Taiwan Commits $250 Billion To U.S. Chipmaking In Strategic Trade Reset

Energy – Brent flat price weakens while timespreads hold firmer

After five days of gains, oil prices came under significant pressure yesterday, with ICE Brent settling 4.15% lower. The sell-off came as the US avoided taking immediate action against Iran amid ongoing protests in the country. There had been growing noise in recent days that the Trump administration was considering military intervention, raising concerns not only over Iranian supply, but broader risks to supply from the Persian Gulf. Any escalation with Iran will also raise concerns about potential disruption to oil flows through the Strait of Hormuz, a chokepoint where around 20m b/d passes.

While risks have eased somewhat, they remain significant, keeping the market nervous in the short term. However, the longer this goes on without any US intervention, the risk premium will continue to fade, allowing more bearish fundamentals to dominate.

While we maintain a bearish outlook for the market, we are seeing strength in the prompt ICE Brent timespread. The spread held up relatively well yesterday despite weakness in the flat price. This suggests some tightness in the spot market, likely due to a decline in Kazakh oil flows from the CPC terminal.

The European gas market continued to rally yesterday. TTF settled more than 4.2% higher on the day, taking the market back above EUR33/MWh. The move was driven by another cold snap forecast for large parts of Europe towards the end of this month. Meanwhile, EU gas storage remains tighter than usual, with it less than 52% full at the moment vs. a 5-year average of 67% full. We have been warning about the potential for a short-covering rally in the market, given the sizeable short position that funds held in TTF through the early part of winter. Investment funds have already reduced their net short in TTF from 92.76TWh in mid-December to 55.14TWh currently.

Agriculture – Cocoa prices decline on weaker grindings

Cocoa prices came under further pressure yesterday, with London cocoa settling 2.3% lower on the day. This follows weaker-than-expected grinding data from Europe. Data from the European Cocoa Association shows that cocoa grindings fell 8.3% year on year to 304.5mt in 4Q25, the lowest for this period since 2013. This leaves total grindings for 2025 down 6.1% YoY.

National Federation of Cooperative Sugar Factories Ltd. data shows that sugar production in India jumped 21% YoY to 15.9mt between 1 Oct 2025 and 15 Jan 2026. Factories crushed 176.4mt of cane over the period compared to 148.4mt a year ago. The average sugar recovery from cane was 9% vs 8.8% in the last season. Meanwhile, around 519 mills were crushing as of 15 January, slightly up from 514 mills last year. The group reiterated its 2025/26 total sugar production estimate of 31.5mt, accounting for volumes diverted to ethanol.

In its monthly update, the International Grains Council (IGC) increased its 2025/26 global wheat output forecasts from 830mt to 842mt. Consumption projections increased to 823mt from previous estimates of 819mt. As a result, global wheat ending stock estimates increased from 275mt to 283mt. For soybeans, ending stock estimates remain unchanged at 77mt. Finally, for corn, the council increased its global ending stocks estimate from 300mt to 305mt on stronger production forecasts.

Source: ING

Bolsonaro's lawyers have been pushing for a transfer to house arrest on medical grounds

Brazil's Supreme Court has ordered the transfer of former President Jair Bolsonaro from the federal police headquarters in Brasilia to a prison complex where he will enjoy "more favorable conditions."

At the prison, the 70-year-old will have a 54-square-meter (581-square-foot) room with a 10-square-meter outside area that he can access at will.

The new cell is much bigger than the 12-square-meter-room he had been in previously. It includes a ​bedroom, a bathroom, a kitchen and a living room, the court said.

The 70-year-old former leader will also have increased time for family visits.

Furthermore, physiotherapy equipment, such as a treadmill and a bicycle, will be installed.

Not a 'hotel stay or a vacation colony'

The move comes after repeated complaints from Bolsonaro's family about the conditions of his detention.

They said Bolsonaro was being mistreated and not getting adequate medical attention.

Supreme Court Justice Alexandre de Moraes denied the accusations.

The judge said Bolsonaro was convicted of extremely serious crimes and that his custodial sentence was not a "hotel stay or a vacation colony."

He also said, "There has been a systematic attempt to delegitimize the regular and lawful execution of the custodial sentence of Jair Messias Bolsonaro."

Push for house arrest

The former president is serving a 27-year prison sentence for orchestrating a failed coup following his 2022 election loss to Luiz Inacio Lula da Silva.

Bolsonaro has always denied wrongdoing.

His lawyers have been pushing for a transfer to house arrest on medical grounds.

Since starting his sentence, Bolsonaro has made several trips to a nearby hospital.

Earlier this month, he underwent tests after a fall in prison, but no serious injury was revealed.

Brazilians will go to the polls to elect a new president in October, and Lula is seeking a fourth term in officeImage: Andre Penner/AP Photo/picture alliance

Lula vetoes bill to reduce Bolsonaro's jail term

Brazil's Congress late last year passed a bill that would have reduced Bolsonaro's time in jail from 27 years to two.

