Daily Market Roundup

North America News

US Markets Closed for Presidents’ Day

The US stock and bond markets are closed today in observance of Presidents’ Day, resulting in a quiet trading session globally. However, the forex market remains open, and several Fed officials are scheduled to speak throughout the day.

📅 Fed Speakers Today:

• 9:30 AM ET: Philly Fed President Patrick Harker (Bahamas – Global Interdependence Center event)
• 10:20 AM ET: Fed Governor Michelle Bowman (American Bankers Association’s Community Bankers Conference)
• 6:00 PM ET: Fed Governor Christopher Waller (Australia – UNSW Macroeconomic Workshop)

Despite the holiday, markets will still be watching for any policy signals from Fed officials.

Trump Reportedly Seeks $500B Economic Deal from Ukraine

A leaked draft agreement suggests that U.S. President Donald Trump is pressing Ukraine for a $500 billion economic deal in exchange for continued American support. The proposal reportedly includes U.S. control over key Ukrainian industries such as oil, gas, minerals, and infrastructure. Under the terms of the agreement, half of Ukraine’s resource revenues and future licensing rights would be allocated to the U.S., with Washington given priority access to exports.

Ukraine’s Response and Strategic Implications

The proposal has sparked alarm in Kyiv, with officials likening the demands to historical war reparations. While Ukraine has shown openness to deals involving rare earth minerals, the broad economic terms in Trump’s proposal have taken many by surprise. Trump has framed the deal as a necessary repayment for U.S. aid, which he claims has totaled $300 billion—though official figures suggest a lower figure of $175 billion, much of which was spent domestically.

The move is seen by some as a strategy to justify further American involvement by portraying Ukraine as an economic asset rather than a financial burden. However, concerns remain over Ukraine’s ability to comply, given its ongoing conflict with Russia and economic challenges. With limited options, President Volodymyr Zelensky may face a difficult choice between aligning more closely with Washington’s economic demands or risking reduced military support against Russian aggression.

FOMC Meeting Minutes Set for Wednesday

The Federal Reserve will release its January meeting minutes on Wednesday at 2 PM ET.

💬 Key Points to Watch:

• The Fed held rates steady at 4.25-4.50%, but removed language suggesting inflation was on track to 2%.
• Powell reiterated that the Fed is in no rush to cut rates, though markets are still pricing in cuts later in 2025.
• The minutes won’t reflect recent strong jobs data and hot CPI/PPI prints, which may further impact future rate decisions.

Market participants will be looking for any hints on when the first rate cut might come, with expectations now pointing to October 2025.

Fed Officials Maintain Cautious Stance on Rate Cuts

Fed Harker & Bowman:

• Harker: Current economy supports keeping rates steady for now.
• Bowman: Inflation is declining, but upside risks remain.

Key Takeaways:

• Labor market remains balanced.
• Fed is unsure about the impact of new US policies on inflation.
• Rate cuts unlikely until the Fed gains more confidence in lower inflation.

Markets will monitor Wednesday’s FOMC minutes for further guidance on rate policy.

BoA Survey: US Dollar Expected to Peak in Q1 2025

Bank of America’s latest FX and interest rate sentiment survey suggests that the USD is likely to top out in Q1 2025, driven by:

📉 Key Market Drivers:

• Slowing US economic growth.
• Doubts over continued US economic “exceptionalism.”
• Crowded long USD positioning.
• Narrowing rate differentials favoring other currencies.

With investors showing less conviction for USD strength moving forward, the dollar’s dominance may face challenges as the year progresses.

Trump-Musk DOGE Service Reportedly Seeking IRS Access to Taxpayer Data

Reports have emerged that Trump and Elon Musk’s DOGE payment platform is attempting to gain access to confidential IRS taxpayer data, sparking concerns within the tax agency.

What’s Happening?

• The DOGE Service is allegedly pressuring the IRS to sign a memorandum of understanding, which would grant it access to tax records, property holdings, and other sensitive financial data.
• The White House is reportedly involved, adding further urgency to the IRS’s decision.

If true, this could lead to significant regulatory and privacy concerns, as taxpayer financial records are among the most highly protected data sets in the US.

The report comes via the Washington Post (gated)

Trump’s Economic Director Holding Regular Meetings with Fed Chair Powell

Kevin Hassett, Director of the National Economic Council under President Trump, has revealed that he is regularly meeting with Federal Reserve Chair Jerome Powell.

