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A jarring comment from NATO secretary general, Mark Rutte, is doing the rounds this morning where it is said he did not discuss with Trump on whether Greenland would remain part of Denmark under a newly announced framework for a future deal. In other words, there was no proposal of the sovereignty of Greenland in talks with Trump.

And the situation is made worse than this supposed “framework deal” is one that is based on a short conversation between Rutte and Trump. Neither Denmark nor Greenland were consulted on the whole thing.

The deal that is being floated by the New York Times here pretty much covers most, if not all, of the things the US can already do with Greenland. And that is to keep military presence and invest in the resources of the island. So, what gives?

It’s certainly interesting to say the least. Rutte adds that he and Trump had a “productive discussion to ensure security in the Arctic region” while also saying that Russia and China will be prevented from having economic or military access to China. Is this really all just to put pen to paper and formalise the status quo? Hmm.

There is definitely still some uncertainty up in the air but perhaps the most important thing for the geopolitical climate and for markets is that Trump has turned it all into a show that he has stepped back. It definitely lowered the temperature in the room even if the overall landscape remains heated.

For now, markets are taking it as a TACO situation. That especially since Trump continues to reaffirm that the stock market is and always has been his number one benchmark in which he pins his presidential performance to. So, that’s providing much relief for equities and we’re seeing a light bounce continuing today after the strong rebound yesterday.

Make what you will of the situation above. This won’t be the last of it but given the fact Trump has said he will not take Greenland by force, that will at least brush aside much geopolitical concerns in the near-term.

And even Rutte was already looking to move on from all this drama as he says that Greenland shouldn’t be the priority right now, “our main adversary is Russia”. Geez.

In any case, tariffs and a show of force by the US is now being ruled out. So, that’s reason enough for markets to be happy and slowly put this in the rearview mirror.

This article was written by Justin Low at investinglive.com.

• PBOC adviser publicly questions sustainability of US fiscal trajectory
• Goldman raises gold forecast to $5,400 (up $500) as private and central-bank demand builds
• Nikkei set to snap long losing streak as JGBs rally and tariff fears ease
• Here we go again … WSJ: US seeks Cuba regime change after Venezuela precedent
• China silver exports hit 16-year high in 2025 despite control fears
• Bridgewater stays bullish on China after 45% onshore fund gain
• PBOC sets USD/ CNY reference rate for today at 7.0019 (vs. estimate at 6.9697)
• Australia jobs surge in December, lifting AUD and RBA rate hike expectations
• Japan trade data recap – exports rise again in December, but US demand drags
• Australian December 2025 unemployment rate 4.1% (expected 4.4%, prior 4.3%)
• Retired jet engines spark debate over power source for AI data centres
• Japan data: December trade surplus smaller than expected (import jump, export growth slow)
• South Korea economy contracts in Q4 as growth sharply misses forecasts
• Japan bond market rattled as Takaichi tax cut pledge tests fiscal trust
• IEA lifts oil demand forecast but warns surplus will persist in 2026
• New Zealand core retail sales fell in December both m/m and y/y
• Oil: Private survey of inventory shows a headline crude oil build greater than expected
• investingLive Americas market news wrap: Trump says no tariffs over Greenland

At a glance:

• South Korea’s Q4 GDP unexpectedly contracted, highlighting macro weakness, though equities surged to record highs on improved global risk sentiment.

• Japan’s exports rose for a fourth month but missed forecasts, while USD/JPY remained volatile ahead of the Bank of Japan meeting.

• Australia’s jobs data smashed expectations, lifting the AUD and pulling forward RBA rate-hike pricing.

• Regional FX moves were driven by shifting rates expectations and easing tariff rhetoric.

• Gold traded sideways, consolidating near recent highs.

South Korea’s economy contracted 0.3% q/q in Q4, sharply missing expectations for modest growth. Investment, construction and exports all weighed on activity, while full-year GDP slowed to 1.0%, marking the weakest annual expansion since 2020 and reinforcing concerns about underlying momentum.

However, the growth disappointment was largely ignored by equity markets. South Korea’s stock benchmark surged past 5,000 points for the first time, powered by strong gains in chipmakers. The index is now up around 19% for the month, buoyed by improved global risk sentiment. Donald Trump backed away from fresh tariff threats against European nations, helping ease broader market weakness.

In Japan, exports rose 5.1% y/y in December, extending the recent run of gains but falling short of forecasts as shipments to the US dropped sharply. Imports beat expectations, narrowing the trade surplus. The yen was choppy: USD/JPY initially climbed toward 158.50, slipped back to around 158.20, and then weakened again, pushing above 158.60 as the session progressed. Japanese government bond yields continued to calm following their sharp surge earlier in the week. The Bank of Japan meets today and tomorrow, with an on-hold decision widely expected ahead of further policy normalisation later in the year.

