CFTC Announces Crypto Industry Forum for Digital Asset Pilot Program

Source：Actionforex

A view of the International Monetary Fund (IMF) logo at its headquarters in Washington, D.C., Nov. 24, 2024. Reuters-Yonhap

Korea's economy rebounded in 2024 after a sharp slowdown the previous year, but its outlook remains uncertain as risks are tilted to the downside, the International Monetary Fund (IMF) said in a report released Friday.

"Economic growth has recovered from a sharp slowdown in 2023, inflation has reached the target, and financial stability risks have decreased," the IMF said in its latest report, attributing the progress to the local authorities' swift policy responses.

The assessment was based on an IMF team's annual meeting with Korea's finance ministry, the Bank of Korea (BOK) and other relevant institutions during its visit to Seoul in November to discuss the country's economic conditions and policy measures.

Despite the recovery, the IMF warned that downside risks have increased due to high uncertainty surrounding policy shifts in major trading partners, including the United States.

The report also highlighted the domestic political unrest stemming from President Yoon Suk Yeol's failed attempt to impose martial law in December and his subsequent impeachment.

The report said other risks facing Asia's fourth-largest economy included slowing global demand for semiconductors, higher global commodity price volatility and the intensification of geopolitical conflicts.

Korea's economy is estimated to have grown 2.2 percent in 2024, supported by strong exports despite relatively weak domestic demand, according to the IMF.

Inflation declined to 1.9 percent in December 2024, reflecting the easing of global supply chain disruptions, lower global oil prices and the central bank's restrictive monetary policy stance, the report said.

The IMF further forecast that inflation will remain close to the BOK's 2 percent target in 2025 as the output gap closes.

The country's current account surplus improved significantly in 2024, driven by recovering global semiconductor demand, the report noted.

"It is expected to normalize in 2025 as export growth moderates and import growth picks up in response to strengthening domestic demand," the report concluded.

Source: Koreatimes

Week in Review: Tariff Fears Sees Inflation Expectations Rise

Markets had an interesting end to the week with a mixed bag of jobs data leaving a lot to be desired. However, in 2025 Fridays have proven anything but disappointing thus far, and this week did not disappoint.

A significant uptick in inflation expectations was seen with the release of the preliminary Michigan consumer sentiment data. Inflation expectations for the next year jumped to 4.3%, the highest since November 2023, up from 3.3%. This is only the fifth time in 14 years that year-ahead inflation expectations have risen by one percentage point or more in a single month.

Many people are worried that high inflation could make a comeback within the next year. Meanwhile, long-term inflation expectations also increased slightly to 3.3%, the highest since June 2008, up from 3.2%.

Source: University of Michigan

There was also an impact on the overall sentiment, with the report showing sentiment in the US dropped to 67.8 in February 2025 from 71.1 in January. This was below expectations of 71.1. It marks the second month of declines, with sentiment hitting its lowest level since July 2024.

The current economic conditions index fell to 68.7 from 74, while the expectations index also dropped to 67.3 from 69.3. Additionally, views on buying durable goods fell by 12%, partly because many believe it’s too late to avoid the negative effects of tariff policies.

This news actually had a bigger impact on the markets than the actual NFP and jobs report which was highly anticipated.

The Labor Department reported that the U.S. economy added 143,000 jobs in January, which was less than the 170,000 jobs economists had predicted. The unemployment rate was 4%, slightly better than the expected 4.1%. However, the data also showed that the economy created 598,000 fewer jobs in the year up to March than previously estimated.

In the aftermath of the data releases we saw the US indices surrender the initial gains made to trade lower on the day. The S&P 500 was down around 0.83% while the Nasdaq was trading down around 1.15%.

My take on the data is that there is just enough in the data to stoke some concern in the minds of market participants.

On the FX Front, there was a solid end to the week for the US Dollar Index (DXY) after the rise in inflation expectations. The Dollar looked on course to end the week with a whimper before finishing the week strong and dragging all dollar denominated majors lower.

EUR/USD and GBP/USD both struggled on Friday with cable in particular surrendering some of its weekly gains.

