The post Jobs Day Eve appeared first on CEPR.

Indians Bought More Gold Than Stocks In January, Goldman Sees Pros Buying Long-Dated Calls

The near-vertical surge in precious metals (arguably driven by speculative demand from China) came to a swift halt at the end of January, when silver suffered its biggest daily drop on record and gold plunged the most since 2013. 

As Goldman's top futures trader, Robert Quinn, points out (in a note available at out MarketDesk.ai portal to professional subscribers), according to Commitment of Traders reports, Managed Money sold a record amount of Gold futures surrounding month-end.

The report covering January 27th - February 3rd, which included a -11.4% drop post Trump's nomination of Kevin Warsh for Fed Chair, displayed-$13.7bn of Managed Money selling, driven mostly by liquidation (-$12.1bn).

This marked a 10 year notional record and corroborated the plummet in aggregate open interest.

Over subsequent sessions, elevated price volatility caused additional long unwinds, consistent with flow models for systematic investors.

From February 3rd - 5th, Gold price and open interest lost -0.9% and -$4.3bn respectively. GS Futures Strategists' CTA model estimated some Gold selling. Similarly, the risk parity framework projected widespread commodity liquidation.

However bulls eventually returned alongside renewed Dollar weakness.

After initially proving resilient through Mega-Cap Tech weakness, the broad Dollar index lost -1.0% during February 5th -9th, enabling a +3.9% Gold bounce.

Catalysts included the US administration's signaling of an imminent soft labor report plus Chinese regulators' advice to curb holdings of US Treasuries.

Gold aggregate open interest regained +$2.7bn. Moreover, normalized 25 delta put-call skew cheapened across the curve.

Meanwhile, UBS points out that Silver ETFs have now been sold so heavily in 2026 that it has erased all net buying in 2025...

Many of the factors that underpinned the multiyear rally — heightened geopolitical risks, elevated central-bank buying and lower interest rates — remain in play.

“The recent bout of volatility has called into question the value of gold as a hedge against geopolitical and market swings,” Mark Haefele, global wealth management chief investment officer at UBS Group AG, wrote in a note. 

“We believe such worries are overdone, and that the rally in gold will resume.” 

Many other banks and asset managers, including Deutsche Bank and Goldman Sachs, have backed a recovery in bullion.

Underscoring resilient official demand, the Chinese central bank extended its gold buying to a 15th month in January, and Kazakhstan's central bank bought 66 tons of gold last year, becoming the world's second-largest buyer of the metal, Governor Timur Suleimenov told President Kassym-Jomart Tokayev, boosting overall gold reserves to 345 tons.

Away from the big banks, retail is well and truly involved as Bloomberg reports that Indian investors poured more money into gold exchange-traded funds than equity mutual funds in January, a rare crossover that highlights sustained demand for bullion despite a record-setting surge fueled by geopolitical and monetary risks.

Net inflows into gold ETFs surged to a record 240.4 billion rupees ($2.65 billion), slightly higher than stock fund inflows of 240.3 billion rupees, according to data released Tuesday by the Association of Mutual Funds in India.

The milestone marks one of the strongest monthly endorsements of bullion by local investors in recent years.

“Investors are shifting allocations toward gold against the backdrop of a relatively lacklustre year for equity and stellar returns posted by gold in the same period,” said Nirav Karkera, head of research at Fisdom, a wealth management platform. 

Investment demand for gold will likely stay firm, at least until clarity emerges on the macroeconomic front, he added.

As Bloomberg highlights, the move reflects a wider global pattern.

Gold ETF holdings worldwide remain near a more than three-year high, even after a pullback in prices last week, as the drivers behind the blistering rally - including elevated geopolitical risk and waning confidence in sovereign bonds and currencies - remain in place.

It's not just central banks and retail that are getting (staying) bulled up again. As Goldman concludes, even longer-term investors potentially re-engaged.

As realized volatility subsided, 1 month and 3 month implied volatility also declined. 

However 1 year implied volatility continued to richen and remained near local highs. 

Thus, Goldman's Quinn concludes, long-dated call buying likely manifested.