Australia delivered the standout data. Employment jumped 65.2k in December, far exceeding forecasts, while the unemployment rate fell to 4.1%. The strength of the report lifted the Australian dollar and pushed markets to price roughly a 50% chance of a February rate hike from the Reserve Bank of Australia. The AUD surged to a 15-month high on the release and has since extended gains, with the NZD rising in sympathy, though to a lesser degree.

Gold was little changed, trading sideways around US$4,800 as markets consolidated after recent strong gains.

Asia-Pac
stocks:

• Japan
  (Nikkei 225) +2%, breaking
  its run of 5 days of consecutive losses
• Hong
  Kong (Hang Seng) -0.1%
• Shanghai
  Composite -0.15%
• Australia
  (S&P/ASX 200) +0.7%

This article was written by Eamonn Sheridan at investinglive.com.

The Trump administration is quietly pressing for regime change in Cuba, betting economic fragility and internal pressure can succeed where decades of US coercion failed.

Summary:

• WSJ reports US seeking Cuba regime change by year-end

• Strategy follows Venezuela leadership removal

• Focus on economic pressure and internal defections

• Oil supply and medical missions targeted

• Transition risks seen as higher than Venezuela

According to reporting by the Wall Street Journal (gated), the Trump administration is actively seeking to engineer regime change in Cuba by the end of the year, emboldened by its recent operation to remove Venezuelan leader Nicolás Maduro and convinced that Havana is now more economically vulnerable than at any point in decades.

US officials cited by the Journal believe Cuba’s economy is nearing collapse, largely due to the loss of subsidised Venezuelan oil that has underpinned the island’s energy supply since the early 2000s. With that support fading, Washington is attempting to identify insiders within the Cuban government who might be willing to negotiate an off-ramp from Communist rule, which has dominated the island for nearly 70 years.

The administration does not yet have a detailed blueprint for political transition, but senior officials see the Venezuela operation as both a template and a warning. The January 3 raid that led to Maduro’s capture was reportedly aided by a defector from within his inner circle, a precedent US officials hope could be replicated in Cuba. While there has been no public threat of military action against Havana, officials privately describe the Venezuela raid as an implicit signal of US capability and intent.

President Donald Trump has publicly urged Cuban leaders to strike a deal “before it’s too late,” warning that no further oil or financial support would be allowed to reach the island. Behind the scenes, officials have also targeted Cuba’s overseas medical missions, a critical source of hard currency, through visa bans and sanctions aimed at those accused of facilitating the program.

US intelligence assessments reportedly paint a bleak picture of Cuba’s economy, citing chronic shortages of fuel, food and medicine, alongside frequent power outages. Officials believe cutting off remaining Venezuelan oil flows could bring the economy to a standstill within weeks.

However, the Journal notes that Cuba presents a more complex challenge than Venezuela. Unlike Caracas, Havana lacks a legal opposition movement, regular elections or a broad-based civil society, raising questions over how a transition could be managed and who might replace the current leadership. Even some Trump allies privately acknowledge the risk that regime collapse could trigger instability and humanitarian strain — outcomes the administration sought to avoid in Venezuela.

This article was written by Eamonn Sheridan at investinglive.com.

Japan’s exports extended their recent run in December, but a sharp fall in US-bound shipments and stronger imports narrowed the trade surplus.

The data is here:

• Japan data: December trade surplus smaller than expected (import jump, export growth slow)

Adding more now.

Summary:

• Japan exports rise for fourth straight month

• December growth misses forecasts at 5.1% y/y

• US-bound shipments fall sharply

• Imports jump, narrowing trade surplus

• BOJ remains alert to inflation risks

Japan’s exports rose for a fourth consecutive month in December, supported by a weaker yen and solid demand outside the United States, though the headline gain fell short of market expectations and masked a sharp drop in US-bound shipments.

Government data showed export values increased 5.1% year-on-year in December, easing from a 6.1% rise in November and undershooting the median forecast for a 6.1% gain. The latest figures nonetheless extend a run of monthly increases, highlighting the continued support provided by currency depreciation and resilient overseas demand.

The regional breakdown was mixed. Exports to the United States fell 11.1% y/y, reflecting softer US demand and the lagged effects of trade policy uncertainty. In contrast, shipments to China rose 5.6% y/y, helping to offset weakness elsewhere and reinforcing signs of stabilisation in regional trade flows. Officials also pointed to the weaker yen as a key factor boosting export values, improving price competitiveness for Japanese manufacturers.

