Group 1 - The USD/KRW exchange rate is currently at 1442.3500, with a decline of 0.12% observed [1] - All economists surveyed expect the Bank of Korea to maintain the benchmark interest rate at 2.50% during the meeting on February 26, 2024, and to keep it at this level throughout 2026 [1][4] - The Korean won has depreciated by 5.2% since the last rate cut in May of the previous year, prompting authorities to take measures to curb excessive volatility [4] Group 2 - Seoul apartment prices have risen for 55 consecutive weeks, with a weekly increase of 0.15%, raising concerns about financial imbalances in the market [4] - Analysts indicate that the Bank of Korea is increasingly focused on risks related to foreign exchange and real estate, with a low likelihood of rate cuts this year due to a more solid economic recovery [4] - Economists predict that if asset prices continue to rise and affect the real estate market, the central bank may need to consider tightening policies by 2027 to mitigate inflation risks [4]

Group 1 - The report by Paul Ciana from Bank of America Securities indicates a hawkish seasonal pattern for U.S. interest rates in February, providing opportunities for small-cap stocks and crude oil [1] - Historical data shows a 65% probability of the U.S. 5-year Treasury yield rising in February, with an average increase of approximately 9.5 basis points [1] - The 2-year and 10-year Treasury yield curve tends to flatten, with a 67% probability of narrowing by an average of about 7 basis points [1] Group 2 - The Russell 2000 index is expected to perform strongly in the first and middle third of February, with about a 70% probability of rising during these periods [1] - The report highlights a strong performance for Hong Kong stocks in mid-February, with the Hang Seng Index having a higher probability of rising than falling [1] - Interest rate movements are concentrated at the beginning of the month, with 2-year and 5-year Treasury yields likely to rise in the first 20 days of February [1] Group 3 - The report notes that the U.S. dollar tends to strengthen against the Japanese yen at the beginning of the month, while it shows weakness against some Latin American currencies [1] - In late February, the U.S. dollar generally strengthens against the South Korean won [1] - Overall, commodities are expected to show moderate support, led by oil, with Brent crude oil typically trending upward in February, particularly in the last third of the month [1] Group 4 - Ciana examines the "holiday to holiday" time window since 2000, identifying a strong signal from February 9 (National Pizza Day) to February 17 (Random Acts of Kindness Day), where small-cap stocks and U.S. 5-year Treasury yields tend to rise [2] - There is an observed upward trend in oil prices from Valentine's Day (February 14) to Easter (late March/early April) [2] - The report warns that the seasonal performance of the S&P 500 in February tends to be flat, suggesting that timing operations within the month is more important than a singular directional judgment [2]