Tyler Durden Tue, 02/10/2026 - 13:20

Foreign Demand In 3Y Auction Drops As Direct Bid Hits Record High

It is refunding week, which means we get the usual staple of 3, 10 and 30Y auctions. And moments ago, the Treasury just concluded the first of three coupon sales when it sold $58BN in 3 Year paper in a very strong auction.

The auction stopped at a high yield of 3.518%, down from 3.609% in January and the lowest yield since Sept 2025; the auction also stopped through the 3.519% When Issued b 0.1bps, the 6th consecutive stop through for the 3Y tenor.

The bid to cover was a bit disappointing at 2.624, down from 2.650 in January and below the recent average of 2.676. 

Internals were also notable, with Indirects awarded 57.15%, up from 56.50% but well below the recent average of 63.73%. And with Dealers holding 10.94%, that left Directs with a whopping 31.92%, up from 29.50% and the highest on record. This curious dynamic - declining Indirects offset by rising Directs - has been a staple for coupon auctions for the past several years now and we see it accelerating in the future, especially if foreign reserve managers rotate away from the US. 

Overall, this was a solid auction, yet one where the drop in foreign demand was notable, even if offset by record direct buyers

The lack of major surprise explains why 10Y yields barely budged after the auction prices just after 1pm ET.

Tyler Durden Tue, 02/10/2026 - 13:19

US No Longer Wants To Pursue Its Own Ukraine Peace Proposal, Kremlin Charges

Authored by Dave DeCamp via AntiWar.com,

Russian Foreign Minister Lavrov said in an interview published on Monday that the US no longer wants to implement a Ukraine peace deal that it previously proposed, the latest sign that there's little chance the grinding war will come to an end anytime soon.

Lavrov claimed that the US and Russia came to an agreement on Ukraine during President Trump and Russian President Vladimir Putin’s summit in Anchorage, Alaska, back in August 2025. He didn’t elaborate on the details of the potential deal, but it's believed to involve Ukraine ceding territory it still controls in the Donbas, a condition included in a 28-point peace plan that was later drafted by the Trump administration.

via CNN

"In other words, we were told that the Ukrainian issue must be resolved. In Anchorage, we accepted the United States’ proposal. To put it straightforwardly, they proposed, and we agreed – the problem should be solved," Lavrov told TV BRICS.

"The position of the United States was important for us. Having accepted their proposals, we essentially fulfilled the task of resolving the Ukrainian issue and moving toward comprehensive, broad, mutually beneficial cooperation."

The Russian diplomat said that despite the "positive" summit, the US began imposing sanctions on Russia a few weeks later and has continued the economic pressure.

"New sanctions are imposed, attacks on tankers are staged in international waters in violation of the UN Convention on the Law of the Sea, and India and other partners are discouraged from purchasing affordable Russian energy, while Europe has long prohibited such purchases, forcing them to buy American liquefied natural gas at significantly higher prices," he said.

Lavrov added that he didn’t see a "promising future in economic terms" when it comes to US-Russia relations. "Thus, in the economic sphere, the United States has effectively declared a goal of economic domination," he said.

Elsewhere in the interview, which focused on Russia’s relationship with other BRICS nations, Lavrov said the Biden administration has turned the US dollar into a "weapon," prompting Russia and other countries to reduce their reliance on the US currency.

"Under the Biden administration, the United States has taken every step to weaponize the dollar against those it considers inconvenient," he said, adding that the policies have continued under the Trump administration.

Tyler Durden Tue, 02/10/2026 - 13:00

'Off The Charts': Retail Is Buying-The-Dip In Software Stocks Like Never Before

Starting on Friday, we have seen a sudden reversal from panic-selling to panic-buying in tech stocks, which has lifted Nasdaq back above its 100DMA...

The headline-grabbing culprit for much of the pain to the downside was Software stocks (IGV as an example of an ETF that tracks the sector), which collapsed as specifically SaaS firms faced 'existential threats' from AI disruption.

That crashed Software valuations down dramatically...

And, suddenly - starting Friday morning - buyers appeared to snap up these newly cheap stocks...

Inflows into IGV - the Software ETF - have soared...