Imports grew 5.3% y/y, comfortably exceeding expectations for a 3.6% rise, signalling firmer domestic demand and higher input costs. As a result, Japan recorded a trade surplus of ¥105.7 billion, significantly smaller than forecasts for a surplus of around ¥356.6 billion.

Overall export performance in recent months has been underpinned by a combination of yen depreciation, a still-firm US economy earlier in the quarter, and the September trade agreement with Washington that established a baseline 15% tariff on most goods. While US-bound exports weakened in December, the broader impact from US tariffs has so far proven milder than initially feared.

Reflecting easing trade concerns and improved momentum, the government recently revised up its economic growth forecast for the fiscal year ending in March to 1.1%, from 0.7%. Against this backdrop, the Bank of Japan raised its policy rate to 0.75% in December, the highest level in three decades, and is widely expected to reaffirm its readiness for further tightening as yen weakness and wage dynamics keep inflation risks in focus.

This article was written by Eamonn Sheridan at investinglive.com.

Posting this very solid jobs data, I’ll be back with more on this separately.

For background, preview is here:

• Economic and event calendar in Asia: Australian jobs report, unemployment expected to rise

From a now unemployed graphic artiste 😉

This article was written by Eamonn Sheridan at investinglive.com.

Both exports and imports solid in the month, although exports did miss expectations.

Exports to:

• EU +2.6% y/y
• Asia +10.2% y/y
• US -11.1% y/y
• China +5.6% y/y

This article was written by Eamonn Sheridan at investinglive.com.

A theoretical estimate of jet-engine power capacity has revived interest in the US aircraft “Boneyard,” though real-world hurdles remain formidable.

Summary:

• Retired US military aircraft engines flagged as power source

• Theoretical capacity estimated near 40,000 MW

• Turbofan engines offer most potential

• Conversion costs and logistics remain prohibitive

• Concept highlights data-centre power constraints

The vast “Boneyard” of retired US military aircraft in the Arizona desert has long been seen as a graveyard for ageing hardware. Now, amid a global scramble for fast-deployable power, it is being floated as a potential, if highly theoretical, source of electricity generation.

Located at Davis-Monthan Air Force Base, the Boneyard houses roughly 4,000 retired military aircraft. With data-centre operators increasingly turning to modified jet engines as temporary or back-up power sources, the question has emerged: could the engines from these aircraft be repurposed to generate electricity at scale?

On paper, the numbers are eye-catching. A rough estimate suggests the engines once used by aircraft in storage could theoretically deliver up to 40,000 megawatts (MW) of capacity, around 10% more than Arizona’s current total generating capacity. But this headline figure comes with heavy caveats. The estimate reflects theoretical output, not deployable power, and assumes engines remain intact, serviceable, and available after an average of more than a decade in storage.

The largest potential contribution would come from turbofan engines, which could account for around 32,000 MW of capacity. Aeroderivative power turbines already exist, using aircraft engine cores adapted for electricity generation. For example, GE Vernova’s LM6000 turbine is derived from the CF6 aircraft engine family, and refurbished CF6 units are already commercially available. Even so, purpose-built power turbines are typically more efficient and optimised than retrofitted aviation engines, raising questions over cost and performance.

Other engine types offer far less promise. Turboshaft engines from retired helicopters may collectively amount to around 1,600 MW, but their small size, removal complexity and inferior efficiency compared with modern diesel generators make large-scale deployment questionable. Turboprop engines, including those from aircraft such as the C-130 Hercules, could theoretically add another 7,300 MW, though conversion costs would again be substantial.

In practice, the idea looks more like an illustration of energy scarcity than a near-term solution. While repurposing some engines may be feasible for niche applications, the Boneyard is unlikely to become a meaningful power source without costs and logistical hurdles overwhelming the benefits.

US Energy Administration (EIA) the source for this … and its not even April 1 😉

This article was written by Eamonn Sheridan at investinglive.com.

South Korea’s economy unexpectedly shrank in Q4 as weak investment and exports overwhelmed modest gains in consumption.

Summary:

• South Korea GDP contracts 0.3% q/q in Q4

• Biggest quarterly contraction since late 2022

• Investment and exports drag heavily on growth

• Consumption offers only modest support

• Full-year growth slows to 1.0% in 2025

South Korea’s economy unexpectedly contracted in the final quarter of 2025, delivering its sharpest quarterly downturn in three years and underscoring growing headwinds from weak investment, soft trade flows and fragile domestic demand.

