by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with notes on the new record price for gold above $5,000 per ounce and a related drop in the value of the dollar today. We next review several other international and US developments with the potential to affect the financial markets today, including an additional purge of a high-level Chinese general and the unexpected risk of another, partial government shutdown in the US.

Global Gold Market: Gold prices today have surged above the $5,000-per-ounce mark for the first time, and the metal is changing hands at $5,084 per ounce at this writing. In our view, the current upward pressure on gold prices reflects a range of factors, from concerns about currency debasement to geopolitical tensions and uncertainty about the future of US economic and international policy. Because of those factors, we continue to hold gold in all five of our Asset Allocation strategies and in our Global Hard Assets portfolio.

Global Currency Market: In another major market disruption today, the US dollar has slumped approximately 0.4%, as measured by the US Dollar Index. That means the greenback has now depreciated by about 2.1% just over the last week. Much of the downward pressure today comes from speculation that the Japanese government will intervene in the currency markets to prop up the yen. As we have noted in the past, a falling dollar tends to be bullish for foreign stocks.

United States-Canada-China: In a Saturday social media post, President Trump said he would impose a new 100% tariff on imports from Canada if Ottawa strikes a trade deal with Beijing. The move follows Canadian Prime Minister Carney’s recent trip to China, where he and General Secretary Xi agreed to cut their trade barriers on electric vehicles and canola oil — a move seemingly at odds with Carney’s historic speech in Davos, where he said “middle powers” like Canada must stick together instead of making deals with the Great Powers.

• Coupled with the president’s threat to hit eight European countries with tariffs because of their resistance to his desire for the US to take over Greenland, the new threat against Canada is a reminder that the administration could return to its aggressive trade policies at any time.
• That’s likely to further raise concerns among foreigners about the wisdom of investing in US assets or holding the dollar. If so, it could lead to further capital flight from the US, weighing on stock and bond values, pushing up interest rates, and reducing the value of the dollar. That scenario would also put added upward pressure on the prices for foreign stocks and precious metals.

Chinese Military: The People’s Liberation Army announced on Saturday that Zhang Youxia, vice chairman of the Central Military Commission, is under investigation for “serious discipline violations,” along with another top general. That suggests General Secretary Xi is continuing to press his long campaign to uproot deep-seated corruption in the armed forces. It also suggests Xi may have trouble trusting his military leaders’ advice and willingness to carry out orders — a concern that would likely impede any effort by Xi to take control of Taiwan.

• According to press reports, government officials said in a confidential briefing over the weekend that Zhang was being probed not only for political reasons and graft, but also for leaking details about China’s nuclear weapons to the West.
• If true, the accusation of selling nuclear secrets could suggest the Central Intelligence Agency has had some success in rebuilding its human spy network in China after having its previous network rolled up in conjunction with a mole at the agency over a decade ago. That would be consistent with our oft-stated belief that a US-China intelligence war was in full swing in recent years, at least until the administration’s recent effort to establish détente between the two countries.

Chinese Tech Industry: According to Bloomberg late last week, tech giants Alibaba and Baidu both plan to list their semiconductor-design units in the near future. Other Chinese firms are also reportedly planning chip-design IPOs or have recently completed them. The IPOs illustrate how China is making rapid progress developing its indigenous ability to produce chips for artificial intelligence. Indeed, the capital raised in these deals will likely accelerate the Chinese firms’ ability to compete with US tech giants such as Nvidia.

United Kingdom: Suella Braverman, the Conservative Party’s former home secretary, today became the latest prominent politician to defect from the center-right party to join the right-wing populist Reform UK Party run by Nigel Farage. With Reform UK leading in the public opinion polls ahead of key elections on May 7, many Conservative politicians see better electoral prospects by joining the new party, putting the future of the Conservative Party in doubt and strengthening Britain’s far-right.

US Fiscal Policy: After Immigration and Citizenship Enforcement officers shot and killed a US citizen in Minneapolis, Democratic Party leaders over the weekend said they may vote against a major appropriations bill that would fund the Department of Homeland Security as well as the Departments of Defense, Health and Human Services, Transportation, and Labor. Such a protest vote would shut down much of the federal government and potentially furlough thousands of workers again when the current stopgap funding bill runs out on January 31.

• The impact on the economy would likely be less than in last year’s broader shutdown.
• All the same, shutting down a department such as Labor could again disrupt the compilation of key economic data.

