Trump Policy Variables Continue to Rattle Markets; Greenland and Iran Issues Heat Up Simultaneously

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Summary:

Trump: Does not rule out the possibility of taking Greenland by force; Trump still demands that aides draft a decisive military plan against Iran......

[Quick Facts]

1. Trump: If the Supreme Court restricts Federal tariff policies, other means can be used.

2. Trump: Does not rule out the possibility of taking Greenland by force.

3. Russian Foreign Minister stresses seeking a diplomatic resolution to the Ukraine issue.

4. Japanese PM Sanae Takaichi drew sharp criticism after deciding to dissolve the Lower House.

5. Market continues to bet on Powell keeping position after possible demotion.

6. New Zealand announces November 7th General Election, and the race tightens as the Ruling Coalition faces challenges.

7. After withdrawing strike plans, Trump still demands that aides draft a decisive military plan against Iran.

[News Details]

Trump: If the Supreme Court restricts Federal tariff policies, other means can be used

On January 20th, local time, U.S. President Donald Trump took questions at a press conference. When asked whether an unfavorable Supreme Court ruling on tariffs would affect U.S. security policy toward Greenland, Trump said that if current tariff tools are restricted, he could use other methods, such as licensing regimes and other alternatives. He emphasized that the current approach is the best, strongest, fastest, simplest, and least complicated, but not the only option.

Trump: Does not rule out the possibility of taking Greenland by force

On January 20 local time, it was reported that President Trump stated his goal of controlling Greenland remains unchanged and refused to rule out the possibility of taking it by force. On social media, Trump clarified his objective: to seize sovereignty over Greenland from NATO ally Denmark. The day before, CCTV reporters learned that during an interview, Trump declined to say whether he would use force to take Greenland, calling it "no comment."

Russian Foreign Minister stresses seeking a diplomatic resolution to the Ukraine issue

Russian Foreign Minister Sergey Lavrov said at his annual press conference in Moscow on the 20th that Russia will continue seeking diplomatic solutions to the Ukraine issue. Lavrov noted that Russia has always been open to resolving Ukraine through diplomacy, but the West is doing everything possible to sabotage peace agreements. He believes British, French, and German officials have no interest in resolving the Ukraine crisis and are unwilling to reach agreements to end the conflict. Whenever Russia shows goodwill to resolve the issue, the process is blocked by the West. Lavrov added that the West's efforts to isolate Russia are no secret but have failed.

Japanese PM Sanae Takaichi drew sharp criticism after deciding to dissolve the Lower House

Japanese Prime Minister Sanae Takaichi's announcement to dissolve the House of Representatives and call for early elections has triggered public uproar. Citizens held rallies opposing her move, while experts and media expressed dissatisfaction, arguing that dissolving the lower house at this time is an ungrounded abuse of power. Opposition parties accused Takaichi of acting selfishly and disregarding people's livelihoods. The Constitutional Democratic Party and Komeito said they will expedite procedures such as party membership changes and unite against Takaichi's ruling coalition in the upcoming lower house election.

Market continues to bet on Powell keeping position after possible demotion

A new twist has emerged in President Trump's reshaping of the Federal Reserve, focusing on whether Fed Chair Jerome Powell will step down when his term ends. Although Treasury Secretary Bessent said Tuesday that the much-anticipated candidate could be revealed as early as next week, Powell's 14-year term as Fed governor runs until January 31st, 2028.

Historical precedent shows nearly all outgoing Fed chairs also resign their governorships, but if Powell deems threats to the Fed’s independence severe enough, he may break with tradition and remain as governor. In the late 1940s, Marriner Eccles did something similar.

Some on Wall Street believe Trump's potential further control over the Fed Board to steer monetary policy may greatly increase the likelihood of Powell and Fed Governor Michael Barr staying beyond May.

Likewise, Philip Jefferson, Vice Chair of the rate-setting FOMC, whose seat lasts until January 2036, can choose to stay or leave. Wall Street increasingly speculates that threats to Fed independence may raise the chances of all current governors remaining.

