Xi and Putin Vow Deeper Alliance Amid Global Turmoil

Michael Ross

Russia-Ukraine Conflict

Economic

Remarks of Officials

Political

Summary:

Xi and Putin reaffirmed their strategic alliance, deepening ties against the West amidst global turbulence and economic shifts.

Chinese President Xi Jinping and his Russian counterpart Vladimir Putin reaffirmed their strategic partnership on Wednesday, hailing their deepening alliance as a key stabilizing force in an increasingly turbulent world.

In a video call, both leaders underscored their commitment to a united front against the West, building on ties that have grown closer since Russia's 2022 offensive in Ukraine. The discussion followed recent meetings between top officials from both nations, who agreed that their relationship could "break new ground" this year through expanded economic cooperation.

Figure 1: Russian President Vladimir Putin greets his Chinese counterpart Xi Jinping during a video conference, reinforcing the strategic partnership between Moscow and Beijing.

Xi told Putin that the international situation has become more turbulent since the start of the year. According to Chinese state broadcaster CCTV, Xi called for "deeper strategic coordination" to ensure that China-Russia relations "continue to develop steadily along the right track."

Addressing Xi as his "dear friend," Putin echoed the sentiment, stating that "the foreign policy alliance between Moscow and Beijing remains an important stabilizing factor." He described their comprehensive partnership as "exemplary," though neither leader specified the exact areas where they would increase coordination.

Economic Pivot and Strategic Silence on Ukraine

Putin praised the strong trade ties between the two countries, which have become crucial for Moscow as it redirects exports toward Asia. This economic pivot is a direct response to the massive sanctions imposed by Western nations following the Kremlin's military actions in Ukraine.

China has consistently avoided denouncing Russia's military campaign and has not called for a withdrawal of troops, a position that many of Ukraine's allies view as tacit support for Moscow.

The video conference occurred as Russian, Ukrainian, and U.S. negotiators were meeting in Abu Dhabi for another round of talks aimed at ending the conflict. However, Putin made no reference to Ukraine during his call with Xi.

Figure 2: The leaders' video call is broadcast on a public screen in Beijing, underscoring the high-profile nature of the China-Russia relationship.

This high-level communication follows several in-person meetings. The two leaders last met in September when Putin attended a military parade in Beijing. Xi had also visited Moscow in May of last year for Russia's World War II victory celebrations. More recently, on Sunday, China's Foreign Minister Wang Yi met with Russia's security chief Sergei Shoigu in Beijing, where Wang stressed the need to jointly uphold multilateralism and "advocate for an equal and orderly multipolar world."

China's Diplomatic Push and UN Commitment

The call with Putin is part of a broader diplomatic effort by Xi to consolidate international support, particularly as China navigates its relationship with an increasingly unpredictable United States.

During the discussion, Xi reiterated his commitment to the international system centered around the United Nations, where China holds a permanent, veto-wielding seat on the Security Council. This emphasis on the UN has been a consistent theme in his recent talks with leaders from France, Canada, Britain, and Brazil.

This focus comes after U.S. President Donald Trump announced plans in January for a "Board of Peace," raising concerns that Washington may seek to create an alternative to the United Nations.

Even while engaging with the UN, Beijing has pushed back against what it considers internal interference. It has also worked to position itself as a stable global partner, hosting Western leaders and U.S. allies who have been unsettled by Trump's policies, such as his tariff threats and his bid to acquire Greenland. In recent weeks, leaders from France, Canada, Finland, and Uruguay have all made visits to Beijing.

To stay updated on all economic events of today, please check out our Economic calendar

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Cryptocurrency

Almost half a trillion dollars has been wiped off cryptocurrencies in less than a week as a selloff led by Bitcoin accelerated.

Total crypto market value has slumped by $467.6 billion since Jan. 29, according to CoinGecko data. Bitcoin on Tuesday tumbled to its lowest level since US President Donald Trump won re-election in early November 2024 and ushered in a more crypto-friendly administration.

The original cryptocurrency, which hit a 15-month low of $72,877 in the US, regained some ground Wednesday and was trading at around $75,900 as of 6:05 a.m. in New York.

Despite a pro-crypto White House and surging institutional adoption, Bitcoin has plummeted about 40% since rocketing to a record in early October. The rout follows a crippling series of liquidations on Oct. 10 that wiped out $19 billion in leveraged token bets, from which the broader crypto market has yet to recover.