US Defense Strategy: The Pentagon on Friday released its new National Defense Strategy, which complements the administration’s December National Security Strategy. Focusing on how the administration plans to use the US military, the document raises “homeland defense” to the top priority and downgrades countering China to second place. It also says the administration will keep pushing US allies to take primary responsibility for their own defense. All the same, it vows to revitalize the US defense industrial base, which could be positive for US defense stocks.

US Weather: The big winter storm that struck from the Southwest to the Northeast over the weekend continues to disrupt life for up to 200 million US residents. At this point, the storm has caused almost 12,000 flight cancellations and has left approximately 900,000 people without power, mostly in the South. So far, it looks like Nashville is the hardest hit city, with 200,000 people going without electricity today. As always, we expect that any economic disruptions from such a large storm will prove temporary and have little lasting effect on the economy.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with the recent shift in US foreign policy toward increased interventionism, with a focus on Cuba. We also examine the finalization of the TikTok deal, the cooling of trade tensions between the EU and US, and the progress of the ongoing Ukraine-Russia peace talks. As always, we include a comprehensive roundup of essential economic data from the US and global markets.

Regime Intervention: Recent indicators suggest that the US government is poised to deepen its involvement in the Western Hemisphere over the coming months. A recent Wall Street Journal article highlights that the Trump administration is specifically targeting the Cuban government for removal before year’s end, as it has been emboldened by recent regional shifts. This policy is part of a larger effort to dismantle China’s growing presence in the Americas, marking a decisive pivot from traditional diplomatic engagement to a more transactional and assertive foreign policy.

• According to the report, Cuba’s political and economic situation has reached its most fragile point since Maduro was taken to the US. It has been speculated that the economy may be on the brink of collapse and is struggling to provide basic goods and medicine amid constant blackouts. Analysts believe this crisis could force the government into a political deal that would require moving away from its communist system toward a more democratic model.
• The initiative to dismantle the Cuban government appears to be the cornerstone of a long-term strategy to reshape the Western Hemisphere. The White House views the recent ouster of Nicolás Maduro as a solid proof of concept, demonstrating that the US can effectively engineer the transition of adversarial foreign governments. The objective is to force a new government to distance itself from Chinese influence while opening the island’s markets to American investors for the first time in decades.
• The White House’s new approach marks a definitive end to the era of the “benevolent hegemon.” In its place is a more assertive and transaction-based foreign policy. The US appears to be moving away from the soft-power goals of collaboration and regional stability, signaling to the world that future alliances will primarily be quid pro quo, with diplomatic moves measured by their direct benefit to US interests.
• This trend is exemplified by the recent establishment of the Board of Peace (BoP), a US-led international organization that serves as an alternative to the United Nations. Under its draft charter, countries can secure a permanent seat by contributing $1 billion to fund the charter. The board is structured with an Executive Board of US officials and is chaired for life by Donald Trump, granting him sweeping authority over its agenda and membership even after his presidency concludes.
• Market volatility has so far remained relatively low, as US actions have provoked more rhetoric than concrete retaliation. The absence of military confrontation and only a few isolated economic challenges have allowed markets to largely look past geopolitical tensions. The critical risk for investors is a change in this status quo. The formation of a coalition capable of mounting a serious economic or strategic challenge could trigger a sharp and prolonged rise in market instability.
• This environment is likely to favor commodities, as escalating tensions prompt nations to accelerate resource accumulation and stockpile precious metals like gold. Furthermore, the outlook for the aerospace and defense sectors remains highly favorable; global powers are expected to ramp up military expenditures significantly to safeguard their interests and deter emerging foreign threats.

TikTok Deal Done: The White House has finalized a deal to transfer key parts of TikTok’s US operations to a consortium of American investors. The agreement concludes a protracted saga that began with a proposed ban of the app over national security concerns. While its Chinese parent company, ByteDance, will retain ownership, the deal leases TikTok’s core content algorithm to the US entity, allowing it to be retrained and managed domestically. This arrangement signals a de-escalation in tensions between the US and China over tech concerns.

Bank of Japan: The Japanese central bank held its key rate steady at 0.75% in its latest meeting as it takes its time with tightening monetary policy. The bank’s outlook showed that policymakers expect growth and inflation to pick up over the coming months, suggesting it still plans to normalize policy after years of an accommodative stance. However, central bank officials indicated that next moves will be dependent on changes in the global economy, with the possibility of a slowdown leading the bank to moderate its pace of tightening.