Key Takeaways:

• Hassett denied that these meetings were meant to influence interest rate policy, stressing that the Fed’s independence is respected.
• He noted that long-term Treasury yields have fallen by 40 basis points, which he attributes to market expectations of lower inflation.
• While the Fed remains on a restrictive path, ongoing discussions between the White House and the central bank could signal an increased focus on economic coordination.

With monetary policy playing a key role in Trump’s economic agenda, these meetings could impact market sentiment and expectations for Fed rate decisions in 2025.

Canada’s Housing Starts Weaker Than Expected

January Housing Starts: 239.7K vs. 252.5K expected

• Urban housing starts: ↑ 3% to 220,643 units
• Rural housing starts: 19,096 units
• 6-month avg trend: ↓ 2.5% to 236,892 units

Regional Breakdown:

• Montreal: +112% YoY (multi-unit surge)
• Vancouver: +37% YoY
• Toronto: -41% YoY (multi-unit decline)

The weaker-than-expected housing starts suggest higher borrowing costs are slowing construction activity.

Canadian Securities Data: Foreign Investors Increase Exposure

📊 December Transactions:

• Foreign investors bought C$14.37B of Canadian securities (prev. C$13.84B).
• Canadian investors bought C$3.77B of foreign securities (down from C$17.65B).
• Net inflow into Canada: C$10.6B, bringing 2024’s total inflows to C$81.1B.

Foreign demand for Canadian debt remains strong, reflecting attractive yields relative to global alternatives.

Commodities News

Gold Edges Higher Amid US Holiday, Low Volatility

Gold prices gained 0.56% on Monday, trading at $2,898, as thin liquidity from the US Presidents’ Day holiday kept volatility subdued. Despite Friday’s steep decline—the biggest since December—gold’s long-term outlook remains favorable, supported by geopolitical uncertainties and US trade policies aimed at reducing the trade deficit.

Fed Outlook and Market Expectations

Federal Reserve officials have maintained a cautious stance, with Philadelphia Fed President Patrick Harker stating that monetary policy remains appropriately restrictive while inflation is still above target. Fed Governor Michelle Bowman echoed similar sentiments, acknowledging that while inflation is expected to decline, risks remain on the upside.

Investors are now looking ahead to key economic releases this week, including the FOMC Meeting Minutes, housing data, initial jobless claims, and S&P Global Flash PMIs for February.

Central Bank Buying Supports Gold Prices

Gold demand continues to be bolstered by central banks, with the World Gold Council reporting that global central banks purchased over 1,000 tonnes of gold for the third consecutive year in 2024. Following Trump’s electoral victory, central bank purchases surged 54% year-over-year to 333 tonnes.

Meanwhile, money markets are pricing in 43 basis points of Federal Reserve rate cuts in 2025, which could further support gold prices in the medium term.

Oil Prices Steady Above $70 as Market Awaits Russia-Ukraine Peace Talks

West Texas Intermediate (WTI) crude oil futures held above $70.00 on Monday as traders assessed the potential impact of Russia-Ukraine peace talks. Market sentiment remains cautious following reports that US President Donald Trump is set to hold discussions with Russian President Vladimir Putin in an effort to broker a ceasefire.

Market Reactions to Potential Truce

Trump confirmed last week that both Russian and Ukrainian leaders have agreed to negotiations, describing his talks with Putin as “highly productive.” The possibility of a resolution could lead to an influx of Russian oil into global markets, which Philip Nova analysts warn could weigh on oil prices in the near term.

OPEC+ Supply Decisions Provide Temporary Support

In contrast, reports from Bloomberg suggest that OPEC+ is considering postponing its planned oil supply increases, originally set for April. The delay could help offset some of the downside pressure on prices, providing a temporary floor for WTI.

This decision runs counter to Trump’s recent request to Saudi Arabia to boost oil output by two million barrels per day, a move he has argued would help ease global inflationary pressures.

European Gas Prices Remain Elevated Despite Weekly Decline

European natural gas prices dropped over 9% last week—their largest weekly decline since early January—but remain high, with the TTF benchmark still above EUR 50/MWh, according to ING analysts Warren Patterson and Ewa Manthey.