“Although there has been some rebound since the start of Wednesday, the sequence of lower local highs and lows indicates that selling on the rise prevails in the markets,” Alex Kuptsikevich, FxPro chief market analyst, said in a note.

The declines follow a volatile week across global markets that also saw sharp swings in gold and silver. While precious metals found buyers on Tuesday after recent losses, cryptocurrencies failed to attract support. Bitcoin and US equities fell as rising tensions between the US and Iran prompted investors to seek safe assets.

Bitcoin’s plunge is raising doubts that it functions as a kind of “digital gold,” as it hasn’t acted as a safe haven during a period of heightened geopolitical uncertainty. Investor Michael Burry this week warned that Bitcoin has been exposed as a purely speculative asset, failing to establish itself as a hedge similar to precious metals.

In the past 24 hours, over $700 million in bullish and bearish crypto bets have been liquidated in the perpetual futures market, taking the total wipeout to over $6.67 billion since Jan. 29, CoinGlass data shows.

Flows to US-listed Bitcoin exchange-traded funds remain choppy. After seeing about $562 million in net inflows on Monday, investors pulled out $272 million from the group on Tuesday, according to data compiled by Bloomberg.

Historically, there’s been a “tremendous amount” of near-religious belief in holding on to Bitcoin no matter what, Michael Novogratz, chief executive officer of Galaxy Digital LP, said on an earnings call. “And somehow that virus or that fever broke, and you started seeing some selling.”

Source: Bloomberg

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Ukadike Micheal

Economic

Political

India and the United States are negotiating a trade agreement that would see the U.S. lower tariffs on Indian goods from 50% to 18%. In return, India would stop purchasing Russian oil and reduce its own trade barriers. While the broad strokes of the deal have been shared, specific details remain under wraps, particularly regarding the contentious issue of agricultural market access.

Key US Farm Exports Face a Closed Door

India is unlikely to reduce tariffs on major U.S. agricultural imports like corn, soybeans, and soymeal. The primary reason is the country's ban on genetically modified (GM) food crops, a standard for the vast majority of U.S. corn and soybean production. This fundamental difference severely limits the potential for American market penetration.

Furthermore, India’s import needs for these commodities are small compared to a country like China. India currently holds large domestic stockpiles of both corn and soymeal, which is used as animal feed. While it is the world's biggest importer of soyoil—sourcing mainly from Brazil, Argentina, and the U.S.—its purchases of raw soybeans are negligible.

Other key areas face similar resistance:

• Ethanol: India has sufficient domestic ethanol production from corn, rice, and sugarcane, making it improbable that it will agree to import U.S. ethanol or the corn needed to produce it.

• Dairy: The U.S. has pushed for greater access to India’s heavily protected dairy market. However, New Delhi is expected to keep this sector off-limits to protect the livelihoods of millions of small farmers. Indian officials point to the vast difference in scale, with the average Indian farmer owning just two to three animals compared to herds of hundreds in the United States.

Where India Might Offer Concessions

While core agricultural sectors are protected, India may be willing to lower trade barriers on a range of other products. These are typically items that do not directly threaten the income of a large number of Indian farmers.

Potential areas for concessions include:

• Almonds, walnuts, and pistachios

• Apples, pears, and berries

• Fruits and vegetables

• Wine and spirits

Since India is already dependent on imports for many of these premium goods, reducing tariffs would be an easier political move for Prime Minister Narendra Modi's government. A deal in these areas would also allow President Donald Trump's administration to claim a victory for American farmers by securing new market access.

The Political Power of India's Farmers

Agriculture is a deeply sensitive issue in India. Although the sector makes up just 15% of the country's nearly $4 trillion economy, it provides a livelihood for almost half of its 1.4 billion people.

Nearly 80% of farmers in India are smallholders who own two hectares of land or less, which limits their income potential. This massive population forms a powerful voting bloc that successive governments have been careful not to alienate.

Farmer advocacy groups are already mobilizing against the potential deal. The Samyukt Kisan Morcha, a coalition of farmers' organizations, and prominent leaders like Rakesh Tikait have begun to criticize the Modi government's trade negotiations with Washington, signaling the political challenges that lie ahead.