Gold rose to print fresh all time highs once more before falling hard following the Michigan data release as well. Gold surrendered its all time high at 2886 before trading at 2858 at the time of writing.

Oil on the other hand enjoyed a rather mixed week but is set to conclude its third consecutive week of losses with Brent trading at 75.00 at the time of writing. Fear around Iranian sanctions were overcome by tariffs and how they may impact growth and thus global demand.

Weakening Oil demand remains an even greater concern following the arrival of the Trump administration and a period of tariff uncertainty.

The Week Ahead: US CPI and Powell Testimony to Dominate

Asia Pacific Markets

The main focus this week in the Asia Pacific region is tariff developments and inflation data from China.

From China, the key event to watch is whether China and the US hold high-level talks soon. Currently, the US has added 10% tariffs on Chinese goods, though exemptions for items in transit mean the impact may take time.

China plans to impose its own tariffs on February 10, leaving a short window for potential negotiations to ease tensions. President Trump did say on Friday that he will probably meet Xi Jinping soon but no date has been given as yet.

On the data side, China will release January’s CPI inflation on Sunday. A slight increase to 0.4% YoY is expected, driven by higher food prices from the Lunar New Year, while non-food inflation is likely to stay low. The People’s Bank of China will also report January’s credit activity data next week.

Europe + UK + US

In developed markets, the US CPI release and testimony from Fed Chair Jerome Powell will dominate proceedings. We will also get a glimpse into the growth picture for both the UK and EU this week. GDP growth continues to plague the Euro Area, with Eurozone GDP Preliminary data being released on Friday.

US inflation data is expected to show a 0.3% monthly rise in both headline and core measures. Food and energy costs, housing prices, and rising vehicle prices are driving this increase. While tariffs have been paused for now, there’s a chance they could return later this year, keeping inflation high. This makes it unlikely the Fed will cut rates before June.

Fed Chair Jerome Powell will testify to Congress as the Fed releases its semi-annual monetary policy report. I expect the report to touch on the uncertainty caused by Trump’s policies but confirm that further rate cuts depend on economic data. Despite Trump’s initial rhetoric of pressure on the Fed, recent suggestions by his administration is that such a move is unlikely.

UK GDP data is due on Thursday with growth likely to have slowed in the second half of last year, and fourth-quarter GDP likely flat. Growth may improve in 2025 due to higher government spending, but it’s expected to fall short of the 2% forecast by the Office for Budget Responsibility. This, along with potential data revisions, adds pressure to the Treasury’s March Spring Statement, especially as rising debt costs have reduced fiscal flexibility.

This week’s focus is on the US Dollar Index (DXY) after it recovered late on Friday and is looking like it is ready to print a fresh high.

The rising inflationary expectations may get a nod if US CPI comes in higher than expected, while any new tariff announcements will likely add to the USDs appeal.

Looking at the technical picture, the DXY has printed a higher low on the daily timeframe hinting at the possibility of a change in structure. The daily candle on Friday is struggling to close above the key 108.00 resistance level however, with a close above likely to give bulls confidence that further gains may materialize.

Failure to do so could see the DXY retest the 107.00 handle in the early part of next week which may add a further dimension to the US CPI release.

US Dollar Index Daily Chart – February 7, 2025

Source:TradingView.Com (click to enlarge)

Key Levels to Consider:

Support:107.00/106.13/105.63

Resistance:108.49/109.52/110.00

Source: ACTIONFOREX

The European Union is currently discussing a deal to partially suspend several sanctions on Syria’s energy industry, including scrapping bans on importing crude from the country. Last month, in a non-paper, the EU proposed the removal of “export ban on oil and gas technology, as well as restrictions on export and participation in infrastructure projects and financing.” An informal EU document is used by member states in closed door negotiations.

According to the paper, the EU was also considering a possible delisting of Al-Qaeda-related factions such as Hay'at Tahrir al-Sham (HTS) as terrorist groups, a move that must be decided at UN Security Council level before being implemented by the EU. HTS--a former Al-Qaeda branch in Syria that was linked to ISIS in the region–led the fall of the Bashar al-Assad regime. EU countries are also mulling lifting restrictions on airlines, such as the Syrian Arab Airlines, in order to “facilitate civilian flight operations between the EU and Syria”.