Russia-Ukraine Negotiations Weigh on Sentiment

Ongoing diplomatic efforts between Russia and the US to reach a Russia-Ukraine peace deal have added pressure to gas prices, as markets factor in the potential for easing supply concerns.

Additionally, discussions continue around storage refill targets, with uncertainty over whether Germany will subsidize storage refills and how such a program would be implemented.

Storage Levels and Weather Conditions in Focus

Storage levels in Europe remain a key concern, having fallen to just under 45% capacity, compared to the five-year average of 54%. The recent cold snap has accelerated withdrawals, and analysts expect stronger storage draws to continue in the coming days before temperatures moderate later in the week.

If the trend in flattening summer-to-winter price spreads persists, the likelihood of new storage subsidies could decline, potentially leading to further price volatility in the months ahead.

OPEC+ Weighs Delaying April Oil Supply Increase

OPEC+ is reportedly considering delaying its planned 120,000 bpd production increase in April, citing a “fragile” oil market.

🛢 Key Takeaways:

• No final decision has been made, with some members divided on how to proceed.
• If delayed, this would mark the fourth postponement of the supply increase.
• A final decision may not come for several weeks.

This news briefly lifted oil prices, but subsequent denials from Russia’s Novak sent crude lower again, with WTI falling back to $70.67 after briefly touching $71.17.

Europe News

German DAX Hits Record High as European Stocks Rally

European markets opened the trading week on a strong note, with Germany’s DAX reaching a fresh all-time high. Italy’s FTSE MIB also posted significant gains, while France’s CAC 40 and Spain’s Ibex 35 achieved their highest closing levels in months.

Closing Index Performance:

• DAX: +1.26% (record high)
• FTSE MIB (Italy): +0.92% (best level since 2007)
• FTSE 100 (UK): +0.41%
• CAC 40 (France): +0.03% (highest since May 2024)
• Ibex 35 (Spain): +0.47% (best since June 2008)

Investor sentiment remains positive as markets assess geopolitical risks and economic policy shifts across the region.

Eurozone Trade Balance Narrows in December

The Eurozone’s trade surplus narrowed to €15.5 billion in December, down from €16.4 billion prior, as per Eurostat’s latest report.

📊 Key Figures:

• December trade balance (unadjusted): €15.5B vs. €16.4B prior
• Seasonally adjusted trade balance: €14.6B

2024 was the first full year of normalized trade conditions in Europe after the Russia-Ukraine crisis disrupted supply chains in early 2023. However, trade momentum remains mixed heading into 2025.

Swiss National Bank (SNB) Sight Deposits Decline Further

The Swiss National Bank (SNB) reported a decline in total sight deposits for the week ending February 14, dropping from CHF 438.1 billion to CHF 432.5 billion.

📉 Key Breakdown:

• Total sight deposits: CHF 432.5B vs. CHF 438.1B prior
• Domestic sight deposits: CHF 424.4B vs. CHF 428.1B prior

The continued reduction in sight deposits suggests the SNB may still be managing excess liquidity, which could impact Swiss franc movements and interest rate expectations.

ECB Holzmann: There is some probability of the March rate cut

ECBs Holzmann:

• There is some probability of a March rate cut
• He adds that decisions in favor of more cuts getting harder

France’s Finance Minister on EU Defense Spending

France’s Finance Minister Lombard:

• France is “doing its job” on defense spending.
• Other EU countries should contribute more equally.

Germany’s Finance Minister:

• Complying with NATO budget requirements is doable but may require temporary borrowing.

This highlights growing pressure on EU nations to boost military spending amid geopolitical tensions.

BOE’s Bailey: Gradual Disinflation Continues

Bank of England (BOE) Governor Andrew Bailey reiterated that the UK economy is still experiencing gradual disinflation, though he noted that the impact of US tariffs on inflation remains uncertain.

💬 Key Remarks:

• “The economic context is not really supporting the view that we will get more inflation persistence.”
• Impact of US tariffs on inflation is “ambiguous,” but their effect on growth is clearer.

Bailey’s comments remain largely unchanged from prior statements, reinforcing the BOE’s patient stance on monetary policy.

HSBC Sees Further ECB Rate Cuts as Growth Concerns Mount

HSBC analysts are interpreting recent European Central Bank (ECB) communications as increasingly dovish, suggesting that more rate cuts are on the horizon.