1. Report Industry Investment Rating - No information about the report industry investment rating is provided in the content. 2. Core Viewpoints of the Report - This week, the U.S. Treasury yields showed a pattern of long - end rising and short - end falling, with the yield curve becoming steeper. The market still bets on a possible easing cycle later this year, driving down short - term interest rates, while long - term inflation and term premium expectations are under pressure due to uncertainties in fiscal and trade policies, budget deficits, and potential threats to the Fed's independence [1][12]. - The Fed maintained the federal funds rate target range at 3.50%–3.75% as expected in the January FOMC meeting. The Fed revised up its outlook on the U.S. economy, believing that economic growth momentum has strengthened, the labor market has shown signs of stabilization, and inflation remains high but has not deteriorated further [2][12]. - Trump nominated Kevin Warsh as the next Fed Chair. Warsh's past stance was hawkish, but he has shown signs of turning dovish recently. His future policy stance will be an important observation indicator for the market [2][13]. 3. Summary According to the Directory 3.1 U.S. Treasury Yield Review This Week 3.1.1 Warsh's Nomination and the Steepening of U.S. Treasury Yields - This week (January 23 - January 30, 2026), the changes in U.S. Treasury yields were as follows: 1 - month (-6bp, 3.72%), 1 - year (-5bp, 3.48%), 2 - year (-8bp, 3.52%), 5 - year (-5bp, 3.79%), 10 - year (+2bp, 4.26%), 30 - year (+5bp, 4.87%). The yield curve became steeper [1][12]. - The Fed maintained the federal funds rate target range at 3.50%–3.75% in the January FOMC meeting. Waller and Milan voted against, advocating a 25bp rate cut. The Fed revised up its outlook on the U.S. economy [2][12]. - Trump nominated Kevin Warsh as the next Fed Chair. Warsh defeated other candidates. His past stance was hawkish, but he has shown dovish signs recently [2][13]. 3.1.2 This Week's U.S. Treasury Auctions - On January 26, a $69 billion 2 - year U.S. Treasury bill auction was held. The winning yield was 3.580%, the bid - to - cover ratio was 2.75 times, and the tail was - 1.375 [18]. - On January 27, a $70 billion 5 - year U.S. Treasury bill auction was held. The winning yield was 3.823%, the bid - to - cover ratio was 2.34 times, and the tail was 0.300 [18]. - On January 29, a $44 billion 7 - year U.S. Treasury bill auction was held. The winning yield was 4.018%, the bid - to - cover ratio was 2.45 times, and the tail was 0.175 [19]. 3.2 U.S. Macroeconomic Indicator Comments - The U.S. PPI in December had a monthly环比 increase of 0.5%, much higher than the market expectation of 0.2%, and a year - on - year increase of 3%, indicating persistent inflation risks. The U.S. consumer confidence index in January dropped 9.7 points to 84.5, lower than the forecast of 90.6, hitting the lowest level since May 2014, reflecting consumers' increased concerns about the economic outlook [3][27]. - The Fed maintained the federal funds rate in the 3.5% - 3.75% range, pausing the easing cycle after three consecutive rate cuts. This decision reflects the Fed's recognition of the current economic resilience and its difficult balance between high inflation and a weak labor market [3][28]. - The number of initial jobless claims in the week ending January 24 decreased to 209,000, slightly lower than the previous week's revised figure of 210,000 and slightly higher than the market expectation of 206,000. The number of continued claims decreased to 1.827 million, the lowest since September 2024, showing a mild and stable labor market [3][28]. 3.3 Comments on Major Asset Classes - **Bonds**: German bond yields fell across the board, and Japanese bond yields fluctuated slightly overall. The decline in German bond yields was due to the market's expectation of the ECB maintaining or relaxing monetary policy. The movement of Japanese bond yields was affected by the slowdown in inflation and the Bank of Japan's cautious policy stance [30]. - **Equities**: Global equity markets were significantly differentiated, with Asian markets performing strongly. The top three gainers were the Korea Composite Index (+4.70%), the Hang Seng Index (+2.38%), and the India Sensex30 (+0.90%). The top three losers were the Vietnam VN30 (-2.31%), the German DAX (-1.45%), and the Nikkei 225 (-0.97%) [31]. - **Commodities**: Bitcoin, LME aluminum, and the hog index were under pressure. The top three gainers were Brent crude oil (+7.30%), London silver (+4.23%), and LME copper (+3.48%). The top three losers were Bitcoin (-5.97%), LME aluminum (-2.05%), and the hog index (-1.36%) [32]. - **Foreign Exchange**: The Japanese yen, Swiss franc, and South Korean won strengthened, while the U.S. dollar and some Asian currencies declined. The top three gainers were the Japanese yen (+2.99%), the Swiss franc (+2.60%), and the South Korean won (+1.78%). The top three losers were the Indian rupee (-0.58%), the Hong Kong dollar (-0.37%), and the U.S. dollar (-0.24%) [33]. 3.4 Market Tracking - The report provides multiple charts showing the changes in bond yields, stock indices, commodity prices, and foreign exchange rates of major global economies this week, as well as the latest economic data panels of the United States, Japan, and the Eurozone [35][38][41][43][46][53][58].

Group 1 - The South Korean Ministry of Finance stated that the U.S. Treasury report indicates the depreciation of the Korean won by the end of 2025 is "inconsistent with South Korea's strong economic fundamentals," suggesting that the U.S. Treasury acknowledges the inappropriate unilateral trend of the won [1][2] - The South Korean government will continue to maintain close communication with the U.S. Treasury to enhance mutual understanding and trust regarding the foreign exchange market, aiming to ensure stability in the foreign exchange market [1][2]