EU Regulation 36/2012 has imposed various restrictions on Syria’s energy sector including:

Prohibition on the transport of crude oil and petroleum products of Syrian origin

Prohibition on the provision of key equipment and technology for use in the oil and gas industry in Syria,

Prohibition on the provision of insurance and reinsurance to Syrian persons and entities

The United States has imposed similar sanctions, including bans on:

Exporting, re-exporting, selling or supplying directly or indirectly, of any services to Syria

Importing or dealing in Syrian-origin petroleum or petroleum products

Making new investments in Syria

Syria is facing an energy crisis after Iraq suspended crude oil deliveries to Syria In December. “Iraq has decided to stop providing Syria with crude oil starting this month,” Iraqi member of Parliament Mustafa Sanad said shortly after the overthrow of Assad.

Prior to the decision by Baghdad, Syria was importing some ~120,000 barrels of Iraq crude daily. Meanwhile, supplies of crude oil from Iran have also ended following the news of the change in power in Syria. Fuel prices in Syria have skyrocketed due to acute shortages during the transitional period.

Source: OILPRICE

WASHINGTON (Feb 8): President Donald Trump on Friday pushed Japan to invest in US energy and technology, showered his closest Asian ally with praise and sought a way out of a dispute over a Japanese bid for US Steel during Prime Minister Shigeru Ishiba's first White House visit.

Trump announced progress on Nippon Steel's blocked US$14.9 billion (RM66.16 billion) attempt to take over US Steel, which he has long opposed.

Trump said Nippon was now looking at an "investment not a purchase," and added, "I'm okay with that, sure." US Steel shares traded down about 6%. The companies did not comment, although two sources close to the deal told Reuters Nippon Steel had not withdrawn its bid to buy the US firm.

The US-Japan talks come as escalating trade tensions in the aftermath of Trump's January inauguration threaten to rupture the global economy. On Friday, Trump unveiled plans next week to impose reciprocal tariffs on many countries. It was unclear if they would apply to Japan.

Trump pressed for Tokyo to close its US$68.5 billion trade surplus with Washington but expressed optimism this could be done quickly, given a promise by Ishiba to bring Japanese investment in the US to US$1 trillion as well as new purchases of US-produced liquefied natural gas, ethanol and ammonia.

Japan had the largest foreign direct investment position in the United States in 2023 with US$783.3 billion, followed by Canada, and Germany, according to data from the US commerce department.

In a press conference, Trump also said the Japanese had expressed interest in a US$44 billion gas pipeline in Alaska, but a Japanese official privately told Reuters they still nursed doubts about the project's viability.

Tensions

The Republican US president, whose first three weeks in office have shredded norms and shaken foreign capitals from Ottawa to Bogota, has taken a more conventional approach to Washington's longstanding Asia-Pacific allies, including Japan, South Korea, Australia and the Philippines.

That approach was on display in a joint statement between the leaders that borrowed liberally from language the countries used under former President Joe Biden.

It included familiar language expressing similar views opposing Chinese military actions in the South and East China Seas, as well as the Taiwan Strait, support for Japanese security, concern over North Korea and Russia.

Trump and Ishiba exchanged compliments during a joint press conference and the US president agreed to travel to Japan in the near future.

"On television, he is frightening and he has a very strong personality," Ishiba said at the press conference, drawing laughter from Trump. "But when I met with him, actually, he was very sincere and very powerful."

As the two sat together in the Oval Office, Trump told reporters the countries would work together to get US trade deficit with Japan down to "even" from its current level.

"Should be pretty easy to do," he said. "I don't think we'll have any problem whatsoever. They want fairness too."

Ishiba highlighted investment plans by Japanese firms Toyota and Isuzu. Asked about the possibility of tariffs, Ishiba said he was "unable to respond to a theoretical question."

Trump said that after Friday's meeting, he was "confident that the cherished alliance between our two countries and others also will continue to flourish long and into the future."

China trade

Trump's early fight with China over synthetic opioids and warnings of tariffs against other countries — Japan included — have threatened to disrupt commercial relations in Asia and beyond.