To stay updated on all economic events of today, please check out our Economic calendar

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Commodity

WTI Holds Steady as Middle East Tensions Offset Supply Concerns

WTI crude oil futures are trading steady-to-better early Wednesday as Middle East tensions offset concerns over supply. Although oversupply fears may be capping gains, the threat of military action between the United States and Iran is real enough to underpin prices. The geopolitical risk is real — prices jumped in reaction to news that the U.S. shot down an Iranian drone. If that wasn’t enough to rattle the market, armed Iranian boats reportedly approached a U.S.-flagged vessel in the Strait of Hormuz.

At 11:09 GMT, March WTI Crude Oil futures are trading $63.54, up $0.33 or +0.52%.

Just two weeks ago, crude oil prices rose as the U.S. moved an armada into the Strait. But oil retreated at the start of this week after President Trump said over the weekend that Washington and Tehran were talking. But yesterday’s activity in the area serves as a reminder that tensions can escalate at any time, leading traders to maintain the current supply disruption premium.

API Drawdown Adds Support Ahead of EIA Report

In addition to the war premium, the market also found support from Tuesday’s American Petroleum Institute (API) report that showed a more than 11-million barrel drawdown last week.

Wednesday’s U.S. Energy Information Administration (EIA) inventories report is expected to show a 2-million barrel stockpile reduction.

Trend Is Up — Trendline at $62.49 Holds the Key

Daily March WTI Crude Oil Futures

Technically, the trend is up using all of our metrics. On Tuesday, the market closed on the strong side of a trendline that comes in today at $62.49. This is new support. A break back under this indicator will weaken the momentum.

The swing chart is also indicating an uptrend. A trade through $58.53 will change the main trend to down, while a move through $66.48 will reaffirm the uptrend. A new minor bottom formed at $61.12. If this fails, momentum will shift to the downside.

The main range is $54.84 to $66.48. Its 50% to 61.8% retracement zone at $60.66 to $59.29 is support and a value area.

The market is also trading on the strong side of the 200-day moving average at $60.66 and the 50-day moving average at $58.97. The 200-day MA forms a support cluster at the 50% level at $60.66.

Looking Ahead — Supply Disruption Risk Keeps Bulls in Control

The possibility of a supply disruption is real, so we expect the market to remain underpinned unless there is bearish commentary out of Washington. Holding above the trendline at $62.49 is a sign of strength. The trendline is moving up $0.36 per day. Bullish traders are hoping this creates enough upside momentum to challenge the last swing top at $66.48. A breakout over the longer-term top at $66.49 will indicate the buying is getting stronger, while putting $69.80 on the radar.

Source:fxempire

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Remarks of Officials

Political

UN Budget Under Pressure from Record Unpaid Dues

The United Nations is sounding the alarm over its finances, warning of a potential cash crisis by July as funding from the United States dwindles and unpaid dues from member states accumulate.

U.N. Secretary-General António Guterres stated that outstanding contributions from members reached a record $1.568 billion by the end of 2025. With collections covering only 76.7% of assessed contributions, the organization's financial stability is at risk.

Guterres cautioned that unless collections improve dramatically, the U.N. will be unable to fully implement its 2026 budget and could face a severe liquidity crisis by the middle of the year. The situation is compounded by new budgeting rules that require the U.N. to return certain "unspent funds" to members.

Figure 1: U.N. Secretary-General António Guterres warns that without improved collections, the organization faces a potential liquidity crisis by mid-year.

The Impact of Reduced US Financial Support

The financial squeeze follows significant policy shifts from the Trump administration, which has been cutting support over claims the U.N. fails to advance U.S. interests. Historically, the United States has been the organization's largest financial backer.

In 2024, for instance, U.S. taxpayers provided approximately 25% of the U.N.'s core budget and peacekeeping operations, along with 40% of its humanitarian assistance funding. The withdrawal of this support exposes the U.N.'s deep financial dependence on American contributions.

This dynamic intensified in January 2026 when the United States formally withdrew from the World Health Organization and began exiting dozens of other international bodies, citing a misalignment with American priorities.

Global Programs Face Cuts as Funding Dries Up

The funding shortfall is already having tangible effects on U.N. operations worldwide. Agencies including the World Food Programme and various refugee organizations are reportedly preparing for layoffs and program reductions. Overall contributions have fallen to their lowest point in a decade, forcing a widespread tightening of spending.

In his final yearly address before stepping down at the end of 2026, Secretary-General Guterres made a direct appeal to member states. "Either all member states honour their obligations to pay in full and on time—or member states must fundamentally overhaul our financial rules to prevent an imminent financial collapse," he wrote.