Key Insights:

• The ECB is focusing more on downside risks to growth and inflation, reinforcing expectations of continued monetary easing.
• With slower economic growth and inflationary pressures easing, bond yields have dropped, reducing the attractiveness of German Bunds and other fixed-income assets.
• Market sentiment is shifting toward expecting further ECB policy support in 2025, possibly earlier than previously anticipated.

This dovish shift could put additional pressure on the euro, while risk assets may benefit from a more accommodative stance.

UK Businesses Brace for Major Job Cuts Amid Payroll Tax Hikes

UK businesses are preparing for the largest wave of job cuts in a decade, as upcoming payroll tax increases push firms to slash costs.

Key Findings:

• A survey by the Chartered Institute of Personnel Development (CIPD) and the Federation of Small Businesses (FSB) found that:
  • Half of employers expect rising costs due to the tax hikes.
  • One-third of businesses are considering reducing staff.
  • Small business confidence is at its lowest level in five years.
• Finance Minister Rachel Reeves defended the tax increases, calling them necessary for public finance stability, but concerns remain over their impact on employment and economic growth.

Despite a slight 0.1% growth in the UK economy in late 2024, the Bank of England cut its 2025 growth forecast to 0.75%, adding to recession fears.

UK PM Starmer: Ukraine’s Future is Critical for Europe’s Security

UK Prime Minister Keir Starmer has emphasized that Ukraine’s sovereignty is a defining issue for European security. Speaking at a high-level meeting, Starmer urged European allies to step up support, stating that the burden of defense must be shared more equitably.

Key Statements from European Leaders:

• Danish PM: Called for greater military preparedness and warned against the spread of conflict beyond Ukraine.
• Polish PM: Noted that transatlantic relations are entering a new phase, requiring Europe to strengthen its own defense capabilities.
• French & German Ministers: Agreed that NATO commitments must be met but cautioned that any additional military spending should be balanced with long-term fiscal stability.

As European leaders debate their next moves, there is growing consensus that a stronger regional defense strategy is necessary, particularly as concerns over a prolonged war and Russian aggression continue to mount.

UK Culls 64,000 Birds Amid Suspected Bird Flu Outbreak

The UK government has confirmed a suspected bird flu case at a commercial poultry farm in Northern Ireland, leading to a mass cull of 64,000 birds.

Immediate Actions Taken:

• A Temporary Control Zone (TCZ) has been established to prevent further spread.
• Authorities are monitoring poultry farms across the UK for potential additional outbreaks.

This could impact poultry supply and prices, while GBP traders should remain cautious about potential economic effects.

Info via Sky

Asia-Pacific & World News

China’s NPC Standing Committee to Convene Next Week

China’s National People’s Congress (NPC) Standing Committee will hold its 14th session on February 24-25, according to state media Xinhua.

What to Watch:

• This bi-monthly meeting typically addresses policy and legislative issues, but no details have been provided yet.
• The more significant NPC “Two Sessions” annual meeting is scheduled for March, which will be closely monitored for China’s economic and fiscal policy updates.

Goldman Sachs has raised its 12-month forecasts for key Chinese stock indices

• Targets – MSCI China index from 75 to 85 and the CSI 300 index from 4,600 to 4,700

Goldman Sachs has raised its 12-month forecast for key Chinese stock indices, reflecting growing optimism about China’s economic outlook.

The investment bank increased its target for the MSCI China index from 75 to 85 and for the CSI 300 index from 4,600 to 4,700.

This upward revision signals confidence in a potential recovery in Chinese markets, driven by expectations of policy support, improving economic data, and stronger corporate earnings. GS specifically cite AI adoption, saying it could boost earnings growth and potentially bring in US$200 billion of inflows.

The move comes amid a challenging global environment, but Goldman Sachs appears optimistic that China’s market fundamentals will strengthen over the next year, attracting investors seeking growth opportunities in the region.

PBOC sets USD/ CNY reference rate for today at 7.1702 (vs. estimate at 7.2617)

• PBOC CNY reference rate setting for the trading session ahead.
• People’s Bank of China injects 190.5bn yuan via 7-day reverse repos at 1.5%, an unchanged rate.

China’s Xi attended a symposium on private enterprises

• Xi spoke at the event – not a lot of detail around

The Global Times, a Chinese state tabloid media outlet, with the report.

