Widespread vol continues at start of new week, negative US equities news

Asia Market Update: Widespread vol continues at start of new week; Negative US equities news; No “Yentervention” in Jan confirmed; Focus on RBA tomorrow.

General trend and developments

-Massive Volatility continued in precious metals, with Spot Silver and Gold down -%, then up 5%, then down -10%, with Silver today again threatening the mid-70's lows seen on Fri during its >31% decline. Gold indeed dipped below the worst of Friday’s 9% plunge, down another -4% below its Friday close and into the $4600 handle. Palladium and Platinum down -4% and -5% respectively. US Natural Gas FUTs plunged -15%.

-Nasdaq -1.5% and S&P 500 -1.2% at their worst during the Asia session, on potential bad news on OpenAI/Nvidia deal 'on the rocks' and concerns over ORCL equity supply?

- [Oracle today announced $45-50B in debt financing plans for CY26, versus just last Nov CreditSights' senior analysts said Oracle could issue ~$65B more bonds over the next three years].

- [Further, Nvidia’s CEO Huang walked back earlier press reports that the OpenAI / Nvidia deal was ‘on ice’, saying that Nvidia will' 'absolutely' be involved, however said the investment will be “nothing like” $100B in size].

- Bitcoin -2.0% to $75.0K, threatening lows seen Mar 2025; Ethereum at its worst -6% at $2,166 threatening Apr 2025 lows; Solana at worst -5% at $96.

-The Yen’s aggressive rebound from Fri Jan 23rd through Tuesday Jan 27th, from 159 to 151 handle, turned out to only have officials’ jawboning and the Fri Jan 23rd NY Fed JPY rate check behind it. Late Friday’s Japan MOF monthly release showed that BOJ FX intervention operations confirmed to be zero Yen up through Jan 28th. Over the weekend the Japanese PM was interpreted to have ‘talked up' a weak Yen (Jan 31st in Kawasaki); Countering narrative her government was working to counter Yen decline. Today Takaichi's LDP + Ishin coalition seen to perhaps win >300 seats, which would create a stable govt and likely enable her policies to be fully implemented.

-No dovish voices seen in today’s BOJ summary of Opinions, focus seems to be on timing of a hike (last week 8-1 vote to hold rates at 0.75% last week, with one hawkish dissenter, Takata).

-Chips in Asia weak as Kospi fell -5%, with a program trading halt imposed as Hynix -6%, Samsung -4%, with Nikkei the only Asian index to eke out a positive return initially but Nikkei also then fell sharpy to -1.5%.

-China EV maker BYD -5% as it reported Jan vehicle sales -30% y/y and output -29%; Came amid lower Jan sales reported by a majority of China EV makers.

-WTI crude -6%, as eight OPEC+ members confirmed to maintain pause in oil output for March, as expected., but more pertinently No action seen over the weekend on US-Iran, with Pres Trump saying that Iran was “seriously talking to the US”, and hopes for Iran negotiating “something successful”.

-All Asia Manufacturing PMI’s all back to expansion, ex-China, where Official Manufacturing PMI fell back into contraction, however, today’s RatingDog Manufacturing PMI saw a second month of expansion.

-India FY27 budget sees nominal GDP at ~10%, with gross borrowing target set at a record high of INR17.2T. Some India analysts saw the higher capex funded through increased borrowing as risking tightened financial conditions by pushing up bond yields and the economy's cost of capital. Comes amid record lows for the Rupee as USD/INR ~92.0.

-US Senate passed a $1.2T funding deal to keep the govt open, if the House votes to pass on Monday the feared govt “shutdown” from end-January will be extremely brief and of minimal impact.

-US Truflation proxy fell to 0.86%, lowest since 2020.

-Focus on Australia’s RBA tomorrow, where late last week odds were tracking at ~70% for a rate hike back up to 3.85% on hotter inflation and jobs data. If RBA does hike, it would be the first major central bank to embark on rate hike path after the global CB cuts through 2025.

-UK BOE and EU ECB rate decisions also due this week (both expected to hold).

-This week in the US will see lots of jobs data; ADP, JOLTS and ISM jobs component leading into Nonfarm Payrolls data on Friday (+65Ke).

- US equity FUTs -1.1% to -1.5% during Asia trading.

Looking ahead (Asian-weighted focus, using Asian timezone)

-Mon Feb 2nd Global Mfng PMIs, (Mon eve US Jan ISM Mfng),

-Tue Feb 3rd KR Jan CPI, AU RBA rate decision, (Tue night US Dec JOLTS).

-Wed Feb 4th NZ Q4 jobs, CN Jan Services PMI, (Wed eve EU Jan CPI, Wed night US Jan ISM Services PMI).

-Thu Feb 5th AU Dec Trade Balance, ID Q4 & 2025 GDP, (Thus eve UK BOE rate decision, EU ECB rate decision).

-Fri Feb 6th JP Dec Household Spending, JP BOJ Masu speech, (Fri night US Jan Nonfarm Payroll, US Michigan Consumer Sentiment).

-Sun Feb 8th Japan and Thailand elections.

Holidays in Asia this week

-Mon Feb 2nd Malaysia.

-Fri Feb 6th New Zealand.

Headlines/economic data

Australia/New Zealand

- ASX 200 opens -0.6% at 8,819.

- Australia Jan Final PMI Manufacturing: 52.3 v 52.4 prelim (confirms 3rd month of expansion).

- Australia Jan Cotality Home Value M/M: 0.7% v 0.4% prior.

- Australia Jan Melbourne Institute Inflation M/M: 0.2% v 1.0% prior; Y/Y: 3.6% v 3.5% prior.