Guterres also highlighted a world troubled by "self-defeating geopolitical divides" and "brazen violations of international law," while denouncing "wholesale cuts in development and humanitarian aid."

The crisis raises a fundamental question that drives the U.S. position: why American taxpayers should continue funding a global institution that is increasingly viewed as ideologically opposed to their country's values and national interests.

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Economic

Alphabet (GOOGL, GOOG) is set to report its fourth quarter financial results after the bell on Wednesday amid growing optimism from Wall Street over the Google parent company's AI leadership.

Alphabet's stock edged higher by 0.4% during premarket hours on Wednesday ahead of its earnings release.

Analysts tracked by Bloomberg expect revenue to climb more than 15% to $111.4 billion and earnings per share to rise to $2.65 from $2.15 in the year-ago period. The projected jump in revenue is expected to be spurred by a more than 35% rise in Google Cloud revenue to $16.2 billion.

Google Services — the segment including ad revenue from Search and YouTube, which accounts for the majority of Alphabet's revenue — is estimated to see revenue climb a more modest 13% from the previous year to $94.9 billion, per Bloomberg consensus estimates.

Alphabet stock could rise or fall as much as 5% following its fourth quarter report, according to Bloomberg data.

The stock has soared 25% since its last earnings report showed the tech giant beginning to benefit from a slew of AI deals with Meta (META), Anthropic (ANTH.PVT), and OpenAI (OPAI.PVT) involving its cloud segment. The release of Google's Gemini 3 AI model — which outperformed competing models on benchmark tests and prompted rival OpenAI to declare a "code red" — as well as the announcement of a landmark deal with Apple, cemented Alphabet's position as an AI winner and pushed the stock higher.

At the same time, the broader "Magnificent Seven" group of Big Tech stocks is collectively down about 3% over that period, led by a 24% drop in Microsoft shares.

Alphabet is positioned to boast "the highest quality top-line AI acceleration stories in the public universe," Raymond James analyst Josh Beck wrote in a late-January note to clients, upgrading the stock's rating to a Strong Buy from Outperform. He pointed to Google's advantage as a full-stack AI provider, as the company has begun selling its AI chips, called TPUs, to external customers rather than reserving them solely for internal use.

Ahead of Wednesday's results, Wall Street believes Alphabet will benefit from broader strength in advertising demand — as evidenced by Meta's latest earnings report — in addition to growing adoption of Gemini 3 and demand for its AI chips.

"[W]e believe Gemini 3.0 and TPUs are increasingly differentiating Google offerings, which could support new mega-deal wins," Bank of America analyst Justin Post wrote in a note to clients last week.

Source: finance.yahoo

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Economic

Euro zone inflation cooled to 1.7% in January, flash data from statistics agency Eurostat showed Wednesday.

Economists polled by Reuters had expected the inflation rate to dip to 1.7%, down from 2% in December.

Core inflation, which excludes more volatile energy, food, alcohol and tobacco prices, stood at 2.2% in January, down a touch from the 2.3% seen in the year to December.

The latest data shows the key inflation rate has now dipped below the European Central Bank’s 2% target, meaning it’s likely to steer clear of any more rate cuts for the foreseeable future.

Cautious approach

The central bank next meets on Thursday and is expected to hold its benchmark interest rate at 2%. Economists expect no change in the coming months either, but note that there are a few factors that might change the ECB’s stance.

Lorenzo Codogno, founder and chief economist at Lorenzo Codogno Macro Advisors, said these could include an escalation of geopolitical tensions, a sharp appreciation of the euro, or somewhat higher-than-expected inflation prints.

“The ECB remains in a ‘good spot’ or ‘good place,’ but ECB speakers may become more reluctant to use such wording amid global uncertainty and fragility,” he said in emailed comments Tuesday.

“I continue to see a small downside risk for policy rates in the near term and some upside risk in the medium term. Yet the baseline scenario remains the same: no change in 2026 and 2027, with the bar for action high,” he noted.

Paul Hollingsworth, head of DM Economics at BNP Paribas Markets 360, agreed that the threshold for any policy action this year was high, and the next move could well be a hike.

“We see a high bar for any policy action, and stronger-than-anticipated underlying price pressures suggest the ECB will favour a steady hand for a prolonged period,” he said in emailed comments last week.

“We continue to see the next move as a hike, in the third quarter of 2027, by which point we expect more evidence of stronger domestic price pressures stemming from the impact of higher defence and infrastructure spending,” he said.