Group 1 - The South Korean won is expected to achieve its longest consecutive rise in 13 years, driven by optimistic expectations for the artificial intelligence industry and accelerated capital inflows due to the inclusion of key bond indices [1][4] - As of Thursday, the won appreciated by 0.8% against the US dollar, reaching a high of 1425.25, marking the seventh consecutive trading day of gains, the longest streak since January 2013 [1] - Samsung Electronics' significant profit growth has improved export prospects, further boosting market confidence in South Korea's economic fundamentals [1] Group 2 - Foreign investors have increased their purchases of South Korean local assets, buying $2.8 billion in stocks and $3.5 billion in bonds this year [4] - The South Korean stock market's valuation has surpassed Germany's, reaching $32.5 trillion, an increase of approximately $1.7 trillion since the beginning of the year, making it the tenth largest stock market globally [4] - The optimism surrounding AI and robotics has been a strong driver for the South Korean stock market [4] Group 3 - MUFG Bank's senior foreign exchange analyst Michael Wan predicts that the won will strengthen against the dollar throughout 2026, estimating an exchange rate of 1385 won per dollar by the end of that year [7] - The Bank of Korea is closely monitoring foreign exchange market fluctuations and has maintained its benchmark interest rate, considering the pressure on the won from dollar demand [7] - The South Korean government announced a comprehensive plan to address supply-demand imbalances in the foreign exchange market, including tax incentives to encourage the repatriation of overseas investment capital [7]

Group 1: Dollar Depreciation and Policy Signals - Trump's remarks indicate a shift in the U.S. government's stance towards a more tolerant view of dollar fluctuations, contrasting with previous administrations' emphasis on a strong dollar [1] - The market interprets this as a potential policy inclination to weaken the dollar to enhance export competitiveness, leading to a sell-off of the dollar [1] - Despite rising U.S. Treasury yields and expectations of the Federal Reserve pausing interest rate cuts, the dollar continues to decline, highlighting the dominant role of policy signals in the current market [1] Group 2: Asian Currency Market Trends - The Japanese yen shows complex volatility against the dollar, with a key short-term level at 152, influenced by domestic political cycles and potential central bank interventions [2] - The yen's movements are affected by political uncertainty ahead of upcoming elections, with historical data indicating increased volatility during such periods [2] - The South Korean won faces significant depreciation pressure, reaching its lowest level since March 2009, driven by domestic political and economic factors, as well as uncertainties regarding U.S. trade policies [4] Group 3: Renminbi Resilience - The renminbi exhibits orderly adjustments against the dollar, recently surpassing the 6.9 mark, reflecting market supply and demand dynamics [3] - Compared to the 2019 response when the renminbi first broke 7, the current market shows increased tolerance for exchange rate fluctuations, indicating a maturation of the renminbi's formation mechanism [3] - The future trajectory of the renminbi will be influenced by U.S.-China interest rate differentials, trade environments, and domestic economic recovery [3] Group 4: Commodity Market Analysis - International oil prices have risen above $66 per barrel, continuing an upward trend influenced by the dollar's depreciation and demand stimulation [5] - Gold prices have reached a historical high of over $5200 per ounce, driven by increased demand for alternative value storage assets amid dollar weakness and inflation concerns [6] - Industrial metal prices are experiencing widespread increases, but there are warnings of potential price corrections due to weakening demand and macroeconomic factors [7]

Core Viewpoint - Stephen Jen warns that a new cycle of dollar depreciation may have begun, and the market is unprepared for it [1] Group 1: Market Reactions - The dollar experienced its largest single-day drop since the imposition of tariffs last year, with the Bloomberg Dollar Index falling 1.2% to its lowest level in nearly four years [1] - Trump's comments led to significant volatility in the foreign exchange market, with the euro and pound reaching their strongest levels since 2021, and the Swiss franc hitting its highest level since 2015 [1] - The decline in the dollar has prompted concerns among overseas investors about selling off dollar assets, further exacerbated by previous threats of tariffs and unpredictable Federal Reserve policies [1] Group 2: Analyst Insights - Analysts note that many forex analysts are accustomed to a strong dollar and a robust U.S. economy, making them ill-prepared for a scenario where the dollar weakens while the economy remains strong [2] - Anthony Doyle from Pinnacle Investment Management suggests that the lack of concern from those who typically support the dollar indicates a weakening support for the currency [2] Group 3: Market Indicators - A market indicator from JPMorgan shows that the risk reversal index for the dollar against major currencies has dropped to its lowest level since June, indicating increased demand for hedging against dollar weakness [3] - The OECD data suggests that the dollar is overvalued against all G-10 currencies except the Swiss franc, with the yen and euro being particularly undervalued [3] Group 4: Diverging Opinions - Not all analysts agree that Trump's comments signal a long-term decline for the dollar; some believe the government is more focused on seeing the appreciation of currencies like the yuan and yen [4] - Robert Kaplan from Goldman Sachs warns that a prolonged dollar weakness could pose risks to the U.S. economy, emphasizing the importance of currency stability over export benefits given the current high debt levels [4]