But, the question has been - who's buying?

Well now we have the answer, thanks to Vanda Research:

1M rolling net retail inflows into the iShares Software ETF (IGV) surged to a record $176mn as of close yesterday, more than double the prior peak seen during the late-2024 software drawdown.

This is one of the more aggressive episodes of retail dip-buying in tech, and especially software, that we've observed in our dataset.

Vanda also notes that Amazon ranked as the most bought US stock by retail investors, displacing Nvidia in the last few sessions.

Last Friday, AMZN recorded its largest single-day of net retail buying since Aug 2024.

We also saw decent follow-through buying throughout the session yesterday.

This is in keeping with the theme that retail investors have been opportunistically buying the dip in mega-cap tech after any earnings-driven sell-offs (also seen in MSFT, GOOGL etc.).

The question is - can retail maintain this momentum long enough to get hedgies re-engaged in Software from their near-record low exposure levels

Tyler Durden Tue, 02/10/2026 - 12:43

DHS Shutdown Talks Stall As Democrats Reject GOP Offer, Thune Signals Stopgap May Be Needed

With Republicans demanding election integrity, and Democrats demanding ICE reform, it looks like the Department of Homeland Security may shut down again on Friday after Democratic leaders rejected a White House-backed GOP counterproposal to keep the lights on - which may require a short-term stopgap if they can't agree on something by Friday. 

House Minority Leader Hakeem Jeffries (D-NY) said the GOP proposal is “woefully inadequate” and shows the White House “is clearly not open to” several Democratic priorities aimed at tightening oversight of immigration enforcement.

Jeffries said the offer failed to address requirements for judicial warrants, detention center standards, independent investigations and excessive-force rules. Asked whether the administration would support a ban on federal agents wearing masks, Jeffries said, “That’s an open question.”

“They don’t appear to be open to … ensuring that ICE agents are identifiable in a manner consistent with every other law enforcement agency in the country,” Jeffries said, according to Politico. 

According to the Department of Homeland Security, a government shutdown would make the country less secure, affecting TSA, FEMA, ICE, and Border Patrol operations. Acting ICE Director Lyons said that task forces targeting terrorism and transnational crime would be hit hardest. 

According to Polymarket, there's currently a 74% chance of a shutdown by Saturday. 

Jeffries’ comments followed a late Monday joint statement with Senate Minority Leader Chuck Schumer (D-NY), in which the two Democrats criticized the GOP response as lacking both legislative text and meaningful detail.

“The initial GOP response is both incomplete and insufficient in terms of addressing the concerns Americans have about ICE’s lawless conduct,” the leaders said. “Democrats await additional detail and text.”

The White House counteroffer on DHS funding is woefully inadequate.

Try again. pic.twitter.com/k5JIUjXLpW

— Hakeem Jeffries (@RepJeffries) February 10, 2026

Punchbowl News asked Jeffries about whether he things Republicans are serious about cutting a deal, to which he replied:

“It’s clear to me that House, Senate Republicans and the White House, they’re all on the run. These people are falling apart. They’re losing election after election. They’ve lost the public. Donald Trump is at historically low approval ratings … And so our view is dramatic reform is necessary with respect to DHS before a funding bill moves forward.”

Thune keeps CR on the table - conditionally

Republicans, meanwhile, are trying to keep negotiations alive while acknowledging the clock is running out. Senate Majority Leader John Thune (R-SD) said Tuesday that negotiations aren't dead, but GOP leadership is contemplating next steps if talks don’t advance quickly.

“There are things I think on probably both sides that are non-negotiables,” Thune said. “But I do think there are a number of things in the range of common ground.”

Thune said Republicans may begin laying procedural groundwork for a short-term stopgap known as a continuing resolution (CR) - framing it as a fallback option, not a foregone conclusion - if negotiations fail to produce an agreement in time. Any shutdown-averting measure would require support from at least seven Senate Democrats, he added.

The existing funding patch for DHS expires Friday. Without action, the department, which employs more than 260,000 people, would face a partial shutdown.

On the Senate floor, Schumer struck a more measured tone than Jeffries, saying Democrats “need to see more from Republicans very soon.”

