2026-01-14 04:41:00
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NZ data adds to recovery signs, but FX reaction muted
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Oil shrugs off inventory builds amid geopolitical risk
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Japan equities hit records as yen slides on election bets
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Fed’s Barkin signals patience, defends independence
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China trade hits record, tech and commodities drive imports
New Zealand data kicked things off on a firmer footing, with November 2025 building permits rising both month-on-month and year-on-year, adding to signs that activity is stabilising after a prolonged downturn. The improvement reinforces the recovery narrative building around the economy, though NZD/USD showed little enthusiasm, suggesting the good news is being overshadowed by offshore drivers.
In commodities, early focus fell on energy markets. A private survey of U.S. oil inventories released ahead of the official government data pointed to larger-than-expected builds across crude, gasoline and distillates. Ordinarily a headwind for prices, the data was offset by ongoing geopolitical risk premia, with protests in Iran and renewed threats of U.S. intervention from Donald Trump continuing to underpin crude. As the session progressed gold and silver rose strongly.
In Asia, sentiment was mixed. Japan’s latest Reuters Tankan showed business confidence easing at the start of the year, with manufacturers’ sentiment slipping to a six-month low as weak demand from major economies weighed on materials-heavy sectors. The survey reinforces a slower-growth signal for Japan’s export sector, potentially tempering expectations for near-term Bank of Japan tightening, even as domestic-facing activity remains comparatively resilient.
U.S. central bank commentary followed. Richmond Fed President Tom Barkin pushed back against political pressure on the Federal Reserve, stressing the importance of institutional independence. On the economy, Barkin struck a measured tone, saying inflation remains above target but is not accelerating, while the uptick in unemployment does not appear disorderly. His remarks suggested comfort with current policy settings and reinforced the Fed’s patient, data-dependent stance.
Japanese equities then took centre stage. Stocks surged to fresh record highs as speculation intensified that Prime Minister Sanae Takaichi may call a snap election, with February 8 floated as a possible date. Markets have embraced the so-called “Takaichi trade,” pricing in looser fiscal policy. The Nikkei 225 broke above 54,000, while the yen weakened to around 159.40 per dollar, its softest level since July 2024, not farfrom levels that previously prompted intervention, even as 10-year JGB yields sit near 27-year highs.
In trade policy, the U.S. formally eased restrictions on advanced AI chip exports to China, publishing rules that allow conditional shipments of Nvidia’s H200 chips. The framework shifts from blanket denial to case-by-case licensing, subject to third-party testing, domestic supply safeguards and strict security requirements, keeping the reopening narrow and tightly controlled.
Finally, China trade data underscored the economy’s ongoing reliance on external demand. 2025 total trade hit a record 45.47 trillion yuan, cementing China’s position as the world’s largest goods trader. Exports rose 6.1%, imports 0.5%, while tech-related imports surged, led by strong gains in computer parts and electronic components. Commodity volumes also remained firm, with crude oil and metal ore imports rising, highlighting resilient industrial demand even as global prices softened.
Asia-Pac
stocks:
- Japan
(Nikkei 225) +1.55% - Hong
Kong (Hang Seng) +091% - Shanghai
Composite +1.2% - Australia
(S&P/ASX 200) 0%, flat