EU-US Trade Resumes: EU lawmakers are expected to continue ratifying the US trade deal after having put it on hold following tensions over Greenland. The decision comes after the bloc expressed satisfaction with the White House’s reversal on its tariff threats. As a result, the European Parliament is expected to vote on the agreement in the coming days. This suggests that tensions between the two sides are starting to de-escalate as they look to finalize the arrangement.

Intel Slips: Concerns about a potential wafer supply crunch led to a sharp sell-off in Intel stock. While the company reported strong earnings, its outlook was bleak as the chipmaker claimed it may be unable to secure the memory chips needed to complete its orders. These concerns mirror those of Samsung, which noted weeks ago that competition for chips has led to an increase in costs that are being passed on to consumers. We are now seeing signs that AI-driven demand is beginning to drive up the prices of consumer discretionary goods.

Ukraine-Russia Deal: The White House is meeting with Russian and Ukrainian negotiators to help work out the final details of a peace deal. The focus appears on the Donbas region, where Russia controls about 90% of the territory, as Ukraine remains unwilling to cede land that Russia does not yet have in its control. These final talks suggest an agreement is within reach, potentially setting the stage for a post-war recovery. This deal could mean that these resource-rich regions will begin to boost exports, which would place downward pressure on grain and oil prices.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with a look at the White House’s intensifying efforts to reshape the Federal Reserve. We also analyze why the de-escalation over Greenland has not improved US-EU relations. Further analysis explores why investors are discounting corporate earnings beats, the IRGC’s consolidation of power amid Iran’s internal unrest, and the growing trade friction between the US and South Korea. As always, we conclude with a comprehensive roundup of essential economic data from the US and global markets.

The Fed’s Future: The future of the Federal Reserve took center stage on Wednesday as the administration moved to reshape the FOMC. The Supreme Court began hearing arguments on whether the president holds the authority to dismiss Fed Governor Lisa Cook following allegations of mortgage fraud. Simultaneously, the president reaffirmed his search for a successor to current Chair Jerome Powell. These developments are critical, as both outcomes will likely redefine the executive branch’s influence over independent monetary policy.

• The Supreme Court appeared skeptical of the White House’s claim that it has the authority to fire Governor Cook. Several conservative justices questioned whether such a dismissal could occur without providing Cook proper due process. The most prominent critic was Justice Kavanaugh, who suggested that the government’s argument would essentially allow a president to “dig up” accusations of wrongdoing as a pretext for removing any Federal Reserve official.
• Although the president’s power to remove members of the Federal Reserve Board remains a subject of debate, his search for a new Fed chair continues. Earlier this month, the president indicated that he is leaning against nominating Kevin Hassett. Now, it appears former Fed Governor Kevin Warsh may also be losing favor. Warsh’s advocacy for the Fed to maintain a small balance sheet places him in direct opposition to the president, who is seeking ways for the Fed to implement more accommodative monetary policy.
• The appointment of a new Fed chair won’t necessarily end Jerome Powell’s influence, as his separate term as a governor continues through 2028. While the president is expected to push for a full resignation, Powell has remained non-committal. Tensions reached a boiling point this week when Powell accused the administration of weaponizing a DOJ probe into Fed renovations as a legal pretext to force him out of the central bank.
• Despite the administration’s aggressive attempt to remake the Board of Governors, judicial skepticism suggests that the president’s influence will remain bounded by law. This check on executive power is critical for restoring trust in the Fed’s mandate. Provided that the central bank preserves its decision-making independence, the resulting policy certainty should support the greenback and temper recent spikes in market volatility.

Greenland Tensions Ease: President Trump has rescinded his threat to impose sweeping tariffs on European goods, effectively de-escalating a tense transatlantic standoff. The announcement followed a high-stakes meeting with NATO Secretary General Mark Rutte, during which the two established a strategic “framework” for bolstered US influence in Greenland and the Arctic in which the US would gain mining rights and station missiles in the region. While this agreement suggests that the immediate crisis has peaked, the underlying diplomatic friction remains.