Trump put a 10% tariff on all imports from China in what he called an "opening salvo" in a clash between the world's two largest economies, sending consumers and businesses scrambling to adjust.

Trump spoke to Chinese President Xi Jinping days before taking office and has said he will discuss tariffs with him soon.

Japan is especially trade-dependent. A major exporter, it counts on imports for much of its food and natural resources, and many of its firms are deeply invested in and reliant on China.

Trump was close with the late Japanese Prime Minister Shinzo Abe but has no relationship with Ishiba, who took office in October. Analysts said the early White House visit for Ishiba may be a promising signal.

"Japanese Prime Minister Ishiba's mission was to get in Donald Trump's good graces and he seems to have succeeded splendidly," said Danny Russel, vice president of the Asia Society Policy Institute.

"Ishiba handled the notoriously impulsive Trump masterfully, and in doing so likely bought Japan some time and goodwill."

But Russel said Japan's increased purchases were unlikely to come close to wiping out the two country's trade imbalance.

Source: Theedgemarkets

President Donald Trump said on Friday he plans to announce reciprocal tariffs on many countries by Monday or Tuesday of next week, a major escalation of his offensive to tear up and reshape global trade relationships in the US' favour.

Trump did not identify which countries would be hit but suggested it would be a broad effort that could also help solve US budget problems.

"I'll be announcing that, next week, reciprocal trade, so that we're treated evenly with other countries," Trump said. "We don't want any more, any less."

The move would fulfil Trump's campaign promise to impose tariffs on American imports equal to rates that trading partners impose on American exports.

Trump made the announcement during a meeting with visiting Japanese Prime Minister Shigeru Ishiba. He said auto tariffs remained on the table amid reports that the White House was weighing potential exemptions.

The new US president has long complained about the European Union's 10% tariffs on auto imports being much higher than the US car rate of 2.5%. He frequently states that Europe "won't take our cars" but ships millions west across the Atlantic every year.

The US, however, enjoys a 25% tariff on pickup trucks, a vital source of profits for Detroit automakers General Motors, Ford and Stellantis' US operations.

In recent confirmation hearings, Trump's Commerce secretary nominee Howard Lutnick voiced concerns about India's high tariff rates, while US Trade Representative nominee Jamieson Greer discussed US complaints about Vietnam's and Brazil's tariffs and trade barriers.

The US trade-weighted average tariff rate is about 2.2%, according to World Trade Organization data, compared to 12% for India, 6.7% for Brazil, 5.1% for Vietnam and 2.7% for European Union countries.

Trump told Republican lawmakers of his plans during budget discussions at the White House on Thursday, three sources familiar with the plan told Reuters. Trump and top aides have said they plan to use higher tariffs on foreign imports to help pay for extending Trump's 2017 tax cuts, which independent budget analysts say could add trillions of dollars to the US debt.

Increased tariffs could offset some of that cost, though they have only accounted for about 2% of annual revenues in recent years.

Trump announced tariffs of 25% on Canada and Mexico on Saturday but delayed them after a negative reaction from investors. The two largest US trading partners agreed to increase enforcement efforts at the border, a top Trump priority.

Wall Street extended losses on Friday following the Reuters report of Trump's discussion with lawmakers.

US consumer sentiment dropped to a seven-month low in February, and attitudes soured among Republicans as households took stock of what they believe will be a surge in inflation from Trump's tariffs.

Trump and his Republicans aim to unveil their ambitious tax and spending package this weekend. It faces a perilous path through Congress, where Republicans hold narrow majorities in the House of Representatives and the Senate. Republicans are expected to rely on arcane budget rules to bypass Democratic opposition, which will require them to work in lockstep.

Trump is due to have dinner with Senate Republicans on Friday and attend the Super Bowl with House Speaker Mike Johnson on Sunday.

In his confirmation hearing on Thursday, Greer said other countries will need to reduce barriers to US exports if they want to maintain access to the US market, citing Vietnam in particular.

"I need, if I'm confirmed, to go to these countries and explain to them that if they want to enjoy continued market access to the United States, we need to have better reciprocity," Greer said.

Source: Theedgemarkets