Says Xi attended a symposium on private enterprises on Monday and delivered a speech.

The Global Times says Xi Jinping is

• general secretary of the Communist Party of China Central Committee
• Chinese president
• chairman of the Central Military Commission

PBOC gov on Sunday – market will continue decisive role in deciding the yuan exchange rate

• People’s Bank of China governor Pan Gongsheng

China’s central bank governor, Pan Gongsheng, spoke on Sunday at the AlUla Conference for Emerging Market Economies in Saudi Arabia:

• will continue to let the market play a decisive role in deciding the yuan exchange rate.
• emphasized that a stable yuan is crucial for global financial and economic stability
• highlighted that while many currencies have depreciated against a stronger US dollar, the yuan has remained stable despite market volatility
• noted China’s focus on boosting domestic consumption through policies such as raising household incomes and offering subsidies.
• China will implement a proactive fiscal policy and an accommodative monetary policy, with stronger counter-cyclical adjustments to support the economy

Taiwan is considering a $7 – $10 billion arms purchase from the US

Reuters is reporting that Taiwan is considering a $7– $10 billion arms purchase from the US.

In the Trump administration, the theme so far is defense is available for sale, not just given away to maintain democracy.

US-Russia Talks & Ukraine Negotiations Ongoing

Russia’s Foreign Policy Aide Ushakov:

• US & Russia discussions have been “businesslike.”
• No agreement yet on how to start Ukraine peace talks.
• US has yet to appoint a chief negotiator.

Markets should prepare for headline-driven volatility, as geopolitical risks could impact commodity and FX markets.

Ukraine talks between US and Russian officials in Saudi Arabia expected on Tuesday

• Russian media reporting

Headline comes via Russian media, Kommersant. 

• Talks on Ukraine
• A US and Russian delegations
• expected in Saudi capital Riyadh

Reserve Bank of Australia (RBA) Expected to Cut Rates by 25bps

The RBA is set to announce its interest rate decision Tuesday morning (10:30 PM ET today), with markets pricing in an 85% chance of a 25bps cut to 4.10% and a 15% chance of holding at 4.35%.

📉 Why a Cut is Expected?

• Inflation is cooling: Q4 headline CPI fell to 2.4% YoY (prev. 2.8%), and Trimmed Mean CPI eased to 3.2% YoY (prev. 3.5%).
• Governor Bullock emphasized all options remain open, but softer economic data supports easing.

Should the RBA cut rates, the Australian dollar (AUD) may weaken, and investors will watch for forward guidance on potential future cuts.

Nomura Predicts a “Hawkish Rate Cut” from the Reserve Bank of Australia

The Reserve Bank of Australia (RBA) meets on February 17-18, with a statement expected at 2:30 PM local time on the 18th.

Nomura’s Outlook:

• A 25-basis-point rate cut is expected, but the RBA will maintain a cautious tone.
• Further rate cuts in April are unlikely, with future policy decisions dependent on inflation trends.
• RBA Governor Michele Bullock will hold a press conference after the decision, potentially influencing market sentiment and the Australian dollar’s movement.

With inflation showing signs of moderation, the RBA is expected to acknowledge “welcome progress” while keeping future policy options open.

Reserve Bank of New Zealand (RBNZ) Expected to Cut by 50bps

The RBNZ meets Wednesday, and markets expect a 50bps cut to 3.75%, with a 68% chance of this move and a 32% chance of a smaller 25bps cut.

📉 Why a 50bps Cut?

• Three consecutive cuts already (25bps, 50bps, 50bps) in prior meetings.
• Inflation is easing, and economic growth remains subdued.
• Updated forecasts show the Official Cash Rate (OCR) at 4.07% by March (previously 4.62%) and 3.55% by December 2025.

The NZIER Shadow Board supports a 50bps cut, but some members caution against aggressive easing due to US fiscal policies and a weaker NZD.

New Zealand’s RBNZ Shadow Board Calls for a 50bp Rate Cut

The New Zealand Institute of Economic Research (NZIER) Shadow Board has recommended that the Reserve Bank of New Zealand (RBNZ) cut rates by 50 basis points to 3.75% at its February 19 meeting.

Rationale for the Cut:

• Annual inflation is now within the RBNZ’s 1-3% target band.
• Economic activity and labor market remain weak.
• Concerns over the impact of US fiscal and trade policies on inflation.