• Following his meeting with President Trump, Secretary General Rutte clarified that the new framework focuses on regional security rather than Greenland’s sovereignty. He noted that the arrangement largely mirrors the terms established with White House officials prior to the president’s arrival. Rutte further elaborated that the agreement grants the US greater latitude to defend the semi-autonomous territory than was originally provided for under the 1951 Defense of Greenland treaty.
• While the agreement has assuaged fears of a US attempt to acquire territory from a NATO ally, it has simultaneously raised concerns about the international order breaking down. On Thursday, German Chancellor Friedrich Merz warned that Europe must prepare to become more independent and competitive as it positions itself to compete with the US. He emphasized the removal of bureaucratic hurdles to help companies operate and the establishment of a Capital Markets Union to draw more foreign investment.
• Modernizing EU operations is essential for competitiveness but faces a notoriously slow timeline. The bloc’s tendency to stall on trade deals was highlighted this week when the European Parliament referred the hard-won Mercosur agreement with South American nations to the ECJ. By seeking a judicial opinion before ratification, the EU risks a multi-year delay, underscoring how domestic pressures and legal cautiousness continue to hamper its ability to act quickly to address threats.
• The removal of the “Greenland risk” is a clear win for European stocks in the near term. However, the path toward true European independence from the US is fraught with structural challenges. We continue to see value in the region, especially if leaders move forward with a Capital Markets Union to unlock domestic investment. Although the implementation of such reforms will likely take longer than anticipated, the risk-adjusted returns for long-term holders appear favorable.

High Investor Expectations: Geopolitical uncertainty is overshadowing corporate fundamentals, leading to the worst stock reactions to earnings beats in nearly a decade. Bloomberg reports that the relative performance of firms surpassing expectations is at a low not seen since 2017. Investors are clearly looking past current profits to focus on forward-looking risks, suggesting that the momentum for traditional market leaders is fading. In this environment, we recommend increasing exposure to more value stocks.

Iranians Military Rise: The Islamic Revolutionary Guard Corps (IRGC) appears to be consolidating its power within the country. Its rising influence coincides with a surge of political unrest during which military forces have killed protesters. This consolidation has raised concerns that the IRGC’s leadership could effectively take control of the government, potentially heralding a new regime. So far, it is unclear how the US will react, but it has shown a willingness to confront any regime that might restart the country’s controversial nuclear program.

Silicon Valley Takes on Seoul: Silicon Valley investment firms are reportedly calling for diplomatic intervention to protect Coupang from an escalating regulatory crackdown in South Korea. Although headquartered in Seattle, the e-commerce giant faces intense scrutiny from Korean authorities following a massive data breach disclosed in November, which compromised the personal information of 33 million customers. Investors are concerned that the investigation is due to the government’s outsized response and is rooted in protectionism.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment begins with a deep dive into the volatility hitting the Japanese bond market. We then provide an update on the US-EU standoff over Greenland and the potential for a new round of US trade talks with China. Further analysis covers concerns regarding US tech leadership and today’s pivotal Supreme Court hearing on Federal Reserve independence. As usual, the report includes a roundup of essential economic data from the US and abroad.

Japan Bond Yields: Rising supply in the Japanese debt market is acting as a catalyst for a wider retreat from sovereign bonds. The market’s weakness stems from Prime Minister Sanae Takaichi’s decision to dissolve parliament for a February 8 election; a strong mandate would likely clear the path for a massive fiscal expansion. Since she took office in October, fears of uncurbed spending have weighed on investor appetite for long-dated Japanese Government Bonds (JGBs), a sentiment that is now beginning to infect the perceived credibility of other sovereign issuers.

• JGBs found some reprieve amid speculation of coordinated intervention by the government and the Bank of Japan. On Wednesday, the BoJ executed its scheduled bond-buying operations, providing much-needed liquidity. Meanwhile, pressure is mounting on the Ministry of Finance to alleviate supply concerns by either increasing purchases of long-dated bonds or reducing the issuance of 40-year securities.
• The spillover from surging Japanese bond yields has impacted both international markets and the domestic currency. US Treasury Secretary Scott Bessent noted that he is monitoring the fallout closely, as the situation has exerted upward pressure on US Treasury yields. Following high-level talks between the two nations, Japanese Finance Minister Satsuki Katayama announced that the US had signaled its support for currency intervention to stabilize the yen, which recently hit the critical threshold of 160 per dollar.
• The simultaneous occurrence of currency depreciation and rising government bond yields is generally viewed as a signal of deteriorating financial conditions. This “twin-track” weakness suggests that Japan must now rebuild market confidence through one of three difficult paths: achieving significantly stronger economic growth, implementing fiscal austerity, or shortening the duration of its bond issuance.

