U.S. President Donald Trump and Indian Prime Minister Narendra Modi shake hands as they attend a joint press conference at the White House in Washington, D.C., U.S., Feb. 13, 2025.The world's largest economy has struck a deal with the most populous nation.U.S. President Donald Trump announced Monday that America will lower so-called reciprocal tariffs on India to 18% from 25%. As part of the deal, New Delhi will "BUY AMERICAN" at "a much higher level," and stop buying oil from Russia. Instead, India will im ...

Group 1 - Kevin Warsh's potential leadership at the Federal Reserve is seen as a positive development for banks, with expectations of interest rate cuts and a reduction of the Fed's $6.6 trillion balance sheet, which could create a favorable profit environment for the banking industry [1] - The ideal scenario for a restructured Fed would involve a clear separation of monetary policy from fiscal policy, allowing politicians to handle structural deficits [2] - Warsh's plan to shrink the Fed's balance sheet faces significant internal resistance, as there is strong support within the Fed for the current "ample reserves" framework, which may limit the effectiveness of his proposals [3] Group 2 - The nomination of Warsh is viewed as a rejection of Jerome Powell's era, but his confirmation process is complicated by political tensions, creating uncertainty about the Fed's future direction [4] - Concerns arise regarding the independence of the Fed, as Warsh has expressed support for regulatory changes that may favor smaller banks, raising fears that the Fed could be used to advance the executive branch's deregulatory agenda [5]

Core Insights - The market has experienced a significant downturn, with over $10 trillion in market value lost from gold and silver in just three days, indicating a major episode of wealth destruction in modern metals [2][3] - Spot gold prices fell below $4,500 per ounce, a decline of nearly $1,000 in three trading days, while silver dropped below $72, marking a nearly 40% loss from recent highs [3] - The decline in gold and silver market capitalization was approximately $7.4 trillion for gold and $2.7 trillion for silver, surpassing the total market value of the cryptocurrency market [3] Market Dynamics - The sudden market movements occurred without a clear catalyst, raising concerns about liquidity, monetary policy, and the role of traditional safe-haven assets [4] - The Federal Reserve's anticipated balance-sheet contraction, as indicated by incoming Fed Chair Kevin Warsh, is contributing to market repricing, suggesting reduced liquidity for various asset classes [5] Impact on Crypto Market - The cryptocurrency market has also been affected, losing over $430 billion in market value within four days, reflecting fears of a liquidity-driven unwind across asset classes [6] - Both Bitcoin and Ethereum have experienced significant declines, with overall crypto sentiment deteriorating rapidly [6]

Don't expect Kevin Warsh to be a bomb-thrower. Several longtime observers of the Federal Reserve told Business Insider that President Donald Trump's pick to become its next chairman is a good listener who looks for consensus.That could prove essential for Warsh, who has emerged as a sometimes-vocal critic since leaving the central bank more than a decade ago. While some Fed watchers criticized Warsh's nomination, citing shifts in his stance on interest rates, others praised his experience and communication ...

(Bloomberg) — Precious metals clawed back some losses after another heavy selloff in Asian trading hours, as traders took stock of the abrupt unwinding of a record-breaking rally. Spot gold fell by about 4%, after tumbling 10% earlier, extending its biggest slump in more than a decade on Friday. Silver dipped by 6%, after sliding 16% earlier and posting a record intraday drop on Friday. Most Read from Bloomberg Precious metals had risen to record highs that shocked even seasoned traders. An already-sco ...