While the Shadow Board does not predict official RBNZ actions, its recommendations signal that monetary policy easing is likely on the horizon.

New Zealand’s Services PMI Returns to Expansion at 50.4

New Zealand’s BusinessNZ Performance of Services Index (PSI) rose to 50.4 in January, returning to expansion for the first time in 10 months.

📊 Sector Breakdown:

• New Orders/Business: Highest since February 2024.
• Sales Activity: Best reading since March 2023.
• Employment and Supplier Deliveries: Still in contraction.

While the latest increase is positive, BNZ’s Senior Economist Doug Steel emphasized that the index signals stabilization rather than strong growth.

Japan’s Q4 GDP Surges, Yen Strengthens

Japan’s Q4 GDP growth came in at an annualized 2.8%, well above expectations (1.0%), driving a sharp yen rally.

Key GDP Highlights:

• Private consumption: +0.1% q/q (expected -0.3%).
• External demand contribution: +0.7 percentage points (vs. +0.4% expected).
• Capital expenditure: +0.5% q/q, but below expectations (+1.0%).
• GDP Deflator: +2.8% y/y, signaling continued inflationary pressures.

With above-target inflation and stronger growth, speculation could rise that the Bank of Japan (BOJ) may move toward tightening policy sooner than expected.

Japan economy minister Akazawa is wary about the strong GDP result.

Japan economy minister Akazawa on GDP:

• Expect economy to continue making modest recovery
• Need to be mindful of overseas economic downside risk including China and impact from US policy
• Need to be mindful that rising prices of food and other daily products may dampen consumer sentiment and slow consumption
• Government will implement thorough measures to counter rising prices

Japan chief cabinet secretary Hayashi warns on becoming target of Trump tariffs

• Otherwise bullish on Japan’s economy

Japan chief cabinet secretary Hayashi on the data and tariffs:

• Japan faces significant challenges if its companies become targets amid Trump’s policies; the government will respond carefully to potential impacts
• exports, particularly in services, demonstrated growth, counterbalancing the decline in domestic demand, while the year’s value rose by 2.9% year-on-year, exceeding 609.3 trillion yen for the first time
• domestic demand showed positive trends over the past three and a third quarters, despite personal consumption experiencing negative growth due to reduced disaster-related storage needs and a decline in beverage demand
• domestic demand is increasing, primarily driven by equipment investment, despite the impact of a stock market crash and pauses in production and delivery by some automakers
• looking ahead, continued improvement in employment and income is expected to support economic recovery

Japan December 2024 Industrial Production -0.2% m/m (preliminary +0.3% m/m, prior -2.2%)

Tertiary Industry Activity Index improved

Japan December 2024 Industrial Production is not encouraging:

-0.2% m/m

• preliminary +0.3% m/m, prior -2.2%

-1.6% y/y

• prelim was -1.1%
• prior -2.7%

Capacity Utilization -0.2% m/m

• prior -1.9%

Also out is Japan Tertiary Industry Activity Index for December

+0.10%

• expected: 0.20, prior -1.20

BoJ likely to raise rates as early as May if Shunto wage talk results as strong as 2024

• BoJ forecast of a hike in May and October in 2025 and an additional hike in 2026.

ING tipping an earlier BoJ rate hike:

• Today’s results are better than the BoJ’s current GDP forecast (0.6% YoY for FY24 GDP).
• On the inflation front, headline prices are expected to jump to 4.0% YoY in January and remain at a high level of 3% for some time.
• According to a local news report, the outcome of Spring wage negotiations is likely to be as strong as last year.
• However, the main risk to our call is US President Trump’s tariff policy. Tougher-than-expected reciprocal tariffs on Japanese goods could complicate the BoJ’s growth outlook.
• But, in our view, the BoJ’s policy priority in the near term should be to contain excessive inflation. Thus, we maintain our BoJ forecast of a hike in May and October in 2025 and an additional hike in 2026.

Singapore non-oil domestic exports (NODX) -2.1% in January (vs. -1.1% expected, prior +9%)

• NODX -2.1% y/y in January 2025

Singapore’s non-oil domestic exports (NODX) dropped by 2.1% y/y in January compared to the previous year, exceeding the forecasted 1.1% decline and reversing December’s 9% growth.