• Japan, like other major economies, may rely on reducing the average maturity of its government bonds to alleviate pressure on long-term yields. This strategy could appeal to investors wary of duration risk given the scale of anticipated debt issuance. However, it would also increase rollover risks for the government and potentially constrain the central bank’s ability to raise interest rates in the future, thereby opening the door to financial repression via higher inflation.
• The current environment of elevated government spending and political uncertainty continues to support precious metals as a portfolio hedge. We expect this dynamic to persist in the near term. However, once these macro concerns begin to recede, we anticipate a phase of price consolidation in metals, followed by a probable rotation of capital back into equities as investors seek renewed exposure to risk assets.

Europe Reaction: On Tuesday, markets sold off as escalating transatlantic tensions fueled concerns over trade friction between the US and the EU. During the Davos summit, several European leaders spoke candidly about shifting relationship dynamics. French President Emmanuel Macron accused the US of attempting to “subordinate” Europe, while EU Chief Ursula von der Leyen warned that the relationship would not return to its former state. Despite this rhetoric, there are strong indications that cooler heads will prevail.

• Market participants are increasingly concerned that the ongoing dispute over Greenland could jeopardize the EU-US trade agreement established last July. In response, the White House has announced a meeting with European counterparts to further discuss the matter. US officials expressed a commitment to reaching a “reasonable resolution” and cautioned the EU to weigh its options carefully, warning that premature retaliation could escalate the conflict and further destabilize trade relations.
• Meanwhile, a consensus on a retaliation plan has yet to emerge within Europe. While French President Emmanuel Macron suggested the possible activation of the EU’s anti-coercion tool, German Chancellor Friedrich Merz tempered those remarks, stating a clear preference for avoiding escalation with the US. Simultaneously, Italian Prime Minister Giorgia Meloni advocated for open dialogue, attributing the friction to what she described as poor communication from her American counterparts.
• Although a full-scale trade war isn’t a certainty, the White House is clearly using its economic weight to force a resolution on Greenland. President Trump has signaled that his strategy may expand beyond tariffs to secure the territory, a move that has met fierce resistance in Europe. President Macron has already pushed back, stating flatly that France will not permit the region to be bullied.
• While uncertainty remains high, we recommend staying the course in the markets. History shows that equities are resilient during trade negotiations, especially given the administration’s tendency to pivot when markets show signs of strain. We favor a diversified approach, gaining exposure to value stocks as a way to mitigate volatility. This strategy should limit some of the downside risks.

US-China Trade Talks: Trade tensions between the world’s two largest economies are showing signs of easing. On Tuesday, US Trade Representative Jamieson Greer hinted at a potential new round of negotiations with China, focused initially on expanding trade in non-sensitive goods. This development follows a Monday meeting between US Treasury Secretary Scott Bessent and Chinese Vice Premier He Lifeng. A positive trade agreement would likely provide a significant boost to global risk assets.

US Tech Gap Closing: The CEO of Google DeepMind has noted that China’s top AI firms currently trail leading Western labs by about six months. This gap persists despite China developing unconventional methods to advance its models after US trade restrictions cut off access to key Western technologies. The intensifying competition is expected to drive greater investment in the AI sector as the United States works to maintain its technological lead.

Supreme Court Hearings: The US Supreme Court is set to hear a landmark case regarding the president’s authority to dismiss Federal Reserve Governor Lisa Cook. The ruling will determine whether the president can remove a Federal Reserve Board member based on allegations alone, or if the “for cause” protections within the Federal Reserve Act prevail. The case stems from accusations made by FHFA Head Bill Pulte, who alleged that Cook falsified documents to secure favorable loans — a claim Cook has denied while presenting evidence to the contrary.

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by Patrick Fearon-Hernandez, CFA, and Thomas Wash

[Posted: 9:30 AM ET] | PDF

Our Comment today opens with the latest on the Greenland purchase dispute, which has driven down asset values around the globe. We next review several other international and US developments with the potential to affect the financial markets today, including more evidence that re-armament is likely to boost the broader European economy and signs of weakening economic growth in China.

United States-Europe: President Trump said on Saturday that he will impose an additional 10% import tariff on all goods from Denmark, Norway, Sweden, France, Germany, the Netherlands, the United Kingdom, and Finland, effective February 1, to punish them for opposing his plan for the US to purchase Greenland. He also vowed to hike the tariffs further to 25% on June 1, which he stated would remain in place until a deal is reached.