1. Report Industry Investment Rating - No specific industry investment rating is provided in the report 2. Core Viewpoints - The report analyzes the fixed - income market, including bond price movements, new issuances, and macro - economic factors. It also provides insights into the China economy based on PMI data and anticipates policy stimulus and GDP growth trends [2][3][13] - West China Cement's tender offer and new bond issuance are considered to lower its near - term refinancing risk, and the report maintains a buy rating on WESCHI 9.9 12/04/28 [7][8] 3. Summary by Relevant Catalogs Trading Desk Comments - Last Friday, financial FRNs traded 1bp wider. In HK, NWDEVL/VDNWDL complex surged 0.5 - 3.0pts. FAEACO 12.814 Perp rose 1.5pts. SHUION 26 - 29 edged 0.2 - 0.6pt higher. SUNHKC 26 was 0.1pt lower and SUNHKC 29 was 0.3pt higher. TW lifers were 2 - 4bps wider. Long - end MEITUA/KUAISH widened 2 - 3bps. EHICAR 26 was down by 0.6pt. WESCHI 26 - 28 were 0.1pt higher. In Chinese properties, VNKRLEs rose 1.8 - 2.7pts. FUTLAN 28 edged 1.1pts higher. LNGFOR 27 - 32 were 0.2pt lower to 0.2pt higher. In SE Asian space, OCBCSP/UOBSP traded 1 - 2bps wider. IHFLIN 27 - 30/TOPTB 6.1 Perp were unchanged to 0.1pt lower. VLLPM 27 - 29 rose 1.0 - 1.3pts. GLPSP Perps were up by 0.5 - 0.9pt. JP insurance subs like RESLIF 6.875 Perp leaked by 0.1pt. NTT 35/MUFG35 - 36 were 1 - 3bps wider. Yankee AT1s were 0.3pt weaker. In the Middle East, ARAMCO 30 - 56s/SECO 29 - 36s widened 1 - 4bps. Long - end KSAs were down 0.1 - 0.5pt. LGFV space was stable [2] - This morning, HYNMTR FRNs were 1 - 2bps tighter. KUAISH slightly recovered to 1bp tighter. ZHOSHK 28 spread was unchanged. FAEACO 12.814 Perp/VNKRLE 27 were 1.0 - 1.2pts lower. NDPAPE 14 Perp was 0.3pt higher. WESCHI 26 - 28 were 0.4 - 1.0pt higher [3] Marco News Recap - Last Friday, S&P (- 0.43%), Dow (- 0.36%) and Nasdaq (- 0.94%) were lower. Trump nominated Kevin Warsh to lead Federal Reserve. US Dec'25 PPI was +0.5% mom, higher than the market expectation of +0.2%. 2/5 - year UST yield was higher while 10/30 - year UST yield was lower. 2/5/10/30 - year yield was at 3.52%/3.79%/4.26%/4.87% [6] Desk Analyst Comments - West China Cement (Weschi) launched a tender offer for its USD200mn WESCHI 4.95 07/08/26 at a tender price of 101.238, equivalent to the bond's call price. The offer expires on 6 Feb'26 5pm CET. Weschi plans to redeem WESCHI 26 in full on 6 Mar'26 at 101.238 [7] - Concurrently, Weschi will issue USD300mn WESCHI 10.5 11/11/29 (-/B/B). Net proceeds will be used to refinance existing debts, including funding the tender offer and early redemption for WESCHI 4.95 07/08/26. The report maintains a buy on WESCHI 9.9 12/04/28 for its good carry, with WESCHI 28 trading at YTM of 9.8% at 100.3, up c2pts YTD. Weschi's earnings improved in 1H25, and near - term refinancing risk is viewed as lower [8] China Economy - China's manufacturing PMI retreated in January after a December rebound. Demand softened as new orders slipped back into contraction and export orders weakened again. Deflation pressure continued to ease, with raw material purchase and ex - factory prices both expanding, indicating PPI may return to positive sooner. Service PMI remained in contraction while construction PMI fell back, signaling pressure to stabilize fixed asset investment. Policy stimulus around CNY is expected, including stabilizing the property market and