Advance estimates from the Bank of Korea showed gross domestic product shrank 0.3% quarter-on-quarter on a seasonally adjusted basis in the October–December period, sharply missing market expectations for a 0.1% expansion. The contraction followed a strong 1.3% rebound in the third quarter, highlighting increased volatility in growth momentum toward year-end.

On an annual basis, GDP grew 1.5% year-on-year, slowing from 1.8% in the previous quarter and undershooting forecasts for a 1.9% rise. The Q4 outcome marked the weakest quarterly performance since late 2022 and capped a year of slowing expansion for Asia’s fourth-largest economy.

The breakdown of activity pointed to broad-based weakness. Facility investment fell 1.8% q/q, reflecting subdued corporate spending amid elevated borrowing costs and lingering uncertainty over global demand. Construction investment dropped 3.9% q/q, extending a prolonged downturn in the property and infrastructure sectors. External demand also weighed heavily, with exports declining 2.1% q/q and imports down 1.7% q/q, signalling both softer global trade conditions and weaker domestic absorption.

Private consumption offered only limited support, rising a modest 0.3% q/q, suggesting households remain cautious despite easing inflation pressures. Analysts noted that the consumption lift was insufficient to offset sharp declines in investment and trade.

For 2025 as a whole, South Korea’s economy expanded 1.0%, down from 2.0% growth in 2024 and marking the slowest annual growth rate since 2020. The weaker trajectory adds to challenges facing policymakers as they balance growth support against financial stability risks, particularly with global demand uneven and domestic investment yet to show sustained recovery.

This article was written by Eamonn Sheridan at investinglive.com.

Japan’s bond market is testing the credibility of fiscal policy as election-driven tax promises collide with rising yields. Reuters have a good piece up I’ve summarised here.

In brief:

• Takaichi’s food tax pledge has shaken Japan’s bond market

• Investors fear erosion of long-standing fiscal discipline

• JGB yields surged to multi-decade highs

• Debt servicing and ageing costs amplify risks

• Policy tools offer limited, short-term relief

Japan’s bond market turmoil sparked by Prime Minister Sanae Takaichi’s pledge to suspend the consumption tax on food may prove difficult to contain, as investors question whether the government is undermining long-standing fiscal discipline at a sensitive moment for the market.

Takaichi’s promise to halt the 8% food levy for two years, a policy once considered politically untouchable, has revived concerns about Japan’s ability to manage the world’s heaviest public debt burden. Even her mentor, former prime minister Shinzo Abe, avoided cutting the consumption tax during the height of “Abenomics,” ultimately opting instead to push through a politically costly tax increase in 2019.

Market anxiety has surfaced quickly. The yield on the 10-year Japanese government bond surged nearly 20 basis points over two sessions earlier this week to a 27-year high, while super-long maturities recorded record sell-offs reminiscent of the UK’s 2022 “Truss shock,” when unfunded tax cuts triggered a collapse in confidence. Although Japan’s situation differs structurally, with limited pension leverage and a more cautious central bank, investors are increasingly uneasy about fiscal slippage at a time when the Bank of Japan is stepping back from years of aggressive bond buying.

Japan’s vulnerabilities are acute. Roughly a quarter of the national budget is already devoted to debt servicing, while ageing demographics are driving relentless growth in social welfare spending. Consumption tax receipts account for more than one-fifth of total revenue, making the proposed suspension — estimated to cost around ¥5 trillion annually — particularly destabilising. Critics argue that once lowered, consumption taxes are politically difficult to restore.

While the government retains technical options to slow the sell-off, including bond buybacks, trimming issuance, or BOJ emergency purchases, analysts warn these tools offer only temporary relief. With elections looming and political parties competing over tax cuts and spending promises, markets fear that fiscal prudence is being sacrificed for electoral gain.

Unless the government outlines a credible funding framework after the election, investors warn bond market volatility may persist, raising the risk that Japan’s fiscal credibility faces a more lasting test.

This article was written by Eamonn Sheridan at investinglive.com.

New Zealand electronic retail card spending data covers about 68% of core retail sales in the country. It’s the main measure of monthly retail activity.

NZD/USD is barely changed on the data.

This article was written by Eamonn Sheridan at investinglive.com.

Australia’s December labour force report is expected to show a rebound in employment after a surprisingly weak November, but the broader picture remains one of a labour market that is gradually cooling rather than sharply deteriorating.

