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January 10th - As 2026 begins, a new round of competition has kicked off in the Chinese auto market. Automakers are offering promotional discounts and launching updated models with added features but no price increases. However, unlike last year, the fierce competition in the auto market has arrived earlier this year. According to incomplete statistics, since January 1st, more than 20 automakers and over 75 models have launched limited-time promotional activities, with diverse promotional methods. Some models offer direct cash subsidies, some offer fixed-price sales, some offer 3-year or 5-year interest-free financing, and some combine trade-in subsidies with additional incentives.On January 10, Yonhap News Agency reported that South Korean Defense Minister Ahn Gyu-baek stated regarding the allegation of a South Korean drone violating North Korean airspace that this was "absolutely not true," and that the drone shown in the publicly released photos by North Korea was not a type owned by the South Korean military. He also indicated that a joint inter-Korean investigation could be conducted into the matter.On January 10th, the U.S. Department of Agriculture announced on the 9th that it was immediately suspending all federal funding to Minnesota due to a large-scale fraud investigation in the state. U.S. Agriculture Secretary Brooke Rawlings posted on social media: "The Trump Administration has uncovered a massive fraud in Minnesota and Minneapolis—billions of dollars have been misappropriated by fraudsters. The U.S. Department of Agriculture is immediately suspending all federal funding to Minnesota until there is sufficient evidence that the fraud has ceased."NASA plans to separate and dock SpaceX Crew 11 with the International Space Station no earlier than 5 p.m. ET on January 14 (6 a.m. Beijing time on January 15).On January 10th, Trump posted on social media: "I hereby declare that we will not tolerate the American public being ripped off by credit card companies charging 20% to 30% or even higher interest rates, a practice that was rampant during the sleepy Joe Biden administration. It must be affordable! Starting January 20, 2026, as President of the United States, I will implement a one-year cap on credit card interest rates at 10%." Its worth noting that this date coincides with the one-year anniversary of the "historic and extremely successful" Trump administration.

EUR/USD falls to 1.0850 as German/US Data escalates the ECB-Fed Conflict

Alina Haynes

Feb 01, 2023 15:32

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Mid-1.0800s intraday support is reestablished for EUR/USD on Wednesday morning, reversing Tuesday's rebound gains. This demonstrates the market's uneasiness ahead of the Federal Open Market Committee (FOMC) meeting. German economic risks to the EU, as well as mixed data from the United States and fears that Fed Chairman Jerome Powell will yet support hawks, might potentially weigh on the currency.

 

The Eurozone's Gross Domestic Product (GDP) for the fourth quarter (Q4) climbed 0.1% quarter-over-quarter (QoQ) on Tuesday, compared to 0.0% expected and 0.3% earlier. The year-over-year statistics were also good for the bloc, topping the market consensus of 1.8% to achieve 1.9%, compared to 2.3% previously. Nevertheless, German Retail Sales decreased 5.3% month-over-month in December, which was substantially worse than expected. Earlier in the week, the German GDP likewise disappointed EUR/USD pair speculators.

 

In contrast, the US Employment Cost Index (ECI) for the fourth quarter declined to 1.0% compared to market estimates of 1.1% and previous readings of 1.2%. In addition, the Conference Board (CB) Consumer Confidence index dropped from 108.3 to 107.10 in January. The US Chicago Purchasing Managers' Index (PMI) for January, which rose to 44.3 vs 41 expected and 44.9 previous readings, does not merit substantial attention.

 

Aside from the United States, higher profit reports from industry leaders including General Motors, Exxon, and McDonald's alleviated the economic downturn and lifted Wall Street indices. Nevertheless, the Dow Jones Industrial Average (DJIA), the S&P 500, and the Nasdaq all reported daily gains of greater than 1.0% on the previous trading day. In contrast, the yields on 10-year US Treasury notes reversed a three-day rise and returned to 3.51 percent, while their two-year equivalents plummeted to 4.20 percent.

 

It should be noted that JP Morgan's annual survey uncovered a reduction in inflation fears and a rise in recession fears, which tests the risk profile in the middle of pre-Fed anxiety. In spite of this, the world's largest rating agency, Fitch, forecasts that the US Consumer Price Index (CPI) would moderate to the mid-3.0% band in 2023 and the high-2.0% range in 2024, putting pressure on EUR/USD bears.

 

As a result of these variables, S&P 500 Futures see minor losses, while US Treasury bond rates remain sluggish and halt their slide from the previous day. This allows the EUR/USD pair to prepare for the Federal Reserve's dovish rate hike of 0.25 percentage points.

 

While the 0.25 basis point Fed rate hike is virtually expected and has been priced in, EUR/USD traders will also pay close attention to January activity data and Jerome Powell's ability to defend aggressive rate hikes.


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