New Zealand announces November 7th General Election, and the race tightens as the Ruling Coalition faces challenges

New Zealand Prime Minister Christopher Luxon announced on Wednesday that a parliamentary election will be held on Saturday, November 7th, with plans to dissolve Parliament on October 1st. Since the 2023 election, the center-right coalition government led by Luxon, comprising the National Party, NZ First, and ACT, has been in power. The former aviation executive has seen his approval ratings dip over the past year due to economic weakness. Current polls show a tight race, with neither the ruling coalition nor the center-left Labour Party led by former PM Chris Hipkins holding a clear majority.

After withdrawing strike plans, Trump still demands that aides draft a decisive military plan against Iran

According to The Wall Street Journal, U.S. officials revealed that although strike plans against Iran were withdrawn last week, President Trump continues demanding that aides provide military options with decisive effect. Discussions are running parallel to the deployment of additional U.S. aircraft carriers and fighter jets to the Middle East, potentially laying the groundwork for a large-scale military buildup.

Trump repeatedly used the word "decisive" when describing desired effects, prompting aides to refine a range of scenarios, some aimed directly at regime change in Iran. More moderate options are also being developed, possibly including strikes on facilities linked to Iran's Islamic Revolutionary Guard Corps. No final order has been issued yet, but Trump's continued demands indicate he has not ruled out "punitive" action against Iran.

[Today's Focus]

UTC+8 15:00 UK December CPI

UTC+8 15:30 ECB President Lagarde delivers speech

UTC+8 17:00 IEA releases monthly oil market report

UTC+8 21:30 U.S. President Trump delivers speech

UTC+8 23:00 U.S. December Pending Home Sales Index (MoM)

TBD U.S. Supreme Court hears arguments in Trump's attempt to remove Fed Governor Cook

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Winkelmann

Commodity

Forex

Gold prices smashed through $4,800 an ounce on Wednesday, scaling another record high as escalating tensions linked to Greenland and renewed trade frictions rattled global markets and drove investors toward safe-haven assets.

Spot gold jumped 1.7% to a new all-time high of $4,844.39 an ounce by 21:13 ET (02:13 GMT), extending a relentless rally that has pushed bullion to successive all-time highs this month.

U.S. Gold Futures climbed1.3% to $4,830.04.

Gold prices have jumped more than 5% this week, including today's gains.

The latest surge came as relations between the U.S. and Europe remained strained over Greenland's strategic importance.

U.S. President Donald Trump has insisted there is "no going back" on Greenland, citing security concerns in the Arctic, and has threatened tariffs against European countries, unsettling markets already on edge over global trade risks.

French President Emmanuel Macron said Europe would not bow to "bullies," stressing that respect and cooperation, not coercion, should define relations between allies.

His remarks, delivered on the sidelines of the World Economic Forum in Davos, underscored growing unease in Europe over Washington's rhetoric and trade threats tied to the Greenland dispute.

Trump sought to calm nerves by saying the U.S. was working on the issue and aimed for an outcome that would satisfy NATO, but investors remained cautious.

Investor demand for gold was further boosted by weakness in the U.S. dollar, which slid about 0.8% on Tuesday to a two-week low.

The US Dollar Index traded 0.2% lower during Asian hours on Wednesday.

A softer dollar makes gold cheaper for holders of other currencies and typically lifts demand for the non-yielding metal.

Among other precious metals, silver prices edged slightly lower to $93.9/oz after hitting a record high of $95.87.oz on Tuesday.

Platinum rose to a record high of $2,519.51/oz on Wednesday but later pared gains to trade 0.6% lower at $2,450.9/oz.

Source: Investing

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Ukadike Micheal

Remarks of Officials

Stocks

Daily News

Political

Economic

Forex

President Projects Currency Stabilization in Coming Months

South Korean President Lee Jae Myung has stated that the country's currency could strengthen and find stability around the 1,400 won per dollar mark within the next one to two months.

Speaking at a press conference on Wednesday, Lee addressed concerns over the won's recent weakness, framing it as part of a broader global trend rather than a problem unique to South Korea. He noted that other major currencies, like the Japanese yen, have experienced even greater pressure.

Lee pointed to the nation's economic fundamentals as a source of strength. "We have achieved a record-high $700 billion in exports, the trade balance remains in surplus, and growth is recovering, yet the exchange rate is hovering at levels seen last year," he said.