• The fall was primarily driven by a decrease in non-electronic exports.
• Exports to Hong Kong, the US, and Taiwan rose, while those to China, the EU, and Indonesia declined.

Crypto Market Pulse

Ethereum Leads Crypto Market with $1.1B in Stablecoin Inflows

Ethereum (ETH) outperformed other major cryptocurrencies over the past week, buoyed by $1.1 billion in stablecoin inflows and increased institutional interest in Ethereum ETFs. While Solana and Avalanche saw outflows, Ethereum’s ecosystem attracted fresh capital, positioning it for further gains.

Institutional Momentum Driving Ethereum’s Strength

• ETH ETFs: Have accumulated 145,000 ETH in February, seven times their total inflows in January.
• Price Action: ETH has climbed 3% this week, while Bitcoin and Solana posted losses.
• Technical Challenges: ETH has faced six rejections near the $2,850 level in recent weeks, preventing a sustained breakout.

Despite resistance, Ethereum’s strong inflows suggest continued investor confidence, potentially setting up a test of the $2,850 resistance level in the near term.

Solana Drops 9% as XRP and Dogecoin Steal ETF Spotlight

Solana (SOL) experienced a sharp decline, falling as low as $180 on Monday as traders pivoted toward XRP and Dogecoin following the U.S. SEC’s acknowledgment of their ETF filings. The news triggered an influx of speculative bets on XRP and DOGE, pulling liquidity away from other altcoins like SOL and Litecoin.

Bearish Momentum in Solana’s Derivatives Market

SOL’s price decline has been exacerbated by bearish activity in the derivatives market, with over $400 million in short positions vastly outpacing $138 million in long positions. This imbalance signals further downside risks, as technical indicators point to ongoing selling pressure.

Technical Levels to Watch:

• Resistance at $212.09 (50-day SMA) and $216.70 (21-day SMA)
• Support at $175 if the downtrend continues

Unless buying momentum shifts, Solana remains vulnerable to further losses amid the shifting ETF narrative.

Shiba Inu Whale Transactions Plunge 88% Amid Price Stagnation

Shiba Inu (SHIB) has been trading within a tight range around $0.000016 over the past two weeks, struggling to break higher. On-chain data reveals that whale investors have significantly reduced their exposure to SHIB, with the average transaction size plummeting by 88% since February 3.

Key Market Signals:

• Consolidation Phase: SHIB has been stuck in a narrow range between $0.000015 and $0.000017.
• Whale Activity Decline: Average transaction size has dropped from $39,000 to $4,707, indicating reduced large-scale interest.
• Technical Risks: The Relative Strength Index (RSI) at 45 suggests a neutral-to-bearish trend, while moving averages indicate further downside potential.

SHIB needs renewed whale demand or a broader meme coin rally to regain momentum. If selling pressure continues, a break below $0.000015 could trigger additional declines.

Anonymous Trader Burns $1.6M in ETH, Accuses Firm of Mind Control

In a bizarre turn of events, an anonymous Ethereum user known as Hu Lezhi burned 603 ETH ($1.6M) on Monday while accusing executives at Kuande Investments of using “brain-computer weapons” to manipulate employees. The transaction, which was sent to an irreversible burn address, has sparked curiosity within the crypto community.

Unusual On-Chain Activity

• Repeated ETH Burns: The same user has also donated nearly 2,000 ETH ($5.3M) to various addresses, including WikiLeaks.
• Conspiracy Allegations: The messages accompanying the transactions claim that Kuande Investments’ leadership engages in unethical practices involving neural technology.
• Community Reaction: The crypto world remains divided—some see the act as an elaborate protest, while others speculate it could be a form of anonymous whistleblowing.

Regardless of intent, the incident has drawn widespread attention, adding another layer of intrigue to Ethereum’s on-chain activity.

The Day’s Takeaway

Day’s Takeaway: Key Market Trends & Developments

Markets began the shortened trading week with subdued activity due to the US Presidents’ Day holiday, yet key developments across commodities, equities, and geopolitical fronts shaped the day’s narrative.

Gold Rebounds Amid Safe-Haven Demand

Gold prices gained 0.56% to $2,898, bouncing back from last week’s sharp decline as traders focused on geopolitical risks and US trade policies. Despite the holiday-thinned trading, bullion remains supported by central bank demand, with recent data showing a 54% YoY increase in purchases following Trump’s election win. The FOMC Meeting Minutes and upcoming Fed speakers could provide further direction for gold prices this week.