“What Democrats propose is the definition of common sense,” Schumer said. “We simply want ICE to follow the same standards that most law enforcement agencies across America already follow.”

Key demands, limited overlap

While the GOP counteroffer has not been publicly detailed. But White House allies have indicated that at least one Democratic demand - requiring federal law enforcement officers to obtain judicial warrants before entering private property - is not under consideration.

Other proposals, including mask prohibitions, ID display requirements and restrictions on where ICE agents can operate, would require significant Democratic concessions to gain administration support, according to people close to the White House.

Still, the exchange of offers has given GOP leaders cautious optimism that talks could continue - particularly as senators hope to leave Washington by Thursday for the Munich Security Conference and other overseas delegations.

“It depends on whether we’re making progress or not,” Sen. Jeanne Shaheen (D-NH) said Monday. “We’ve got some time. Hopefully people will be working to try and get something done.”

The length of any short-term funding patch, if needed, remains unresolved. GOP appropriators have pushed for at least a two-week extension, though Thune said the duration “will have to be negotiated.”

Tyler Durden Tue, 02/10/2026 - 12:20

What Good Is 15% Growth If It's Matched With 15% Unemployment?

By Michael Every of Rabobank

Mr. 15%: Trump stated if Fed Chair Warsh does his job, US growth could be 15% or higher. It’s unclear if that’s annual, exceeding China’s early spurt, or over the remaining two-and-a-half years of his presidency, so higher than China today, or nominal or real. Yet the key signal for those who called Warsh a ‘hawk’ is that the Fed is going to run the economy hot. That’s as the FT notes, ‘Bash All Day, Buy All Night’, explaining “Why foreigners keep pouring money into America” despite attacking it verbally all the time.

For now, signals are ice cold and red hot. The Wall Street Journal claims ‘Job Hunters Are So Desperate That They’re Paying to Get Recruited.’ However, trucking signals point to a significant upturn ahead led by manufacturing. Already in the 15% camp is AI, where Alphabet is lining up a 100-year sterling bond sale and, as Bloomberg puts it, ‘Memory Chip Squeeze Wreaks Havoc in Markets, With More to Come.’ Relatedly, the US is reportedly to exempt Big Tech from upcoming chip tariffs, with exemptions based on FDI commitments from Taiwan’s TSMC. That shows an expected pragmatic refinement of US neo-mercantilism in line with past phases of such political economy.

In the US, AI is now being embraced by many firms in ways which may genuinely boost productivity beyond what old mindsets and models can compute. Yet not all AI is equal. Reuters warns, ‘As AI enters the operating room, reports arise of botched surgeries and misidentified body parts’; Axios adds, ‘People are using AI for legal advice and it's driving lawyers bananas.’ So should the idea of mass unemployment in many sector: what good is 15% growth if matched with 15% unemployment?

Old-fashioned oil, and other commodity constraints, will also have something to say about 15% growth. The US military is still surging into the Middle East, as Iran is reportedly ready to “dilute” its highly enriched uranium if all sanctions lifted. Yet with fresh US guidance to ships transiting Strait of Hormuz issued, markets will have to wait and see if this ends like Venezuela or with a deal (bearish oil), or like Iraq (bullish oil).

Mr. 1.5%: In Germany, Bosch is to lay off 20,000 workers as deindustrialisation snowballs, yet German rearmament continues. The latter is boosting GDP growth, but without recovery in other industries (and why assume that?), current trends project a very different German economy ahead - more so if Europe doesn’t make the weapons it rearms with. Yet as the US hands over two key NATO command posts to Europeans, ‘France and Germany’s next-generation fighter jet project is ‘dead’’.

On the broader European push to decouple from the US -- as it signs up to a US critical minerals plan which implies the complete opposite-- the FT reports ‘EU failing to implement economic fixes as single market withers’, and ‘European alternatives to Visa and Mastercard ‘urgently’ needed’; yet Politico claims this week will show ‘Macron sells a vision of ‘Made in Europe’ that Merz and Meloni aren’t buying’, while ‘European industry revolts over EU plan to weaken carbon border tax’ (Politico), which argues the opposite What is the EU grand macro strategy, exactly?