stimulating consumption. A 50bp cut in RRR and a 10bp cut in LPR in 1Q26 are expected, followed by an additional 10bp LPR cut in 3Q26. The broad fiscal deficit should remain almost flat at 8.5% in 2026, and the full - year GDP growth rate may decline from 5% in 2025 to 4.6% in 2026 [12][13] - Manufacturing PMI fell to 49.3% in January from 50.1% in December, with new order index declining to 49.2% from 50.8% and new export orders falling to 47.8% from 49.0%. Production eased but stayed in expansion at 50.6% in Jan. Deflation pressure continued to ease as raw material purchase prices stayed elevated and ex - factory prices improved. Import demand stayed weak, and inventory indicators remained subdued [14] - Non - manufacturing PMI softened in January. Service PMI edged down to 49.5% from 49.7%, with activity expectations improving. Service selling prices improved, while employment remained subdued. Construction fell to 48.8% in January, with new orders weakening and business expectations easing, indicating pressure on fixed asset investment [15] Offshore Asia New Issues Priced | Issuer/Guarantor | Size (USD mn) | Tenor | Coupon | Priced | Issue Rating (M/S/F) | | --- | --- | --- | --- | --- | --- | | ADM Elektrik | 500 | 5NC2 | 9.5% | 9.5% | B2/-/BB | | Tsetsen Mining and Energy | 300 | 5yr | 11.375% | 11.5% | Unrated | | West China Cement | 300 | 3.75yr | 10.5% | 10.5% | -/B/B | [18] Pipeline | Issuer/Guarantor | Currency | Size (USD mn) | Tenor | Pricing | Issue Rating (M/S/F) | | --- | --- | --- | --- | --- | --- | | CMBC International Funding (HK) | USD | - | 3yr | SOFR + 115 | -/-/BBB | | New Development Bank | USD | - | 3yr | SOFR MS + 55 | Unrated | [19] News and Market Color - Last Friday, 81 credit bonds were issued onshore with an amount of RMB45bn. In Jan'26, 1,999 credit bonds were issued with a total amount of RMB1,691bn, a 16.2% yoy increase [20] - China is considering selling special government bonds of RMB200bn (cUSD29bn) to recapitalize some insurers and injecting RMB300bn into ICBC and ABC [20] - Macau gaming revenue for Jan'26 rose 24% yoy to MOP22.6bn (cUSD2.8bn) [20] - Indonesia is reforming its equity markets after the Jakarta Composite Index plunged by up to 16.5% [20] - Adani Green's directors plan to seek dismissal in US SEC lawsuit [20] - Azure Power Energy delayed the planned early redemption of AZUPOE 3.575 08/19/26 of USD294.184mn to 13 Feb'26 from 5 Feb'26 [20] - Panama's top court ruled that CK Hutchison's port - operating contract is unconstitutional [20] - China Overseas Grand Oceans priced a 3yr dim sum bond at 3.2%, tightened from IPT at 3.75%, issue size RMB1.3bn [20] - Dalian Wanda announced to redeem USD50mn of DALWAN 11 02/13/28, and the maximum acceptance amount of the tender offer is USD350mn [20] - Muthoot Finance plans to raise USD600mn under the global medium - term note program [20] - Nomura Holdings 9MFY26 net revenue rose 10.5% yoy to JPY1.6tn (cUSD10.4bn) [20] - CTFE is in discussions with potential investors regarding potential investments in NWD, but no agreement has been reached [20] - Vedanta Ltd.'s demerge plan will be effective on 1 Apr'26, and it expects to list four demerged units by mid - May'26 [20] - China Vanke expects its loss attributable to shareholders to widen sharply in FY25 to RMB82bn (cUSD11.8bn) [27] - Yuexiu Property priced a 3yr dim sum bond at 3.4%, tightened from IPT at 3.85%, issue size RMB1.735bn [27]