Group 1: Dollar Weakness and Market Impact - The weakening of the dollar is reshaping global market dynamics, leading to a rotation of assets driven by "devaluation trades" across various sectors, including precious metals and emerging market currencies [1] - The Bloomberg Dollar Spot Index fell nearly 3% over four trading days, reaching a four-year low, driven by market concerns over the erratic policy-making of the Trump administration and ongoing criticism of the Federal Reserve [2] - The dollar's decline has catalyzed a strong performance in Asian currencies, with the MSCI Emerging Markets Currency Index reaching an all-time high [1][16] Group 2: Precious Metals Performance - Gold prices have surged past $5,200 per ounce, marking a historical high and a 20% increase year-to-date, while silver has seen an even more remarkable rise of over 50% [1][11] - The current bull market in precious metals is attracting investors away from currencies and sovereign bonds, amid concerns over fiscal deficits [11] - The recent rally in precious metals is attributed to dollar weakness, geopolitical uncertainties, and criticism of the Federal Reserve by Trump [8][11] Group 3: Industrial Metals Strength - Industrial metals are experiencing a strong start in 2026, with aluminum prices rising to $3,246.50 per ton, a peak not seen since April 2022, and copper and zinc also showing significant increases [12][15] - Goldman Sachs has raised its aluminum price forecast due to strong price performance and bullish investor sentiment, adjusting the average price for the first half of the year to $3,150 per ton [15] Group 4: Stock Market Reactions - U.S. stock futures are showing positive movement, with the Nasdaq 100 futures up over 1% and the S&P 500 futures increasing by 0.47% [5][6] - Asian stock markets are benefiting from the asset rotation, with the MSCI Asia-Pacific Index reaching a historical high, driven by strong performance in technology stocks [11][16]

Group 1: Dollar Weakness and Market Impact - The weakening of the dollar is reshaping global market dynamics, leading to a shift in asset allocation driven by "devaluation trades" across various sectors including precious metals and emerging market currencies [1][2] - The Bloomberg Dollar Spot Index fell nearly 3% over four trading days, reaching a four-year low, primarily due to market concerns over the unpredictable policies of the Trump administration and ongoing criticism of the Federal Reserve [2] - The dollar index showed a slight rebound of 0.2%, currently at 96.4, but remains in a weak range [5][16] Group 2: Precious Metals Performance - Gold prices surged past $5200 per ounce, marking a historical high and a cumulative increase of approximately 20% this year, while silver prices have skyrocketed over 50% [1][11] - The current bull market in precious metals is attracting investors away from currencies and sovereign bonds towards hard assets, amid concerns over fiscal deficits [11][15] Group 3: Industrial Metals Strength - Industrial metals are experiencing a strong start in 2026, with aluminum prices rising 1.2% to $3246.50 per ton, reaching the highest level since April 2022, while copper and zinc also saw increases of 1.4% and 1.7% respectively [12][15] - Goldman Sachs has raised its aluminum price forecast, citing strong price performance and sustained bullish sentiment among investors [15] Group 4: Asian Currency Market - Emerging Asian currencies reached their highest levels since July last year, driven by the "dollar devaluation trade," with the MSCI Emerging Market Currency Index hitting a record high [16] - The Korean won and Malaysian ringgit led the gains, benefiting from the dollar's weakness and a recovery in growth, particularly in the technology sector [1][16]

Group 1 - The global foreign exchange market is experiencing a significant structural shift as the Trump administration's nuanced change in attitude towards a strong dollar is becoming a major benefit for Asian currency assets [1] - The dollar index fell to a four-year low in late January, indicating a growing inclination from Washington to utilize currency depreciation to reduce trade deficits and boost exports [1] - Market strategists believe that Asian currencies are in a favorable position to benefit from a weaker dollar, despite ongoing tariff threats [1] Group 2 - Comments from market observers highlight that the Trump administration is taking a calculated risk with currency depreciation, which could be beneficial before the situation escalates [2] - The weakening dollar reflects market unease regarding U.S. policy and economic outlook, with particular focus on major Asian exporters like Japan and South Korea [2] - Analysts suggest that the yen could see a rebound, especially with anticipated monetary policy divergence, as the Bank of Japan is expected to raise rates while the Federal Reserve may cut rates [2] Group 3 - The strategy of promoting a weaker dollar may help reduce trade imbalances in the long run but could also trigger extreme financial turmoil and distortions in other areas of the global economy [3]