Oil Holds Steady Above $70 as Markets Eye Russia-Ukraine Talks

WTI crude remained stable above $70.00, with investors awaiting the outcome of peace discussions between the US, Russia, and Ukraine. Trump’s confirmed negotiations with Putin have fueled speculation that a resolution could lead to an increase in Russian oil exports, potentially weighing on prices. Meanwhile, OPEC+ is reportedly considering delaying its planned supply increases, a move that may help counteract downward pressure.

European Gas Prices Remain High Despite Decline

European natural gas prices dropped 9% last week, marking their steepest weekly decline since early January, but remain elevated above EUR 50/MWh. Ongoing Russia-Ukraine peace discussions and uncertainty over Germany’s storage refill policy are weighing on sentiment. Meanwhile, storage levels have fallen below 45%, compared to a five-year average of 54%, with colder weather driving increased withdrawals.

Trump’s $500B Ukraine ‘Payback’ Demand Raises Tensions

Reports surfaced that Trump is seeking a $500 billion ‘reimbursement’ from Ukraine, demanding control over key minerals, ports, oil, gas, and infrastructure. The leaked proposal has sparked panic in Kyiv, with Ukrainian officials reportedly caught off guard. The move, framed as economic compensation for US support, has led to concerns about Ukraine’s future sovereignty and economic independence.

Global Equities: European Stocks Gain, US Markets Quiet

With US markets closed, European stocks rallied, led by Germany’s DAX hitting a record high (+1.26%). France’s CAC and Italy’s FTSE MIB also posted gains. Meanwhile, the UK Telegraph reported Trump’s ongoing economic negotiations with Ukraine, adding another layer of uncertainty to global markets.

Crypto Markets: Solana Drops as XRP and DOGE See ETF Speculation

Solana (SOL) plunged over 9% to $180, extending its losses as traders shifted focus to XRP and Dogecoin, following news that the SEC acknowledged ETF filings for both assets. The derivatives market reflected a strong bearish sentiment, with $400 million in short positions outweighing $138 million in longs.

Elsewhere in crypto, Ethereum outperformed major assets, rising 1% to $2,700 and attracting $1.1 billion in stablecoin inflows. ETH ETFs have seen 145,000 ETH in inflows so far in February, nearly 7x January’s total. Meanwhile, a mystery user burned 600 ETH ($1.6M) while making controversial allegations against Kuande Investments, raising speculation within the community.

Key Central Bank Updates: Fed, ECB, BOE, RBA, RBNZ in Focus

• Fed officials emphasized the need for a steady rate policy, citing persistent inflation risks and strong labor market conditions. Markets are now pricing in 43 basis points of easing for 2025, with focus on this week’s FOMC Meeting Minutes.
• ECB signals more rate cuts ahead, as policymakers acknowledge downside risks to growth and inflation.
• Bank of England’s Bailey maintained that gradual disinflation is underway, though concerns remain over the impact of US tariffs.
• The Reserve Bank of Australia (RBA) is expected to cut rates by 25bps, while the Reserve Bank of New Zealand (RBNZ) could move ahead with a 50bps cut amid softer economic conditions.

Geopolitics: Ukraine War and European Security Take Center Stage

European leaders, including UK PM Keir Starmer and Polish PM Donald Tusk, stressed that Ukraine’s future is an existential issue for Europe. Discussions continue on ramping up defense spending, as Russia signals unwillingness to de-escalate tensions. Meanwhile, Trump’s push for economic control over Ukraine has created new diplomatic challenges between Washington and Kyiv.

Looking Ahead: Key Events to Watch

• US FOMC Meeting Minutes (Wednesday, 2 PM ET) – Could provide further insight into the Fed’s stance on rate cuts.
• Ongoing Russia-Ukraine peace talks – Any breakthroughs could impact energy markets significantly.
• RBA and RBNZ policy decisions – Expected rate cuts could influence AUD and NZD movements.
• Crypto ETF developments – Speculation around XRP and DOGE ETFs may continue driving sector volatility.

With markets resuming full activity on Tuesday, investors will closely monitor these developments to assess their impact on equities, commodities, and global trade.