GGMA Morning Brief: Asian equity markets diverge, Did US lead USDJPY rate checks?, Tariff takes effect at 10%!, Dimon sees parallel to pre-crisis era, Citrini AI scare, Today: ECB, BOE & Fed, US Conf.
Good morning,
I hope all is well.
Here are the main overnight news and market movers:
Markets: Asian equity markets diverge
Asian equity markets diverged sharply on Tuesday morning, with semiconductor-heavy markets in South Korea and Taiwan surging on AI supply-chain optimism. At the same time, broader risk sentiment remained fragile following Monday’s US selloff triggered by a Citrini Research report warning of AI-driven disruption. China’s mainland markets reopened higher after the Lunar New Year, though Hong Kong slid. The dollar firmed modestly as Treasuries pared overnight gains, with the 10-year yield edging back to 4.05%. A Nikkei report revealed that US Treasury Secretary Bessent initiated USDJPY rate checks in January, signalling a rare shift in US FX policy. Gold retreated after a four-day rally while Bitcoin extended its 2026 rout below $63,000. The original cryptocurrency is down more than 19% in February, set for its worst monthly performance since June 2022 and is on track for a fifth straight monthly decline, its longest losing streak since 2018.
Yesterday, International Business Machines Corp. shares had their worst day in more than 25 years on Monday, after AI startup Anthropic PBC said its Claude Code tool can help modernise Cobol, a dated programming language that’s run on IBM computers. (BBG)
US led January yen rate checks, eyed joint intervention with Japan, Nikkei reports
U.S. authorities took the initiative in conducting January "rate checks" to prop up the yen and were ready to conduct joint intervention on Japan's request, the Nikkei newspaper reported on Tuesday, citing unidentified U.S. government sources. The rate checks conducted by the New York Federal Reserve, which acted on behalf of the U.S. Treasury Department, were carried out without Japan's Ministry of Finance requesting them, the paper said. Asked about the report, Japanese finance minister Satsuki Katayama told reporters on Tuesday that she has been in close dialogue with U.S. authorities over the four months since she took the post, and that communication "has become even tighter" recently. "Since both sides have various things we must protect, I believe we can say that we are each doing our jobs properly," she said at a regular press conference. (MS)
Donald Trump’s global tariff takes effect at 10%
Donald Trump is implementing a new global tariff of 10 per cent, rather than the 15 per cent rate announced at the weekend after his defeat at the Supreme Court, according to a notice from the US Customs and Border Protection agency. Trump’s move to apply a 10 per cent global levy from 12.01 am on Tuesday, delaying the enactment of the 15 per cent tariff, follows a backlash to the higher rate from several US trading partners, including the EU and the UK. The White House signalled that Trump was still committed to imposing a 15 per cent global tariff. “It is being worked on and will come later,” an official said, without specifying a timeline.
Congress contemplates reasserting tariff authority after supreme court ruling
Following the Supreme Court’s ruling, bipartisan Congressional efforts to reclaim tariff authority are gaining momentum. Rep. Don Bacon (R-NE) noted tariffs are unpopular 2-to-1 with voters and pointed to a bipartisan bill he introduced with eight cosponsors, alongside a Senate companion bill led by Sen. Maria Cantwell (D-WA) with 13 cosponsors. However, House Speaker Mike Johnson acknowledged that finding ‘consensus on any path forward on tariffs on the legislative side’ would be a challenge, effectively conceding dim prospects for passage. For markets, the Congressional angle matters because any legislative tariff framework could cap the administration’s ability to reimpose higher rates when Section 122’s 150-day window expires. (CNBC)
FedEx sues for refund of tariffs, days after SCOTUS ruling
Federal Express on Monday sued the U.S. government, seeking a “full refund” of the money the shipping giant paid for tariffs unilaterally imposed last year by President Donald Trump, which the Supreme Court ruled last week were illegal. FedEx’s suit appears to be the first filed by a major American company seeking a refund for tariffs after Friday’s Supreme Court decision. Other companies filed lawsuits claiming refunds before the court ruled that the tariffs Trump imposed under the International Emergency Economic Powers Act are illegal. (CNBC – Continue Reading)
EU Parliament freezes Turnberry trade deal over 15% tariff
The European Parliament’s main political groups voted to suspend ratification of the Turnberry Agreement — the landmark EU-US trade deal negotiated last summer — after Trump raised the universal import surcharge to 15%. Brussels views the tariff hike as a direct breach of the deal’s core terms, which had set preferential access for EU exports. (Yahoo Finance, MarketScreener (RTRS))
Japan warns against trade deal backtracking after latest tariffs
Japanese Trade Minister Ryosei Akazawa cautioned against any tariff actions that could disadvantage Japan compared to the Japan-U.S. trade agreement reached last year, during a phone call with U.S. Commerce Secretary Howard Lutnick as a new set of U.S. tariffs is about to come into effect. Akazawa and Lutnick agreed that Japan and the US would collaborate closely to ensure the prompt and seamless implementation of projects within a $550 billion investment framework during their conversation on Monday evening. (BBG – Continue Reading)
Dimon sees parallel to pre-crisis era as rivals do ‘dumb things’
JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said he's beginning to see parallels to the period before the 2008 financial crisis, when a rush to lend ended in disaster. Dimon anticipates the credit cycle will eventually weaken again, though he's unsure when, and said a few people are doing "dumb things" to generate net interest income. Dimon also expressed doubt that concerns about artificial intelligence would significantly impact credit losses and stated he considers his bank a winner in the AI race. (BBG)
Citrini AI scare trade crushes US software stocks; IBM worst plunge in 25 years