- Australia Jan ANZ-Indeed Job Advertisements M/M: +4.4% v -0.8% prior.

China/Hong Kong

- Hang Seng opens -1.1% at 27,097; Shanghai Composite opens -0.9% at 4,079.

- China Jan Manufacturing PMI (GOVT official): 49.3 V 50.1E (moves back into contraction); Non-manufacturing PMI: 49.4 v 50.3e (moves back into contraction) [weekend update].

- China Jan RatingDog PMI Manufacturing: 50.3 V 50.0E (Second month of expansion).

- China President Xi calls for China yuan to attain global reserve currency status - FT [update].

- China CSI SSH Gold Equity Index expected to decline by >9%.

- Macau Jan (MOP) Casino Rev: 22.6B, +24% y/y - update.

- China PBOC sets Yuan reference rate: 6.9695 v 6.9678 prior.

- China PBOC Open Market Operation (OMO): Injects CNY75B; Net drains CNY76B v injects CNY353B prior.

Japan

- Nikkei 225 opens +0.5% at 54,575.

- Japan MOF Foreign Exchange Intervention Operations confirmed to be Zero Yen up through Jan 28th - official MOF release [weekend update]

-Nikkei to cap company ratio in 225 Index from Apr 1st [targeting largest components of the Nikkei 225] [late Fri update].

- BOJ Jan Summary of Opinions (MPM): One member said if overseas interest rate environments change this year, there is a risk that the Bank may unintentionally fall behind the curve.

- Japan Jan Final PMI Manufacturing: 51.5 v 51.5 prelim (confirms 1st expansion in 7 months).

- UAE Pres said to have canceled state visit to Japan - NHK.

Korea

- Kospi opens -1.9% at 5,123

- South Korea halts sell orders for program trading for Kospi Index.

- South Korea Jan PMI Manufacturing: 51.2 v 50.1 prior (2nd month of expansion).

- Bank of Korea (BOK) sells KRW500B in zero-coupon 3-month Monetary Stabilization Bonds (MSBs): Yield: 2.495%.

- South Korea Jan Trade Balance: +$8.7B (12th month of surpluses).

- South Korea sells KRW1.55T in 3.00% 2-year Bonds: Avg Yield: 3.10%.

Other Asia

-(IN) India Finance Minister Sitharaman: FY27 Nominal GDP seen ~10%; Set FY27 Net market borrowing at INR11.7T; Gross market borrowing at INR17.2T; Fiscal deficit target seen at 4.3% of GDP - budget statement [weekend update].

- (ID) Indonesia Dec Trade Balance: $2.5B v $2.5Be; Exports Y/Y: 11.6% v 1.0%e.

- (TW) Taiwan Jan PMI Manufacturing: 51.7 v 50.9 prior (2nd month of expansion).

- (ID) Indonesia Jan PMI Manufacturing: 52.6 v 51.2 prior (6th month of expansion).

- (MY) Malaysia Jan PMI Manufacturing: 50.2 v 50.1 prior (3rd month of expansion).

- (PH) Philippines Jan PMI Manufacturing: 52.9 v 50.2 prior (2nd month of expansion).

- (TH) Thailand Jan PMI Manufacturing: 58.3 v 57.4 prior (9th month of expansion).

- (VN) Vietnam Jan PMI Manufacturing: 52.5 v 53.0 prior (7th month of expansion).

- (SG) Singapore MAS: To release Monetary Policy Statement no later than Apr 14th, 2026.

- (PH) Philippines Finance Min: Happy with fundamentals and credit ratings.

- (PH) Philippine House Committee reportedly sees Marcos impeachment "sufficient in form" - Financial Press.

- (PH) Philippines' Cab Sec Go: Sets Pesos (PHP) Primary spending limit at PHP1.4T - financial press.

North America

- TRUFLATION PROXY OF US AGGREGATED INFLATION INDEX DROPS TO 0.86% (LOWEST SINCE 2020) V 1.24% W/W V 2.5% M/M [weekend update].

- Trump: Iran is seriously talking to the US; I hope Iran negotiates something acceptable.

- Senate passes $1.2T govt funding deal; House expected to vote as soon as Monday on the plan after a brief govt shutdown - press [weekend update].

- Fed's Bowman (voter, dove): Supported rate pause as inflation remains elevated; Downside risks to labor market have not diminished [weekend update].

- Fed's Musalem (non-voter): Further rate cuts not advisable, policy is now neutral and economy doesn't need stimulus - speech text.

- Jan Chicago Purchase Managers Index (PMI): 54.0 V 43.7E (first expansion and highest reading since Nov 2023).

Europe

- (UK) PM Starmer: Will utilize expected May 2026 summit with EU to continue to dismantle Brexit - FT [weekend update'].

- WorldACD Weekly Air Cargo Trends (week 4): Demand stabilizes ahead of Lunar New Year.

- (UK) UK to reconsider joining EU defense fund - FT.

Levels as of 00:20 ET

Nikkei 225 -0.8%; ASX 200 -1.0%; Hang Seng -2.6%; Shanghai Composite -1.4%; Kospi -4.5%.

Equity S&P500 Futures -1.1%; Nasdaq100 -1.4%; DAX +1.0%; FTSE100 +0.5%.

EUR 1.1875-1.840; JPY 0.6461-0.6431; AUD 0.6971-0.6921; NZD 0.6034-0.5993.

Gold -4.4% at $4,650/oz; BTC -3.8% at $75,640, Crude Oil -4.9% at $62.02/bbl; Copper -3.5% at $5.7165/lb.