The Overnight/Weekend News Roundup

Jan 27, 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:

Equity futures opened lower for the week, particularly the NQ and Nikkei, as concerns over the implications of China's DeepSeek on the broader AI sector ramped further. Bitcoin/crypto has seen weakness as part of the risk off move, while Treasuries are finding strength.
Momentum is growing among President Trump’s advisers to place 25% tariffs on Mexico and Canada as soon as Saturday, where Trump is amenable to the tariffs-before-negotiations strategy. (WSJ)
The White House said Colombia has agreed to all of President Trump's terms, including unrestricted acceptance of all illegal aliens from Colombia returned from the United States, avoiding imminent tariffs that were threatened on Sunday. (newswires)
Trump said on Saturday he was in talks with multiple people over buying TikTok and would likely have a decision on the popular app's future in the next 30 days. (RTRS)
Trump said that his first international trip could be to Saudi Arabia, even though traditionally U.S. presidents visit Britain. Said he discussed bringing oil prices down with crown prince MBS. (RTRS)
Republican lawmakers are trying to overcome internal differences on how to pay for Trump's sweeping tax cuts, with hardline conservatives determined to reduce an annual federal deficit approaching $2 trillion. (RTRS)
Trump has been invited to address a joint session of Congress on March 4th to share his America First vision for the futures, Republican House Speaker Mike Johnson said on Saturday. (RTRS)
Chinese Foreign Minister Wang Yi spoke with U.S. Secretary of State Marco Rubio on Friday and Beijing said he told the known China hawk that the direction and tone of U.S.-China ties had been set by their leaders and he hoped Rubio would play a constructive role. (RTRS)
WSJ article "The Extra Reward for Owning Stocks Over Bonds Has Disappeared" notes the fall in the S&P 500 equity risk premium beneath the US 10yr Treasury yield. (WSJ)
FT article "Does lower inflation make bonds an appealing option for portfolios?" also mentions the increasing allure of fixed income over equities. (FT)
The sharp sell-off in US bonds may not yet be over, say fund managers and analysts, as they try to work out the longer-term impact of Trump and his policies on Treasury yields and prices. (FT)
China’s official gauge of factory activity tumbled into contractionary territory in January as factories suspended operations days ahead of the Lunar New Year Holiday. (WSJ)
Profits at China's industrial firms fell for a third straight year in 2024, underlining the urgency for policymakers to step up support for an economy facing tariff threats from the new Trump administration. (RTRS)
Chinese industrial profits showed commodities producers ending 2024 at the bottom of the pile, where crude oil processors, steelmakers and coal miners were the country’s least profitable enterprises. (BBG)
Chinese money managers are looking for pockets of value instead of broad equity market strength amid tariff threats and fading stimulus hopes. (BBG)
Chinese President Xi Jinping’s government is set to make a flurry of promotions this year that will give a first glimpse at a rising generation of officials set to become the nation’s next top leaders. (BBG)
UK PM Starmer and US President Trump discussed trade in their first conversation since Trump re-entered the White House. They also agreed to “meet soon.” The leaders spoke about “how both countries can promote a fair bilateral economic relationship”. (BBG)
A clear majority of British businesses look set to cut the size of pay awards for staff in response to coming tax hikes and they remain pessimistic about the outlook for the economy, two surveys showed. (RTRS)
UK banks have urged the BoE to dilute its plans for handling failing lenders, arguing that they go beyond equivalent rules in the US or the EU, and will impose “significant costs” on the sector. (FT)
Australia PM Albanese’s Labor Party is trailing the opposition coalition despite a summer campaign blitz, according to the latest opinion poll ahead of an election that must be held by mid-May. (BBG)
Switzerland's President and Finance Minister Karin Keller-Sutter forecast higher annual budget deficits of around 3 billion Swiss Francs in the next few years due to higher military spending and pension costs. (RTRS)
Emerging market investors are turning increasingly wary of carry trades as the threat of tariffs from the Donald Trump administration and the prospect of further dollar gains squeeze returns. (BBG)
PineBridge Investments and JPMorgan Asset Management are sticking with bullish bets for Asian junk-rated bonds given elevated yields and a supportive economic outlook, looking beyond stresses in the Chinese property sector. (BBG)
Indian sovereign bond yields slid to their lowest level in nearly three years after data showed the central bank made significant debt purchases to help ease a cash shortage. (BBG)

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GEOPOLITICAL:

Big shipping companies say they won’t send vessels back to the Red Sea despite a pledge by Iran-backed Houthi militants in Yemen not to attack them as long as a cease-fire in Gaza holds. (WSJ)
A subsea data cable between Latvia and Sweden was damaged early Sunday, sparking a criminal investigation, a third such incident in the Baltic Sea in the past three months. (BBG)

EQUITIES:

DeepSeek overtakes ChatGPT on Apple's app download rankings in the US.
Activist investor Ancora has nominated nine candidates for United States Steel’s board and is pushing for the company to abandon a takeover by Nippon Steel. (BBG)
Analysts expect Tesla’s vehicle sales to grow much more slowly this year (+16%) than co-founder Elon Musk has forecast (+20-30%), as Donald Trump seeks to dismantle Biden-era climate policies that favour EVs. (FT)
Investors offloaded a record amount of private equity stakes on the second-hand markets last year, as the prolonged drought in dealmaking has encouraged pension funds and buyout groups to seek other ways to cash in their investments. (FT)
Volkswagen open to Chinese rivals taking over excess production lines in Europe. (FT)
Ryanair reported an increase in earnings after passenger numbers and average fares rose in the third quarter of fiscal 2025, but the airline cut its traffic growth estimate for its next fiscal year due to Boeing delivery delays. (WSJ)
Diageo Plc said it doesn’t plan to sell the Guinness beer brand or its stake in Moet Hennessy, even as pressure grows on the company to find ways to revive growth. (BBG)
Late-stage trial data for Roche’s drug against muscle-wasting Elevidys showed positive results after two years of treatment for male patients aged 4 or older with Duchenne muscular dystrophy. (WSJ)
BHP will not be making a fresh bid for rival miner Anglo American in the near term because its shares have become too expensive. (FT)
Shares of Japanese lenders gained on optimism their profitability will improve after the BoJ raised its key policy rate to the highest level in 17 years. (BBG)
Distressed property sales in Hong Kong are beginning to bite banks that used to be well protected against loan losses. (BBG)