to expansion, but missed expectations of a 0.4% expansion.
📉 On an annualized basis, output rose 0.2%, much slower than the expected 1.6% growth. The data comes as Japan works with the U.S. on a $550 billion investment pledge under their trade deal, though they have yet to finalize the initial projects.
🏛️ Japan’s new Prime Minister Sanae Takaichi has pledged to support economic growth through “proactive” fiscal policy, including suspending food taxes and boosting defense spending.
🚢 The defense could be a major catalyst driving Japanese equities higher, with potential announcements involving Japanese and U.S. companies in areas like industrialization and shipbuilding.
🌐 A “mega anti-Trump trade alliance”:
🤝 The European Union and the 12-member Indo-Pacific trade bloc CPTPP (Comprehensive and Progressive Agreement for Trans-Pacific Partnership) are in early-stage talks to explore forming a potentially large global economic alliance.
🇨🇦 The talks are being politically driven by Canadian Prime Minister Mark Carney, who is seen as spearheading the discussions. The initial focus is on building a “bridge” between the EU and CPTPP by aligning rules of origin to allow for greater supply chain integration and the seamless movement of goods and parts.
⚖️ This is framed as a push by “middle powers” to resist trade coercion and conflicts, especially from the U.S. under the Trump administration.
🇨🇳 China’s Belt and Road initiative is evolving and adapting, making it harder for the U.S. and its partners to counter. The Belt and Road program is not in retreat, as many have predicted. Instead, it is shifting from financing mega-projects to becoming a long-term development partner, particularly for fast-growing economies in the Global South.
📈 The latest data shows engagement reached a record high in 2025, with $128 billion in construction contracts and $85 billion in investments, increasingly focused on sectors like renewable energy, battery supply chains, and industrial manufacturing.
🌍 Africa has emerged as a top destination for Belt and Road investment, with China pairing this with expanded trade access, making it difficult for countries to ignore. Accroding to Bloomberg, this new, more targeted and strategic phase of the Belt and Road signals China’s confidence at a time of trade friction with the U.S. and growing wariness over its ambitions.
🧭 The U.S. and its partners should focus on offering a genuine partnership to nations in the Global South, while concentrating on strategic sectors like critical minerals, digital infrastructure, and energy systems.
🏢 And as for corporate news, trust me, you won’t believe this.
🤖 Meta has patented an AI system that can run a deceased person’s social media account, continuing to post, message, and even video call on their behalf.
📜 The patent, granted in December 2025, describes a system that uses a Large Language Model (LLM) to create a “digital clone” of a user based on their past online behavior and data.
🧠 Meta’s official reasoning in the patent document is that this technology could “soften” the loss and impact of a user’s permanent absence (death) on their friends and loved ones.
🚫 However, Meta has since clarified that they have “no plans to move forward” with implementing this technology, stating that companies often patent “wild” ideas just to protect the intellectual property. The patent lists Meta CTO Andrew Bosworth as a primary author, suggesting this was a serious proposal within the company.
Geopolitics.
🇩🇰 Danish Prime Minister Mette Frederiksen is now weighing calling a snap election to capitalize on the political momentum she has gained from her standoff with the Trump administration over Greenland.
🎯 Trump’s revival of tensions over the Arctic territory has shifted the political spotlight in Denmark towards foreign policy and leadership, which is playing to Frederiksen’s strengths. Frederiksen is now being seen as a steady, competent leader confronting an erratic superpower, with the backing of the rest of Europe. This has boosted her public support.
🗳️ Frederiksen can call a snap election in Denmark anytime before the scheduled deadline of October 31st, and she is now considering doing so to capitalize on this newfound political momentum.
🇺🇸 Marco Rubio delivered a speech during his visit to Munich, striking a notably more positive tone than that seen during JD Vance’s visit to Europe last year. His remarks conveyed a message of renewed cooperation and strategic alignment between the United States and Europe.