Key Headwinds Facing the Korean Currency

Despite the president's optimistic outlook, the won has fallen over 8% against the US dollar since the beginning of the second half of 2025. This decline has persisted despite various market interventions by policymakers.

Several factors are contributing to the downward pressure on the currency:

• Retail Investor Outflows: Korean retail investors have shown a strong appetite for US stocks, with their holdings reaching a new record of nearly $172 billion this month, according to data from the Korea Securities Depository. This demand for dollars weighs on the won.

• US Investment Pledges: A commitment made last year to invest a total of $350 billion in the United States as part of a trade deal has raised concerns about financing the capital outflow. A source familiar with the matter told Bloomberg News that the government plans to delay a pledged $20 billion investment in the US this year due to the currency pressure.

President Lee acknowledged the difficulty of the situation, stating that arresting the won's drop is hard to resolve "through our own policies alone."

Policy Stance and Immediate Market Reaction

President Lee defended the won's relative performance, comparing it favorably to the yen. "Compared to Japan, ours has depreciated less," he commented, adding that if the won had fallen at the same rate, the exchange rate would be closer to 1,600. In his view, the currency was "holding up relatively well."

He reiterated the government's commitment to currency stability, promising to "explore possible means and strive to stabilize the exchange rate."

The president's remarks triggered an immediate market response. The won, which had been lagging behind a broader trend of global dollar weakness, reversed course. It rose as much as 0.6% to 1,468.90 against the dollar in Seoul trading.

Gyeong-Won Min, an economist at Woori Bank, explained the rally: "The won...rebounded after the president's comments, prompting demand to unwind bets on dollar strength."

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Gerik

Economic

Cryptocurrency

Bitcoin Tracks Broader Market Weakness

Bitcoin fell to its lowest level in more than a week, dropping below $90,000 for the first time since Jan. 9 as selling pressure intensified across global asset classes. After declining as much as 4% on Tuesday, the largest cryptocurrency extended losses during Asian trading hours on Wednesday, falling 0.5% to $88,894 as of 9:27 a.m. in Singapore. The decline unfolded alongside simultaneous drops in equities, long-dated U.S. Treasuries, and Japanese government bonds, underscoring how digital assets are moving in close correlation with traditional markets during periods of elevated volatility.

The $90,000 level has held symbolic and technical significance since the beginning of the year. Market participants have repeatedly viewed it as a near-term support zone, making the latest breach an important reference point for short-term sentiment rather than a signal of structural weakness.

Altcoins and Crypto-Linked Stocks Under Pressure

Selling pressure was more pronounced among smaller and less liquid digital assets. Ether dropped more than 7%, while Solana declined 5.3%, reflecting a typical pattern where higher-beta tokens react more sharply during risk-off phases. This divergence illustrates a relationship of correlation rather than direct causation, as altcoins tend to amplify broader market moves rather than drive them.

Crypto-related equities mirrored the weakness in digital assets. Coinbase Global Inc. slid 5.6%, while Strategy Inc., known for its aggressive Bitcoin accumulation strategy, fell nearly 8%. The equity selloff highlights how exposure to crypto through public markets can magnify price swings during periods of market stress.

Geopolitics and Capital Flight Shape Market Behavior

The downturn across crypto and traditional assets followed renewed geopolitical tension after U.S. President Donald Trump signaled a shift in the postwar global order by asserting American dominance in the Western hemisphere and reiterating his intention to take over Greenland. These statements unsettled investors by raising the likelihood of trade disruptions and diplomatic friction, particularly between the U.S. and Europe.

In parallel, Japanese bonds sold off sharply, with yields on 30- and 40-year government securities jumping more than 25 basis points. The move came after Prime Minister Sanae Takaichi pledged food tax cuts as part of her election campaign, triggering concerns over looser fiscal policy and rising government spending. Together, these developments contributed to a broader reallocation of capital toward perceived safe havens, a shift that coincided with rallies in gold and silver and weakness in the U.S. dollar.

The relationship between these macro developments and Bitcoin’s decline is best understood as one of correlation. Bitcoin has increasingly behaved as a risk-sensitive asset, responding to global liquidity conditions and investor sentiment rather than acting as an independent hedge.

