The Overnight News Roundup

Jan 23, 2025

PiQ and Zack Eiseman provide you with a consolidated roundup of the overnight news that matters most to markets.

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MACRO:

China said mutual funds should raise their holdings of onshore equities by at least 10% annually for the next three years, while large state-owned insurers will need to invest 30% of their new policy premiums from 2025. Announced at least 100 billion yuan ($13.75 billion) of insurance funds will be invested in stocks in the first half. (BBG/WSJ)
China traders are eyeing data including air passenger traffic and box-office sales during the Lunar New Year holidays, running from Jan. 28 to Feb. 4, to gauge whether the spending season can jumpstart the economy. (BBG)
Chinese sovereign bonds’ falling yields are driving onshore investors to actively hunt for overseas alternatives with higher returns. Capital outflows from mainland China via its Southbound Bond Connect program totaled nearly 52 billion yuan ($7.1 billion) in December, the highest since August 2022. (BBG)
US President Trump says he doesn't care if Congress does one bill or two bills for reconciliation, while he stated regarding FEMA that he would rather see states take care of their own problems. (Newsquawk/Fox)
More than half of the American businesses in China, the highest level in five years, say they are concerned about a further deterioration in the bilateral relationship between the world's two largest economies, according to a survey. (RTRS)
A fast-spreading wildfire sparked in northern Los Angeles County, prompting renewed fears of death and destruction in a region already decimated by historic wildfires this month. (WSJ)
The Senate has set a key procedural vote for Thursday afternoon to advance the nomination of Pete Hegseth to be defense secretary. GOP leaders are confident he will win confirmation. (CNN)
Pimco's CIO expects the Fed to keep rates steady until there was “more clarity either on the data front or the policy front”. (FT)
Bond traders are unwinding bets on two-year Treasury futures. Open interest dropped for five straight sessions through Tuesday to the lowest level since the March contract became the most-traded maturity, back in November. (BBG)
Japanese retail investors’ hunger for overseas equities, as evidenced via NISA data, is weighing further on the yen, adding to downside risks posed by tariffs from Donald Trump and the wide interest-rate gap with the US. (BBG)
Traders in dollar-yen options are changing their strategy going into an expected Bank of Japan rate increase Friday now that President Trump’s inauguration is over, selling vol in either direction after previously buying downside protection. (BBG)
Japanese exports rose for a third successive month in December as a weak yen boosted the value of shipments, though a decline in volume underscored doubt about an outlook clouded by the unpredictability of U.S. trade policy. (RTRS)
Japan's issuance of refinancing bonds is set to fall to a seven-year low in 2027, according to a draft government estimate, which is likely to help the central bank slow the rate at which it purchases debt. (RTRS)
The EU has promised to help Europe’s embattled car industry potentially by using pan-EU subsidies to boost demand for EVs. (FT)
Saudi Crown Prince MBS told Trump that his country is willing to expand its investments and trade with the US in the coming four years by $600 billion, or even more if opportunities arose. (BBG)
UK PM Starmer has announced plans to prevent legal challenges from causing delays to major infrastructure projects. (BBG)
Confidence in the UK economy sunk lower at the start of the year, according to a survey of consumer sentiment by BRC. Fewer than one in six Britons expect conditions to improve. (BBG)
New Zealand plans to establish a one-stop shop ("Invest New Zealand") to bolster foreign direct investment and drive faster economic growth. (BBG)
South Korea is dusting off a tool last used 21 years ago to help stabilize its currency: issuing up to 20 trillion won ($13.9 billion) in special bonds. (BBG)
South Korea’s economy expanded at a weaker-than-expected pace of 2.0% in 2024 after lackluster growth in the fourth quarter amid weak consumer and business spending, bolstering the case for another rate cut next month. (WSJ)
Taiwan plans to propose a draft law on virtual asset service providers in June 2025 to authorize banks to issue stablecoins. (Cointelegraph)

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GEOPOLITICAL:

Houthi rebels in Yemen have released the crew of the Galaxy Leader more than a year after they seized the ship in the Red Sea and signaled they would stop attacking vessels after the Israel-Hamas cease-fire agreement. (WSJ)

EQUITIES:

OpenAI will commit $19 billion to Stargate, as will SoftBank. It will be structured like a venture fund and the debt it raises could trade publicly. (The Information)
SK Hynix's profit growth slowed in the fourth quarter from the previous three months as increased output from Chinese rivals weighed on the memory chip industry as a whole. (Nikkei)
Star technology banker Michael Grimes is in discussions to leave Morgan Stanley to work for the Trump administration. (WSJ)
Electronic Arts cut its outlook, dragged down by fewer gamers playing its soccer-themed video-game titles. (WSJ)
Hyundai Motor reported weaker-than-expected net profit for the fourth quarter amid a decline in vehicle sales. (WSJ)