Author: Daniel Chang

UBS has advised its clients to adopt a long position on the USD/CNY currency pair, citing potential policy risks tied to Donald Trump’s upcoming inauguration. In a January 16 research note, the bank emphasized the significance of the event amid a relatively quiet week for economic data. While Trump’s initial policies remain uncertain, UBS analysts believe major tariff announcements are unlikely on day one. However, they noted that market sentiment remains cautious about possible future actions. The FX market has yet to fully account for significant tariffs, which could weaken the Chinese yuan (CNY) and other growth-sensitive currencies like the…

Former President Donald Trump announced plans for an executive order to delay restrictions on TikTok’s U.S. operations. The extension would allow more time to address national security concerns while keeping the platform available to American users. The proposed order would protect companies that help keep TikTok running during the extension. Trump stressed TikTok’s cultural importance, pointing to its role in amplifying events, including his upcoming inauguration. A central part of Trump’s plan is a joint venture giving the U.S. a 50% ownership stake. He believes this approach could ensure responsible management and drive TikTok’s value to hundreds of billions or…

The Japanese yen has gained strength recently, boosted by falling U.S. Treasury yields. Analysts at Capital Economics predict the currency will continue to appreciate modestly through 2025. By 10:20 ET (15:20 GMT) on January 16, the USD/JPY pair had dropped 0.4%, trading at ¥155.74, just above its weakest point since December 19. The yen’s rise follows a decline in U.S. Treasury yields after the latest U.S. Consumer Price Index (CPI) report. Capital Economics highlighted that this drop has eased pressure on the yen, which had lagged behind Japanese Government Bond (JGB) yields. Hawkish statements from Bank of Japan (BOJ) officials,…

DA Davidson’s latest analysis suggests Nvidia’s stock could hit its peak in 2025 but raises concerns about the company’s longer-term prospects. The firm acknowledges Nvidia’s strong performance over the past year but questions whether it can meet expectations for 2026. Its 2026 forecast is one of the most conservative among analysts, reflecting ongoing skepticism about the company’s ability to sustain its growth. Since starting coverage of Nvidia in early 2024 with a Neutral rating, DA Davidson has maintained its cautious outlook. It continues to hold a $135 price target, based on a valuation of 35 times earnings. The firm stated,…

Bank of America (BofA) analysts have observed a noticeable shift in the behavior and volatility of the Indian Rupee (INR), pointing to changes in how the Reserve Bank of India (RBI) manages the currency. According to the report, the RBI has transitioned from relying heavily on foreign exchange reserves to stabilize domestic monetary conditions. Instead, it’s now focusing on using interest rates to defend the INR, conserving its reserves in the process. This shift comes in the wake of the INR facing significant pressure during the fourth quarter, largely due to corrections from previous overvaluation compared to its global peers.…

The newest inflation numbers are out, and Wall Street analysts are buzzing with their takes on what it all means for the Federal Reserve and the economy. The Consumer Price Index (CPI) data, which measures changes in the prices of goods and services, has everyone guessing about the Fed’s next moves. Analysts at ING are tweaking their expectations for rate cuts in 2025. Instead of starting in March, they now think the first cut might happen in June. They point out that inflation is still running hotter than the Fed would like, and monthly price increases need to settle at…

The U.S. dollar has kicked off 2025 with impressive gains, hovering near multi-decade highs. However, UBS strategists anticipate a shift in the second half of the year, as they believe the greenback is now significantly overvalued. “Although the dollar has continued to strengthen in early 2025, we expect the year to unfold in two distinct phases—sustained strength in the first half, followed by a partial or full reversal in the latter half,” UBS analysts stated in their latest market outlook. The U.S. Dollar Index has climbed roughly 9% since late September, recently surpassing the 110 mark, a level UBS describes…

Gold could reach another all-time high in 2025 as investors turn to safe-haven assets amid expected market turbulence, UBS analysts have forecasted. After surging by 27% in 2024, gold hit a record peak of $2,788 per ounce in October and recorded an average annual price of $2,389 per ounce—the highest ever. Despite a brief sell-off spurred by a shift toward riskier assets after Donald Trump’s U.S. election victory, the precious metal posted its strongest yearly gain since 2020. In a client note released Tuesday, UBS analysts suggested that a stronger U.S. dollar and higher Treasury yields might weigh on gold…

The Japanese yen has managed to hold steady against the dollar despite the greenback’s recent rally, benefiting from its reputation as a safe-haven currency during market sell-offs. However, this resilience may waver if U.S. inflation data, set to be released later this week, comes in higher than expected, according to analysts from BofA Global Research. In a recent note, BofA strategists highlighted the potential for the dollar-yen exchange rate (USD/JPY) to rise further if U.S. Consumer Price Index (CPI) data surprises to the upside. They pointed out the pair’s sensitivity to inflation figures, stating that stronger-than-anticipated CPI results could renew…

Gold prices fell on Monday after stronger than expected U.S. nonfarm payrolls data dampened expectations for significant Federal Reserve rate cuts. The robust job market data strengthened the dollar, exerting pressure on gold. By late afternoon, spot gold dropped by 1% to $2,662.20 an ounce, while February gold futures declined by 1.3% to $2,680.01 an ounce. The primary factor behind the decline was the growing belief that U.S. interest rates would stay higher for longer. Friday’s payroll data led traders to reduce their expectations for rate cuts this year. All eyes are now on the U.S. inflation report due Wednesday,…