Institutional Buying Provides a Counterbalance

Despite the pullback, signs of institutional demand remain visible. Strategy announced on Tuesday that it purchased nearly $2.13 billion worth of Bitcoin over the previous eight days, marking its largest acquisition since July. This move suggests that long-term investors continue to view price weakness as an opportunity to accumulate exposure, particularly through corporate balance sheets.

Market participants also noted Bitcoin’s relative resilience compared with Ether during the session, a dynamic partly attributed to renewed interest in Bitcoin-linked equity vehicles. Since the start of the year, investors have allocated around $1.2 billion into U.S.-listed Bitcoin exchange-traded funds, flows that had previously supported prices following last year’s market downturn.

The latest decline reinforces how closely Bitcoin remains tied to global risk sentiment during periods of macro uncertainty. While institutional inflows and strategic accumulation point to underlying demand, short-term price action continues to reflect shifts in confidence across broader financial markets. As geopolitical tensions and fiscal concerns remain unresolved, volatility is likely to persist, keeping key technical levels such as $90,000 firmly in focus for investors.

Source: Bloomberg

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Gerik

Economic

Policy Context And Political Motivation

The executive order comes at a time when housing affordability remains a dominant voter concern across the United States, particularly as borrowing costs stay elevated and home prices remain structurally high in many regions. By positioning the policy as a defense of individual homebuyers against Wall Street competition, the administration frames the housing shortage as partly linked to investor behavior rather than purely to construction constraints or demographic pressures. The timing also reflects heightened political incentives, as the White House faces pressure to demonstrate concrete action on cost-of-living issues before congressional elections later this year.

The order states that large institutional investors should not acquire single-family homes that could otherwise be purchased by families seeking homeownership. To operationalize this stance, the administration has instructed relevant agencies to issue formal guidance within 60 days detailing how restrictions on such transactions would be implemented. This approach signals an intention to influence market behavior through regulatory clarification rather than immediate statutory change, leaving room for interpretation while setting a clear policy direction.

Regulatory Review And Antitrust Focus

Beyond prospective restrictions on future sales, the order mandates a broader review of existing rules governing institutional ownership of single-family housing. The Treasury Secretary has been directed to assess whether current regulations facilitate large-scale acquisitions and to consider revisions where appropriate. At the same time, the Justice Department and the Federal Trade Commission are tasked with scrutinizing substantial or sequential acquisitions in local housing markets for potential anti-competitive effects. Particular attention is given to coordinated vacancy management and pricing strategies, which regulators argue may contribute to higher rents and reduced availability without corresponding improvements in housing quality.

Wall Street firms such as Blackstone, American Homes 4 Rent and Progress Residential expanded aggressively into single-family rentals following the 2008 financial crisis, when widespread foreclosures created opportunities to acquire homes at scale. According to a 2024 study by the Government Accountability Office, institutional investors owned approximately 450,000 single-family rental homes by June 2022, representing about 3 percent of the national total. While this share may appear modest, its concentration in certain metropolitan areas has amplified its perceived impact on local prices and rental dynamics.

The executive order places the administration closer to long-standing Democratic critiques of corporate homebuying, which argue that large investors crowd out first-time buyers and push prices higher through scale advantages. Although previous legislative efforts to curb institutional ownership have failed to gain traction, the use of executive authority shifts the battleground to regulatory enforcement and antitrust oversight. For housing markets, the effectiveness of the policy will depend on how narrowly or broadly “large institutional investors” are defined and whether enforcement meaningfully alters acquisition incentives. In practice, the order may have a stronger signaling effect in the short term, shaping expectations and public debate, while its longer-term influence will hinge on implementation details and legal resilience.

Source: Reuters

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Samantha Luan

Forex

Cryptocurrency

Key Insights:

· Ethereum price dropped below the $3,060 support, shifting short-term market sentiment.

· Over 30% of ETH is staked, strengthening network security despite price weakness.

· Institutional adoption continues through tokenized assets, funds, and staking products.

Ethereum (ETH) price slipped below a closely watched support level this week, putting short-term pressure on the market.

Still, stakeholder growth, strong network use, and steady institutional activity continue to shape the broader outlook.