A weekend report from little-known Citrini Research titled ‘The 2028 Global Intelligence Crisis’ modelled a left-tail scenario in which rapid AI adoption causes mass white-collar displacement, pushing US unemployment to 10.2% and the S&P 500 down 38% by mid-2028. The note triggered a sharp selloff on Monday across US software, payments, insurance, and cybersecurity stocks, with the iShares Expanded Tech-Software ETF hitting a 52-week low, down 5% on the day and 30% year-to-date. IBM suffered its worst single-day plunge in 25 years. Citrini co-author Alap Shah said in a Bloomberg TV interview that chipmakers, data centres, and foundation-model labs are the key beneficiaries of AI. At the same time, intermediation businesses like insurers and banks face disruption. His firm had short positions in some of the companies cited in the report while owning ‘a lot’ of semiconductor stocks. ( Yahoo Finance (BBG))
Trump may address retirement plan in the State of the Union
President Donald Trump has suggested possible reforms to retirement savings policies, including a proposal to allow 401(k) funds to be used for down payments on housing, though his position remains cautious. During an Air Force One press briefing on 25 January 2026, Trump stated he is "not a huge fan" of the idea, emphasising that 401(k) accounts have increased in value, some by 80–90%, outpacing gains in the housing market. His remarks contrast with earlier support from Chief Economic Adviser Kevin Hassett, who had indicated he might introduce the proposal during the upcoming State of the Union address. (Semafor – Continue Reading)
China leaves LPR unchanged for ninth straight month
China left benchmark lending rates unchanged for a ninth consecutive month in February on Tuesday. The one-year loan prime rate (LPR) was kept at 3.0%, while the five-year LPR was unchanged at 3.5%. Most new and outstanding loans in China are based on the one-year LPR, while the five-year rate influences the pricing of mortgages. (RTRS – Continue Reading)
Today’s Macro Roadmap: ECB, BOE & Fed speak, US ADP, house prices & consumer confidence
The Conference Board Consumer Confidence index is the day's marquee data release. Consensus expects a recovery to 87.3 from January's 84.5, which fell below pandemic levels to the lowest reading since May 2014. Analysts note that some of this decline could have been due to escalating headlines about Greenland and European tariffs, which could fall away in today’s report. However, the labour market differential — a key leading indicator — dropped to a cycle low of 3.1% from 8.4% in December, signalling growing consumer anxiety about employment prospects. A miss here would reinforce concerns about the consumer spending outlook; a beat would suggest the January collapse was noise.
In the US, S&P will publish the Case-Shiller home price index for October at 15:00 CET. The consensus expects a 0.1% point increase in the annual growth rate.
This is an exceptionally heavy day for central bank communications, with 11 scheduled appearances spanning the Fed, ECB, and BoE. The highlight is the BoE Treasury Select Committee hearing (15:15 CET) where Governor Bailey and Chief Economist Pill will testify on the February Monetary Policy Report — notably after a contentious 5-4 hold vote. On the Fed side, Governor Waller (15:15 CET) is the most market-sensitive speaker following his January dissent in favour of a 25bp cut. However, his Tuesday topic is "Technology" rather than monetary policy. Governor Cook (15:30 CET) speaks on "AI and Productivity." Bostic (15:00 CET) delivers what may be his final public appearance before retiring on Feb 28. ECB President Lagarde (18:45 CET) appears at a panel in Frankfurt, two days after declaring on CBS that she is "not done" amid early-departure rumours.
The key tension at the TSC will be the Bailey-Pill divergence. Bailey is cautiously dovish: he expects a "sharp drop" in inflation over the coming months and sees "scope for some further easing". He noted that "risks from inflation persistence appear to have continued to reduce." Pill is the MPC's leading hawk: he explicitly said rates at 3.75% are "a little bit too low" and called prior cuts an "error." He pegged underlying UK inflation at approximately 2.5% — above target — and argued that any near-term dip in headline inflation would be temporary. With the February vote split at 5-4 (hold vs cut), MPs will press on whether the March meeting is live for a cut, the fall in services inflation from ~5.0% to 4.4%, the significance of unemployment rising to 5.2%, and risks from global trade uncertainty.
Regarding the Fed, Goolsbee remains the most dovish voice on the Committee. On Feb 17, he said "several more rate cuts can happen in 2026" if inflation proves transitory and returns to 2%. However, he acknowledged that services inflation is "not tamed" at 3.2% annualised, and that core PCE has "basically been stalled out at 3%." He wants 6-8 months of lower inflation data before acting, making his dovishness conditional rather than unconditional.
Waller is the most market-sensitive speaker on Tuesday. He dissented at the January FOMC meeting, voting for a 25bp cut — believing labour market risks outweigh inflation concerns. In his NABE speech yesterday (23 Feb), he argued for "looking through" tariff effects, estimating underlying inflation near 2%, and flagged serious concerns about labour market quality: 2025 was "the weakest year for job creation in decades outside of a recession." He described the March rate decision as "close to a coin flip", depending on February labour data. His Tuesday topic is Technology/Fintech, not monetary policy, so market impact may be limited unless Q&A strays to rates.
Bostic endorsed the January FOMC hold and has taken an increasingly hawkish posture in his final weeks. He warned that "more rate cuts could reignite inflation and hurt Fed credibility" and said inflation has been "stuck in the high 2s, low 3s range" for two years. He sees "maybe one or two" more cuts to reach neutral but believes there is "little to suggest price pressures will dissipate before mid- to late 2026." As a retiring president, he may be more candid than usual in his remarks.
Good luck today, and feel free to ping me in the chat to discuss markets and views!