⚔️ At the same time, Rubio applied measured pressure on European partners. He criticised what he described as uncontrolled migration, arguing that it poses a threat to Europe’s cultural foundations, and reiterated that European nations must increase their own military commitments within the transatlantic alliance, rather than relying disproportionately on the United States.
🕵️ Were they all part of the same globalist club?:
📧 Jeffrey Epstein used his connections to the World Economic Forum (WEF) to broker elite meetings and leverage his influence. Epstein described himself as a “Davos concierge,” offering to help his contacts navigate the WEF annual meeting and secure meetings with billionaires and government officials.
📨 Emails show Epstein assisting his friend Boris Nikolic in trying to meet with Bill Gates at Davos, and connecting Emirati billionaire Sultan Ahmed bin Sulayem with former EU Commissioner Peter Mandelson. Epstein also arranged meetings at Davos in 2010 between then-JP Morgan executive Jes Staley and UK officials like Chancellor Alistair Darling.
✍️ In 2014, Epstein asked former US Treasury Secretary Larry Summers to write a recommendation for a young woman to be named a WEF Global Leader of Tomorrow.
🆔 Germany becomes the third country after UK and Spain to establish digital DNI for social media access. I know what you think, governments want to control their citizens’ opinions and actions online, but no, it’s “for the sake of the childrens”.
📱 The co-governing Social Democratic Party (SPD) has thrown its weight behind a proposal from Chancellor Merz’s conservative party to limit social media services for those under 16 years old. And how do they know who is under 16? By asking all users for their ID. Adults or children, no more anonymity.
🤝 The move is seen as setting the stage for a new showdown with major U.S. tech companies, ahead of Chancellor Merz’s planned visit to Washington to meet with President Trump.
🇮🇷 Iran’s Foreign Minister Abbas Araghchi is set to meet with the head of the UN nuclear watchdog, Rafael Grossi, ahead of a second round of indirect talks with the US: Araghchi said the meeting with Grossi on Monday were “deep technical” discussions, ahead of the talks with the US on Tuesday.
🇺🇸 The US delegation is expected to be led by President Trump’s son-in-law Jared Kushner and special envoy Steve Witkoff.
☢️ The first round of talks in Muscat got off to a “good start,” with discussions limited to nuclear issues per Iran’s condition. However, the US and Israel want the talks to also cover Iran’s missile program and regional influence.
⚠️ Israel’s PM Netanyahu has proposed terms that Iran should not possess enriched material or nuclear enrichment capabilities. The US is pressuring Iran to reach an agreement to roll back its nuclear ambitions, threatening a “very traumatic” situation if a deal is not reached, which could take up to a month.
🕊️ Upcoming peace talks between Russia and Ukraine in Genev. The talks are being mediated by the United States, following two previous rounds in Abu Dhabi.
🗺️ The main sticking point remains the issue of land, with Russia demanding that Ukraine cede the remaining 20% of the Donetsk region that Russia has failed to capture – something Ukraine refuses to do.
🤝 The US will be represented by envoys Steve Witkoff and Jared Kushner, who are also attending talks in Geneva this week with Iran.
Market View.
📊 Equity markets have returned to the downside.
📉 E‑mini S&P 500 futures have fallen back below the 6,850‑point level, currently trading around 6,830 points. Nasdaq 100 futures are also weakening, slipping to approximately 24,655 points.
💵 The US Dollar Index (DXY) has moved back above 97 and continues to strengthen modestly. As a result, EUR/USD has retreated to around 1.1831.
🇪🇺 In Europe, markets are also under pressure. DAX 40 futures have definitively lost the 25,000‑point level, now trading near 24,785 points. Meanwhile, Euro Stoxx 50 futures have fallen below 6,000 points, currently standing at 5,972 points.
🛢️ The oil market saw some gains during yesterday’s session but remains within levels similar to recent weeks, with spot Brent crude trading around $68.15 per barrel.
🥇 Gold futures have slipped below the $5,000 per ounce mark, currently trading near $4,940 per ounce.
₿ Finally, Bitcoin remains relatively static, hovering around the $68,410 level.