The Ethereum Price Outlook

Ethereum (ETH) price has been under pressure after losing support around the $3,060 level. Traders had been watching this zone for weeks, as it held this price point during earlier pullbacks.

Once it gave way, selling picked up and pushed Ethereum (ETH) lower. The move did not trigger panic, but it did shift near-term sentiment.

Meanwhile, many short-term traders now see the $2,900 area as the next level to watch. This zone has acted as support before and could slow further declines.

Ethereum Price Chart | Source: OSHO

If that level fails, attention turns to the $2,300 range, which some market participants still view as a major downside target.

That area lines up with earlier trading ranges where buyers were active.

Despite the drop, Ethereum price action remains controlled. Volumes have stayed moderate, suggesting this is not a rush for the exits.

Instead, ETH price appears stuck in a narrow range as buyers and sellers wait for direction. This kind of movement often follows long rallies, especially when markets lack fresh news.

Still, the big question is whether Ethereum price can still push toward $4,000. For that to happen, the market would need to reclaim lost support and break through resistance near recent highs.

That likely requires stronger demand and a clearer shift in sentiment. Until then, sideways movement remains the base case.

The Ethereum Decentralization Outlook

Away from Ethereum price charts, the protocol continues to show strength at the network level. More than 30% of all ETH is now staked, marking a new record.

At current prices, this represents roughly $120 billion securing the network. This steady rise points to growing trust in Ethereum's long-term role.

Notably, staking removes ETH from active circulation, which can reduce sudden supply shocks. It also strengthens network security by increasing the value locked by validators.

For many holders, staking offers a reason to hold through price swings rather than trade short-term moves.

Still, Ethereum remains one of the most decentralized public blockchains in use, according to Joseph Young. Validators are spread across regions and operators, lowering the risk of control by a small group.

Ethereum Decentralization Showcase | Source: Joseph Young

This structure continues to appeal to developers, institutions, and users who value neutrality and uptime.

The rise in staking during a period of weaker price action is notable. It suggests that many participants are focused less on short-term price and more on yield and network participation.

This behavior supports the view that Ethereum is maturing beyond a pure trading asset.

ETH Institutional Positioning Worth Watching

In a separate development, institutional interest in Ethereum has continued to grow, even as the price cools.

Large financial firms are launching real products on Ethereum and its scaling networks, not just pilot programs. Tokenized funds, stocks, and money market products are now live and in use.

Several asset managers have moved to offer Ethereum exposure that includes staking rewards.

This reflects comfort with Ethereum's structure and its yield model. For institutions, staking turns ETH into an income-generating asset rather than a static holding.

Banks, payment firms, and fintech companies are also building on Ethereum to support stablecoins and settlements.

These projects depend on network reliability, not daily price moves. Their growth adds steady demand for Ethereum block space.

Ethereum price may struggle in the short term, but institutional behavior points to a longer positive view. Firms are committing capital and infrastructure, not chasing quick gains.

If broader market conditions improve, this base could support another run toward $4,000. Until then, Ethereum remains in a pause, balancing price weakness against deepening adoption.

Source: CryptoSlate

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Justin

Bond

Economic

Demand for Indonesian bonds fell to the lowest in 10 months at an auction as a selloff in the rupiah deepened and concerns over the country's fiscal health persisted.

Indonesia sold 36 trillion rupiah ($2.1 billion) of debt on Tuesday, an upsized amount that drew just 82.9 trillion rupiah of bids, according to the Ministry of Finance's debt management office. The bid-to-target ratio fell to 2.51, the weakest since March 18, according to data compiled by Bloomberg.

The waning appetite for Indonesian bonds reflects a broader selloff in the global debt markets, led by declines in Japanese notes as Prime Minister Sanae Takaichi's tax plan raised fiscal fears. In the Southeast Asian country, populist spending and concerns over the central bank independence have added pressure to the rupiah, pushing the currency to a record low.

Overseas investors submitted bids for just 3.9 trillion rupiah of debt at the auction, well below last year's average of 15.6 trillion rupiah, said Handy Yunianto, head of fixed-income research at PT Mandiri Sekuritas. "Foreign investors always look at yield spread and foreign-exchange risks and both of them are currently not favorable for Indonesian bonds."