• Trump’s anger at the Europeans was apparently sparked by a tiny deployment of Danish, German, French, British, and Finnish troops to Greenland last week to prep for military exercises designed to demonstrate to Trump that Europe can, indeed, help defend the island as he has demanded. Press reports suggest Trump misinterpreted the deployment as the Europeans thumbing their noses at him. The president later linked his tariff threat to his anger at not being awarded the Nobel Peace Prize.
• In response, legislators in the European Parliament have announced that they will delay approving the US-European Union trade deal reached last summer, which would cut tariffs on US goods flowing to the EU and EU goods going to the US.
• Earlier today, President Trump said he has agreed to discuss the crisis with various European leaders this week in Davos, Switzerland, where he is attending the annual conference of the World Economic Forum.
• The rekindling of trade tensions and the risk of further disruptions — potentially including military conflict — rattled global financial markets yesterday even as the US was closed for the Martin Luther King Day holiday. So far this morning, US stock index future prices are down more than 1.5%, European stock prices are down almost as much, the yield on 10-year Treasury notes has jumped to 4.2870%, and the dollar is down 0.3%.

United Kingdom: In parliamentary testimony today, Bank of England Governor Bailey warned that the US leadership’s threat to annex Greenland and end the Federal Reserve’s independence could pose substantial threats to Britain’s financial stability. Bailey appeared to be saying that dramatic moves in asset prices or changes in trade and investment flows have the potential to disrupt credit and payment flows in the UK, which could weigh on British stock values.

France-Ukraine: French automaker Renault today confirmed that it has teamed up with defense firm Turgis Gaillard to produce drones for Ukraine at two of its manufacturing sites. The report follows previous news that some civilian manufacturers in Germany have also taken on defense work recently. In our view, these developments illustrate how Europe’s sudden re-armament effort is likely to benefit the broader economy, including by making use of excess civilian production capacity.

Portugal: In Sunday’s first-round presidential election, António José Seguro of the center-left Socialist Party came in first with just over 31% of the vote. The result marked an upset for the expected winner, André Ventura of the far-right Chega party, who came in second with about 25% of the vote. Some observers are taking the result as a sign that support for the far right in Europe may be hitting a ceiling. Seguro and Ventura will now face each other in a runoff election on February 8, with Seguro expected to win.

Japan: Prime Minister Takaichi yesterday confirmed she will call parliamentary elections for February 8 to capitalize on her high support in opinion polls and boost her coalition’s control of the Diet. A strong win by the coalition could embolden Takaichi to push through tax cuts and spending hikes aimed at boosting economic growth. Since that would likely expand the budget deficit and boost debt issuance, Japanese government bond yields are surging today, with the yield on 10-year JGBs touching 2.330% — the highest since February 1999.

Chinese Economic Growth: The National Bureau of Statistics yesterday said China’s gross domestic product for the full-year 2025 was up 5.0% from the previous year, after stripping out price changes. That met the government’s target for the year, but GDP in the fourth quarter was up just 4.5% year-over-year, suggesting the economy was losing momentum in late 2025. The data also showed that the economy remains unbalanced, with strong growth in net exports partially offset by weak growth in domestic consumption and investment.

Chinese Population Growth: The National Bureau of Statistics also said yesterday that births in China totaled just 7.92 million, down 17.0% from the 9.54 million in 2024. That marked the lowest birth total since records began in 1949 and broke the previous record low set in 2023. Coupled with a rising death rate as the population ages, that meant that China’s total population fell by 3.39 million in 2025 to 1.4049 billion. As we have argued before, China’s poor demographics have become a key structural headwind for its economy and financial markets.

Chinese Gold Demand: With average rates on one-year deposits now down to just 0.95%, major domestic and foreign banks operating in China are reportedly expanding their offerings of gold-linked structured products with expected annual returns of 1% to 5%. The development suggests rising Chinese demand could now be contributing more significantly to the current upswing in global gold prices. If Chinese demand continues to rise, it would help boost prices for the yellow metal even further.

Indonesia: According to press reports based on confidential sources, President Prabowo has nominated his nephew to join Bank Indonesia’s board of governors, raising concerns about the central bank’s independence. As in other countries in which leaders are working to seize control over monetary policy, the risk for investors is that the central bank will cut interest rates sharply to boost economic growth and generate support for the country’s leaders, despite the risk of igniting consumer price inflation and undermining the value of the currency.

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