Economists at Westpac note that employment fell by 21.3k in November, extending a run of softer outcomes in recent months. On a three-month average basis, employment growth is now tracking at around 1.4% year-on-year, a pace that is clearly below Australia’s long-run average and consistent with a slowing labour market. That said, Westpac cautions against over-interpreting a single month’s result, particularly given increasingly volatile data since the pandemic as changes in leave-taking behaviour continue to complicate seasonal adjustment.

Importantly, November’s employment decline was not accompanied by a rise in unemployment. Instead, the unemployment level fell modestly, as the participation rate dropped to 66.7%. This fall in participation effectively cushioned the unemployment rate, which held steady at 4.3%. However, Westpac highlights that on a three-month average basis the unemployment rate is clearly trending higher, now sitting around 4.4% compared with 4.1% six months earlier.

Looking ahead to December, Westpac expects a modest bounceback, forecasting employment growth of around 40k. With participation expected to recover slightly to 66.8%, this would see the unemployment rate round up to 4.4%, marking roughly a 0.4 percentage point increase over the past year and reinforcing the narrative of gradual softening rather than abrupt weakness.

A similar rebound story underpins the outlook from Commonwealth Bank of Australia, although with a slightly more optimistic tone. CBA also points to November’s choppy result, which saw employment fall by 27.5k and participation decline by 0.2 percentage points. Drawing on historical patterns, the bank notes that when both employment and participation fall materially in the same month, there is a high probability of a rebound in the following survey. On that basis, CBA forecasts employment to rise by around 35k in December, with participation lifting to 66.8% and the unemployment rate remaining unchanged at 4.3% to end 2025.

Beyond the near-term volatility, CBA remains constructive on the labour market outlook. The bank points to internal indicators suggesting more consistent monthly employment gains ahead, alongside improving economic growth and rising utilisation measures. Together, these signals are seen as supportive of sustained employment growth through 2026, even as the pace of expansion remains more moderate than in the post-pandemic boom.

**

In markets, a broadly in-line or modestly stronger December labour force outcome would be unlikely to generate a major reaction, but the balance of risks still leans toward a slightly firmer AUD if employment rebounds as expected. A solid headline jobs gain and a recovery in participation would reinforce the view that the labour market is cooling only gradually, keeping the Reserve Bank of Australia cautious. That backdrop would tend to support the Australian dollar at the margin, particularly against low-yielding peers, though any upside is likely to be capped by the steady rise in the unemployment trend and the absence of renewed wage pressure. For equities, the ASX would likely take a resilient labour print in stride: stronger employment supports the domestic growth outlook and consumer confidence, but also nudges, at the margin, closer to rate hikes (not in prospect at the moment though). As a result, gains in cyclical and consumer-linked stocks could be offset by relative underperformance in rate-sensitive sectors such as real estate and utilities, leaving the broader index range-bound rather than directionally driven by the data.

This article was written by Eamonn Sheridan at investinglive.com.

• Trump cancels the Greenland tariffs: Says they have the framework of a future deal
• Atlanta Fed GDPNow tracker climbs to 5.4% from 5.3% but there are skeptics
• More signs of the K-shaped economy, this time from United Airlines
• US December pending home sales -9.3% vs +0.4% expected
• Trump in Davos: No nation can secure Greenland other than the United States
• Canada December producer price index +4.9% y/y vs +5.8% expected

Markets:

• Gold up $18 to $4780
• US 10-year yields down 4.2 bps to 4.25%
• WTI crude oil up 27-cents to $60.63
• S&P 500 up 1.5%
• AUD leads, CHF lags

The whole trading day was about You-Know-Who as we awaited his speech from Davos for hints of what was coming next. The fear was that he would say the US was going to annex Greenland at all costs and tariff anyone who stopped him but he didn’t highlight tariffs in his speech and instead talked about how markets had fallen the day before but they were going to go back up and eventually double “sooner than anyone believes”.

That was something of a tell or at least a reminder that Trump is always focused on the Dow Jones Industrial Average. That lent some comfort to market participants and led to some large bids. Those faded somewhat as a meeting between Trump and NATO’s leader kicked off but there where new highs when Trump announced ‘the concept of a plan’ on Greenland and that there wouldn’t be tariffs.

As stocks jumped on that, gold faded to $4780 from as high as $4887 and silver pared back to $90 from a high of $95. Bonds rallied with 10-year yields down 4.6 bps to 4.24%. Some of that bid in bonds may have also reflected the likelihood that the Fed’s Cook remains in her job after some skepticism from the Supreme Court on the case.

Late in the day, Trump also said on CNBC that he hopes there will be no further action on Iran, something that could weigh on oil.

This article was written by Adam Button at investinglive.com.