MONEY MASTER

Quick Summary US stock futures fell sharply  after Donald Trump signalled an imminent Fed chair announcement Kevin Warsh is widely seen as the frontrunner , with prediction markets pricing a 94% probability Dollar and Treasury yields ticked higher , pressuring equities Markets view Warsh as  moderate — not aggressively dovish , raising liquidity concerns What’s Driving the Market US equity futures retreated after President  Donald Trump  said he has  firmed up his choice  to replace Fed Chair  Jerome Powell , with reports pointing to  Kevin Warsh . Bloomberg and Reuters reported that Warsh  visited the White House on Thursday , fuelling expectations of a formal nomination as early as Friday. Why Markets Are Nervous While Warsh is seen as  supportive of lower interest rates , investors are focused on his reputation for: Caution on heavy monetary stimulus Preference for a  smaller Fed balance sheet Key tension:  Lower rates, but ...

Gold and silver surged to fresh record highs as investors rushed into  safe-haven assets , driven by escalating geopolitical tensions, a weaker US dollar, and expectations of  further US interest rate cuts . What’s Driving the Rally Geopolitical risk spikes , particularly renewed US–Iran tensions US dollar weakness , making precious metals cheaper for global buyers Expectations of Fed rate cuts , with markets eyeing June as the next move Strong ETF inflows , signalling institutional demand Spot gold climbed  2.1% to US$5,513 , after touching a peak near  US$5,595 , marking  nine consecutive sessions of record highs . The metal is now  up 28% for January . Silver followed closely,  breaking above US$120  and extending its year-to-date gain to nearly  64% . Geopolitics Back in Focus US President  Donald Trump  urged Iran to negotiate a nuclear deal, warning of stronger retaliation than previous US strikes on Iranian nuclear facilities...

President  Donald Trump  is facing a familiar problem — he wants  lower interest rates fast , but without  spooking Wall Street or damaging Fed credibility . With  Jerome Powell ’s term ending in May, the lack of clarity around the next Federal Reserve chair is becoming a growing concern for investors. Quick Summary Trump wants aggressive rate cuts without market panic All four candidates involve trade-offs Bond markets are the most vulnerable to surprises Policy uncertainty may drive volatility before the nomination Why Investors Are Watching Closely Trump wants a Fed chair who can: Cut interest rates aggressively Align publicly with his economic views Maintain credibility with markets and global investors The problem: A loyal rate-cutter may unsettle bond markets, while a credible Fed insider may resist political pressure. The Four Shortlisted Names — Each Comes With a Cost Kevin Hassett Most aligned with Trump’s agenda Trusted insider and loyal adviser Raises...

What’s happening The  US dollar is coming under renewed pressure  in early 2026 as investors reassess political, monetary and geopolitical risks tied to the US. The greenback is on track for its  sharpest three-day drop since April 2025 , when tariff threats triggered a broad selloff in US assets. Under  Donald Trump , policy unpredictability has resurfaced — from tariff threats and geopolitical brinkmanship to attacks on  Federal Reserve  independence — prompting investors to rethink long-held assumptions about dollar stability. Why the dollar is under fire Several forces are converging: Political risk premium is rising : erratic trade threats, diplomatic tensions, and renewed talk of a US government shutdown Monetary policy divergence : markets expect the Fed to cut rates at least twice this year, while other central banks pause or even tighten Fed leadership uncertainty : Chair Jerome Powell is set to step down in May, with speculation that a more dovish...

US equities opened the week modestly higher as investors positioned for  a heavy catalyst stack  — led by  Big Tech earnings , the  Federal Reserve policy decision , and rising  political risk premiums . At the same time,  gold surged above US$5,000/oz , reinforcing that risk appetite remains  fragile and selective , not outright bullish. Market Snapshot (Early US Session) S&P 500 : +0.39% Dow Jones : +0.45% Nasdaq : +0.23% Breadth was positive, but gains were  measured , reflecting caution ahead of event risk. Key Themes Driving Markets 1. “Magnificent 7” Earnings: The AI Payoff Test This week marks a  critical checkpoint  for the AI trade. Four Mega-cap names —  Apple ,  Microsoft ,  Meta Platforms , and  Tesla  — report results. What markets want: Evidence that  AI capex is translating into revenue Reassurance on  margins, not just growth Forward guidance that justifies  elevated valuations ...