But President Lula vetoed the legislation on January 8.

Lawmakers will still have the final say, as Congress has the right to override his veto.

Brazilians will go to the polls to elect a new president in October, and Lula is seeking a fourth term.

Bolsonaro, meanwhile, has anointed his eldest son, Senator Flavio Bolsonaro, as his political heir and presidential candidate.

Source: DW

Heavy rainfall in northeast Australia has triggered floods that are hampering mine operations and disrupting supplies of metallurgical coal in the region.

Some coal miners have declared force majeure on portions of their shipments or warned customers of potential delays, according to traders, who asked not to be named as they are not authorized to speak to the media. The companies include Stanmore Resources Ltd., GM3 — a joint venture between Golden Energy and Resources and M Resources Ltd. — as well as Pembroke Resources Pty Ltd. and Fitzroy Coal Sales Pty Ltd.

Major miners such as Anglo American Plc and Glencore Plc have also been impacted but have not declared force majeure, the traders said. Argus Media reported that the road and rail disruptions had limited Glencore's ability to supply copper concentrate for multiple days.

The disruptions follow an unusually wet start to summer in Queensland state, where some areas have seen rainfall close to their monthly precipitation averages weeks earlier than normal, due in part to Tropical Cyclone Koji.

Forecasters are warning that another weather system could form over the region from Monday, potentially compounding the impact on mining and transport operations.

Elsewhere in Australia, heavy rain is affecting parts of Victoria, with flash floods sweeping away cars on Great Ocean Road.

Stanmore, GM3, Pembroke, Fitzroy Coal, Anglo and Glencore did not immediately respond to requests for comment.

Source: Bloomberg Europe

Recent trade data reveals a significant shift in India's export strategy, with shipments to China surging while those to the United States are declining. This pivot comes as New Delhi navigates the impact of steep U.S. tariffs and actively seeks to diversify its markets.

In December, India's exports to China skyrocketed by 67% to reach $2 billion. In sharp contrast, goods shipped to the U.S.—historically India's largest export market—fell by 1.8% to $6.8 billion. The shift follows the imposition of 50% tariffs by the U.S. on Indian goods, among the highest for any country and a move that has strained economic and diplomatic ties.

China's Rise as a Top Trading Partner

The trend extends beyond a single month. During the first nine months of the fiscal year ending March 2026, India's exports to mainland China have climbed by nearly 37%, with shipments to Hong Kong also jumping by over 25%.

This growing economic relationship has been supported by a diplomatic thaw. Relations have been warming since Prime Minister Narendra Modi and Chinese President Xi Jinping met at the Shanghai Cooperation Organization summit in September, sharing a vision of partnership over rivalry. More recently, India's Foreign Secretary Vikram Misri met with Sun Haiyan, a Vice Minister of the Communist Party of China, to discuss stabilizing bilateral ties with a focus on business.

According to India's commerce ministry, China has now overtaken the U.S. as India's largest goods trading partner. Between April and December 2025, bilateral trade with China totaled $110.20 billion, eclipsing the $105.31 billion in trade with the U.S.

The Widening Deficit and Surplus Divide

While trade with China grows, it presents a significant challenge for India: a massive trade deficit. This stands in stark contrast to its trading relationship with the United States.

• With the U.S.: New Delhi enjoys a trade surplus, which stood at over $26 billion from April to December.

• With China: The trade deficit has been soaring, reaching $81.7 billion over the same period.

For the full fiscal year 2025, India's trade with Washington was $131.84 billion, while trade with its Asian neighbor was $127.71 billion, not including Hong Kong.

The Elusive U.S. Trade Deal

Hopes for resolving trade friction with Washington hinge on a potential deal that has so far remained elusive. India's Trade Secretary, Rajesh Agrawal, recently stated that New Delhi was "very near" to finalizing an agreement but declined to provide a timeline.

The U.S. side has offered conflicting accounts. U.S. Commerce Secretary Howard Lutnick claimed a deal fell through because Prime Minister Modi did not call President Trump, an assertion the Indian side has called "inaccurate." Meanwhile, the new U.S. Ambassador to India, Sergio Gor, acknowledged that finalizing a deal is "not an easy task" but affirmed that Washington is "determined to get there."

India's Broader Diversification Strategy

Faced with U.S. tariffs and an ambition to become an export powerhouse, India is actively diversifying its trade relationships.

According to Trade Secretary Agrawal, the country is close to signing a long-awaited trade pact with the European Union this month. Since the U.S. tariffs were announced, India has also secured trade agreements with the UK and Oman, with another deal with New Zealand expected to be signed in the first half of 2026.

S. C. Ralhan, president of the Federation of Indian Export Organisations, emphasized the success of this strategy, noting that India has a "well-diversified and resilient export footprint." He listed the UAE, China, Netherlands, UK, and Germany as top destinations alongside the U.S.