Core Viewpoint - Strategist Mike Wilson believes that Warsh will serve as a credibility anchor for the current government's monetary policy [1] Group 1 - The appointment of Warsh is expected to enhance the credibility of the government's monetary policy [1]

Group 1 - The core viewpoint is that global gold and silver prices have experienced a significant decline after a historic rise, with gold dropping nearly 10% and silver falling 16%, erasing all gains made since the beginning of the year [1][4] - The recent sell-off was triggered by the nomination of Kevin Walsh as the new Federal Reserve Chair, which strengthened the dollar and reduced the appeal of dollar-denominated precious metals [7] - Despite the short-term price corrections, the fundamental support for gold remains strong, and the long-term investment theme for gold is still positive, indicating that the market has not entered a phase of sustained decline [7] Group 2 - The precious metals market has been driven by multiple factors since the beginning of the year, including geopolitical tensions, currency devaluation risks, and uncertainties regarding the independence of the Federal Reserve [4] - The active trading by Chinese investors in the domestic market provides some support for prices, with retail demand and physical purchases potentially being released during price corrections [8] - Investors are advised to remain rational and focus on global macroeconomic trends, monetary policy movements, and geopolitical risks to navigate market volatility and seek potential investment opportunities [8]

Market Overview - U.S. stock futures are indicating a lower opening as investors react to global manufacturing concerns, uncertainty regarding the Federal Reserve's leadership, and a sell-off in precious metals and cryptocurrencies [1][2] - Major indexes are poised for declines following a weak close on Wall Street last Friday, with E-mini S&P 500 futures down approximately 0.7% and Nasdaq 100 futures falling roughly 1% [2] Current Performance of Major Market Indexes - The S&P 500 slipped 0.4% to 6,930.03, the Dow Jones Industrial Average fell 0.4% to 48,892.47, and the Nasdaq Composite dropped 0.9% to 23,461.82 [3] - The US500 index fell to 6,871 points, losing 0.99% from the previous session, while the Russell 2000 index declined 2.0% last week [3] Upcoming Market Events - Key economic data releases this week include the U.S. non-farm payrolls report, Manufacturing and Services PMI readings, ADP employment change, and weekly jobless claims [4] - The ISM manufacturing PMI has remained in contractionary territory since March 2025, heightening focus on these indicators [4] Corporate Earnings - Major tech companies reporting this week include Advanced Micro Devices, Amazon, Alphabet, Qualcomm, PayPal, and Super Micro Computer, with Palantir Technologies and The Walt Disney Company reporting today [5] - Analysts project moderate revenue growth for Disney, but there are risks of earnings per share slipping [12] Central Bank Decisions - The Reserve Bank of Australia, European Central Bank, and Bank of England are expected to set new policy rates, while the Federal Reserve recently left its benchmark interest rate unchanged at a range of 3.5% to 3.75% [6] Major Stock News - President Trump's nomination of Kevin Warsh as the next Federal Reserve Chair has introduced uncertainty into monetary policy expectations, impacting precious metals and strengthening the U.S. dollar [7] - Apple reported a record-breaking fiscal Q1 2026 with revenue of $143.8 billion, up 16% year-over-year, driven by iPhone sales and services growth [12] - Tesla shares fell 3.2% despite beating earnings estimates, facing pressure from competition and planning to double AI capital expenditures to $20 billion [12] - The healthcare insurance sector is under pressure due to a proposed minimal increase in Medicare payment rates for 2027, leading to significant declines in shares of UnitedHealth Group, Humana, and CVS Health Corporation [12] - Goldman Sachs saw a surprising 56% surge in 2025, benefiting from its trading desks and exiting consumer banking [12] - Nvidia slipped 2% in premarket trading amid broader tech sector pressure, with other tech companies like Samsung Electronics and SK Hynix also experiencing sell-offs [12]

Core Viewpoint - Kevin Warsh, nominated to be the next Federal Reserve chair, aims to significantly reduce the central bank's multi-trillion-dollar balance sheet, but experts believe this will be challenging and slow to achieve, if possible at all [1]. Group 1: Federal Reserve's Balance Sheet Management - The Fed's current holdings and the management regime for interest rates in a cash-rich environment make it difficult to unwind the balance sheet while maintaining market stability and achieving monetary policy goals [2]. - Warsh has previously argued that the large Fed holdings distort financial conditions and should be significantly reduced, with the proceeds used to lower interest rates to support households and small businesses [3]. - The Fed's balance sheet expanded to a peak of $9 trillion during the COVID-19 pandemic due to crisis buying, and a contraction process known as quantitative tightening (QT) has since reduced it to $6.6 trillion by late 2025 [4]. Group 2: Challenges in Reducing the Balance Sheet - The use of the balance sheet as a monetary policy tool has become standard, especially with the likelihood of short-term rates being cut to near-zero levels during economic troubles [5]. - Experts indicate that while Warsh may desire a smaller balance sheet and reduced Fed presence in financial markets, actually achieving this reduction is unlikely, as banks prefer the current level of reserves [6].