A closely watched US inflation report due Thursday is expected to  reinforce the Federal Reserve’s cautious stance , with price pressures easing only gradually and still running above the central bank’s comfort zone. What the Market Expects Economists forecast that the  personal consumption expenditures (PCE) price index , the Fed’s preferred inflation gauge, will show  little change in momentum . Core PCE (ex-food & energy): +0.2% MoM +2.8% YoY Headline PCE: +0.2% MoM +2.8% YoY If confirmed, inflation would be  moving sideways , not accelerating — but still  well above the Fed’s 2% target . Why This Matters for Policy Core PCE tends to adjust more slowly than CPI, and recent data suggest inflation cooled only modestly toward the end of 2025. While consumer inflation closed December at  2.7% , PCE readings point to  stickiness rather than renewed disinflation . Economists note that: Inflation ran  hot but stable  in late 2025 Seasonal adj...

Fed’s Goldilocks Rate Cut Sparks Asia Market Rally The US Federal Reserve’s latest rate cut delivered a  “Goldilocks” outcome  — easing conditions without turning overly dovish. For Asia, strategists say this is creating a  broad relief rally  across currencies, bonds, and selected equity sectors. Dollar Weakness Lifts Asian Currencies Analysts expect a  weaker US dollar  to support most Asian currencies. The  Korean won (KRW)  and  Indonesian rupiah (IDR)  are highlighted as potential outperformers due to attractive valuations and the Fed leaving room for more cuts in 2026. Short-Dated Bonds and High-Grade Credit Benefit Most With the Fed injecting liquidity and easing dollar funding pressure,  short-tenor Asian bonds  and  high-grade credit  are seen as the clearest winners. Lower front-end yields usually push these assets higher. Selective Equity Boost: Cyclicals and Exporters Lead A softer dollar and cheaper fundi...

The Federal Reserve will finally receive one of the most critical inflation readings it has been missing for weeks, as the Labor Department releases the  September Producer Price Index (PPI)  on Tuesday—data that has been stuck in limbo during the 43-day US government shutdown. The wholesale inflation report, due at 8:30 a.m. Eastern, will offer policymakers a long-delayed look at price pressures building inside the supply chain. The fresh data is also a key input into the  September PCE inflation report , the Fed’s preferred gauge, which is now scheduled for Dec. 5—just days before the central bank’s rate-setting meeting on  Dec. 9–10 . Why This Matters For nearly six weeks, the Fed has been flying partially blind, unable to access core inflation statistics that inform its assessment of how sticky price pressures truly are. The arrival of both  PPI  and  PCE  before the December meeting is seen as a meaningful shift for markets, which have been r...

Asian equities look poised to open higher Wednesday, tracking Wall Street gains amid optimism that the  record U.S. government shutdown could end within days , clearing a key uncertainty for investors and restoring access to delayed economic data. Futures rose in  Hong Kong  and  Australia , while  Japan  was little changed. The  S&P 500  erased earlier losses to close up  0.2% , buoyed by expectations that a reopening of the government will release fresh liquidity into markets. The  Nasdaq 100  fell  0.3% , pressured by a  3% drop in Nvidia Corp.  after  SoftBank Group Corp.  sold its entire stake in the chipmaker to fund artificial intelligence investments. The Senate passed a  temporary funding bill  that would reopen most of the government through  Jan. 30 , sending it to the House for final approval.  President Donald Trump  has already endorsed the measure, raising hopes th...