Ralhan added that this diversification is "particularly critical at a time when global trade routes are being reshaped due to geo-political conflicts, sanctions, shipping disruptions and strategic realignments."

Three U.S. House Democrats are accusing the Securities and Exchange Commission of retreating from its enforcement duties in the crypto sector and calling on Chairman Paul Atkins to explain its pullback from high-profile crypto cases — including the case against Tron founder Justin Sun.

In a Thursday letter to Atkins, House Representatives Maxine Waters, Sean Casten, and Brad Sherman expressed alarm over the SEC's dismissal of more than a dozen crypto-related cases since early 2025, including litigation against Binance, Coinbase, and Kraken.

"Given the industry's history of investor-harm and the clear mandate of the securities laws to protect market participants, this turn raises troubling questions about the SEC's priorities and effectiveness," the letter said.

The lawmakers argued that the SEC's retreat has coincided with a surge in political spending by crypto firms, creating what they described as an "unmistakable inference of a pay-to-play scheme."

According to the letter, crypto companies donated at least $85 million to President Trump's reelection campaign, while firms whose enforcement actions were dismissed in 2025 — including Coinbase, Kraken, Ripple, Robinhood, and Crypto.com — each contributed at least $1 million to Trump's inauguration.

Pressing Sun

The lawmakers focused particular attention on the SEC's pause of its enforcement action against Justin Sun, saying the extended pause in the agency's enforcement suggests that politically connected figures may be securing preferential treatment.

They noted that Sun invested more than $75 million in Trump-linked crypto ventures, including World Liberty Financial, in late 2024 and early 2025.

Sun was sued in 2023 for allegedly orchestrating the unregistered offer and sale of crypto securities, manipulating trading volumes, and engaging in unlawful celebrity promotion. In February 2025, the SEC requested a stay to explore a potential settlement.

"The SEC's request to stay the Sun case, which has now been in place for 11 months, signals to the market that securities laws are enforced selectively, and that those with sufficient political influence can evade accountability," the lawmakers wrote.

The Democratic lawmakers also raised national security concerns about Sun's alleged ties to China, pointing to his involvement in research programs at China's Central Party School, publications in state media platforms, and his past claims of connections to Chinese officials.

Alongside the letter, the lawmakers issued a separate document preservation request for all communications related to the decision to pause the Sun litigation, including any contacts with third parties attempting to influence the outcome.

The Block has reached out to a spokesperson representing Sun for comment.

Source: TradingView

Canadian Prime Minister Mark Carney is meeting with China's top leadership, including President Xi Jinping, in a significant move to reshape global partnerships. The visit comes as Canada navigates strained relations with the United States following disruptive trade policies implemented by Donald Trump.

A Strategic Pivot to Beijing

Marking the first visit to China by a Canadian leader in eight years, Carney is signaling a clear strategic shift. During a meeting on Thursday, he told Chinese Premier Li Qiang, "I believe the progress we have made in this partnership sets up well for the new world order."

Carney's scheduled talks with President Xi on Friday follow a pattern of Western leaders, including the UK's Keir Starmer and Germany's Friedrich Merz, seeking to rebuild ties with Beijing after a trade truce between the U.S. and China stabilized relations.

Expanding Bilateral Trade and Investment

Since taking office last year, Carney has focused on resetting relations and deepening trade with the Asian economic superpower. The high-level meetings build on a recently unveiled agreement designed to expand bilateral commerce in several key areas:

• Energy

• Lumber

• Cultural exchanges

• Pet food exports

On Thursday, Carney also met with executives from major Chinese corporations, including China National Petroleum Corp. and the electric vehicle battery manufacturer Contemporary Amperex Technology Co. Ltd. (CATL).

Navigating the US-China Balancing Act

The diplomatic outreach to China occurs against a complex geopolitical backdrop. Carney has frequently described the Canada-US relationship as having suffered a historic "rupture" due to an array of tariffs imposed by Trump.

This creates a delicate situation for Canada, which faces difficult negotiations with the Trump administration over the North American free trade pact. Complicating matters, U.S. officials have been pressuring both Canada and Mexico to erect barriers against Chinese products as a precondition for those talks.

Lingering Trade Hurdles to Overcome

Despite the positive momentum, two major trade irritants remain unresolved between Canada and China. Ottawa hopes to convince Beijing to ease tariffs on its agricultural products. Meanwhile, Xi's government is pushing for Canada to roll back its own levies on Chinese-made electric vehicles.

A Shift from "Disruptive" to "Stable"

The change in Canada's official tone is stark. Canadian Industry Minister Melanie Joly told reporters on Thursday that the current objective is to bring "stability" to the relationship. This contrasts sharply with her assessment in 2022, when, as foreign minister, she called China an "increasingly disruptive global power."

In a pointed comparison, Joly added that the recent discussions in China have been more predictable than talks with other nations. "You know what? The conversations here have been more predictable and stable than sometimes with other countries, including our neighbor," she said.

Carney is expected to speak with reporters in Beijing later on Friday.