Federal Reserve governor  Stephen Miran  said that escalating  US-China trade tensions  have heightened downside risks to economic growth — making it  more urgent for the Fed to cut rates quickly . “There’s now more downside risks than there was a week ago, and it’s incumbent upon us as policymakers to reflect that in policy,” Miran said at a CNBC event on Wednesday. He described the renewed trade conflict as a “ new tail risk ” for the global economy, underscoring that recent developments have tilted the balance of risks toward weaker growth. Push for Faster Easing Miran reiterated his preference for  faster and deeper rate cuts , saying it’s “even more urgent” to move policy to a  neutral level . “I wouldn’t say I want lower rates than a week ago, but I want to get there faster,” he said. He has previously argued for a  125-basis-point  reduction in the Fed’s benchmark rate by year-end — well beyond the  two quarter-point cuts  pr...

Boston Federal Reserve President  Susan Collins  said on Tuesday that it would be  “prudent to normalize policy a bit further this year”  given that inflation risks have eased while downside risks to employment are growing. Collins noted that even with some additional easing,  monetary policy would remain mildly restrictive , ensuring inflation continues to moderate once tariff effects fade. However, she emphasized that policy is  “not on a preset path” , and future decisions will depend on incoming data and evolving risks. “I can envision scenarios where appropriate policy calls for holding rates steady later this year and into next,” Collins said, signaling a  data-dependent and cautious  stance. Her comments align with market expectations of  at least one more Fed rate cut before year-end , as the central bank balances cooling inflation against softening labor conditions.

Key Takeaway:  After a powerful US$16 trillion surge since April, Wall Street paused for breath as traders took profits and valuations came under scrutiny. Market Recap Index Latest Change S&P 500 (.SPX.US) 6,715 -0.38% US 10-Year Treasury Yield 4.13% -3 bps US Dollar — Higher The S&P 500 slipped from record highs, led by weakness in large-cap technology names. Oracle (ORCL.US) dropped 2.5% after reports of lower cloud margins. Tesla (TSLA.US) fell more than 4% after unveiling lower-priced Model 3 and Model Y versions. Dell Technologies (DELL.US) rose 3.5% after raising forecasts on strong AI-driven demand. A US$58 billion Treasury auction drew solid demand, pushing bond prices higher. Rally Fatigue After a US$16 Trillion Surge A strong run since April, driven largely by AI optimism, is showing signs of exhaustion. Sentiment indicators from Goldman Sachs, Barclays, and Bloomberg Intelligence all suggest that investor enthusiasm has reached extreme levels. “A period of conso...

Shutdown Deadline Approaches Asian shares opened cautiously on Monday as investors weighed the risk of a potential  U.S. government shutdown . Without a funding deal, the shutdown could begin  Wednesday , coinciding with the rollout of new U.S. tariffs on  heavy trucks, pharmaceuticals, and other products . President Donald Trump is set to meet congressional leaders later Monday in an effort to secure an extension. Analysts warn that a prolonged closure would delay critical economic data releases — including the September  payrolls report  — leaving the  Federal Reserve (Fed)  with less visibility ahead of its  Oct 29 meeting . Fed Implications Bank of America (BofA)  analysts noted that if the shutdown extends beyond October, the Fed would have to rely more on private-sector data. Markets currently price in a  90% chance of a Fed rate cut in October  and a  65% probability of another in December . Economic growth impact is est...

After months of strong gains, US equities paused on Wednesday, with the  S&P 500 slipping 0.3%  as traders weighed stretched valuations, sticky inflation risks, and labor-market concerns. The index has set nearly 30 records this year, outpacing forecasts, but analysts say momentum is beginning to wane. Valuations Under Scrutiny Bank of America’s Savita Subramanian  highlighted that on 19 of 20 valuation metrics, the S&P 500 trades at historically expensive levels. Despite high multiples, Subramanian argued the premium may be justified given improved earnings visibility and economic resilience. Market Commentary: “Timeout Called” Strategists are increasingly cautious after a  35% rebound from April’s lows : Piper Sandler’s Craig Johnson  described the latest pause as a “timeout,” with risks skewing near term but the uptrend intact. Nomura’s Charlie McElligott  warned that euphoric AI-driven buying has left investors crowded at high exposure levels, r...