For now, it appears defensive in a different sense. As Politico also notes, ‘Bank of France chief’s surprise exit stokes suspicion among Macron’s opponents’, and the “Governor’s departure allows the French president to future-proof the central bank against a far-right government.” That’s as the Economist underlines that the far right, at 24%, is now the joint largest single faction across European elections.

Equally, while Europe is considering issuing more Eurobonds to back Euro stablecoins, and ‘has a plan to challenge the dollar’s global role’, “The sticking point is… changing established practices in third countries using dollars... As a next step, the Commission proposes to "obtain a better understanding of the obstacles for the Euro’s wider use, while fully respecting national choices regarding monetary arrangements." Markets will be very happy to explain it to them.

Mr. 1.5%: UK PM Starmer said he’s “not prepared to walk away” after calls for his resignation, but that doesn’t mean he won’t be pushed by his cabinet or the Labour Party. Former Deputy Leader Rayner, under investigation for her tax affairs, briefly had a ‘Rayner for leader’ website up, showing this process is underway. Markets are unhappy about another bout of UK political instability, combined with a possible populist left policy direction ahead.

Mr. 1.5%: In Australia, the RBA just forecasted the worst medium-term economic growth ever – 1.6% annual average through to 2028. Given expected population growth, that’s almost nothing per capita. Even if it’s the Aussie opposition, not government, that’s in turmoil for now, that may not stay the case for long.

Mr. 1.5%: Canadian PM Carney is reportedly discussing the idea of an early federal election to secure a majority. That’s as Trump threatened to bar the new US-Canada bridge from opening. One can see the election platform there already. What one cannot see is a growth model that hits even 1.5% sustainably, and per capita, if US-Canada tensions remain that high.

Mrs. 1.5%: After Japanese PM Takaichi’s landslide election win, where will she go on fiscal, defence, and foreign policy – and what will the BOJ do in response? Will we see crucial, controversial constitutional change to allow for broader rearmament and military deployment? One thing is for certain: Japan will be part of the Trumponomics geoeconomic and geopolitical nexus… and does that imply it can grow at what for it would be the giddy heights of 1.5%?

What %?: China warned its banks to reduce US Treasury holdings (selling to whom?) over worries about market volatility ahead (why now when one looks at recent vol in gold and Bitcoin, etc?). It also officially banned any form of private sector CNY stablecoins from being issued, making the dividing line with soon-to-emerge US dollar stablecoins crystal clear.

What %?: The Fed’s Waller said Trump-induced crypto euphoria may be fading, Bostic said confidence in the US dollar is coming into question, and Miran added the Fed should do QE in a crisis, but not otherwise. What constitutes a crisis?

What %?: Saudi Arabia’s $925bn sovereign wealth fund is set to announce a strategy revamp that will emphasize industry, minerals, AI, and tourism, while scaling back mega projects. That kind of investment reallocation is being seen globally in most, but not all, places: what GDP growth rates will it record in doing so?

Tyler Durden Tue, 02/10/2026 - 12:00

Insurance Brokers Extend Monday's Plunge On Fears AI Is Coming For Them Next

The rolling AI disruption wave, which most recently crushed the software sector, slammed insurance brokers on Monday with losses extending on Tuesday, as most names in the space slumped following reports from Reinsurance News and others that OpenAI approved the first AI insurance app on ChatGPT, built by Spanish digital insurer Tuio.

The insurance brokerage space dived 9% on average on Monday in reaction to the news: among the worst performers were Willis Towers Watson which experienced the steepest decline, its shares falling 13%. Arthur J. Gallagher dropped 9.4%, while Aon shed 8.5%. Ryan Specialty and Brown & Brown fell 8% and 7% respectively, with Marsh & McLennan also down 7%. Insurer AIG saw a more modest decline of 2%.

The market reaction came after OpenAI announced that Tuio’s app, powered by WaniWani’s AI distribution infrastructure, allows ChatGPT users to receive personalized home insurance quotes directly through conversation, with purchasing capabilities coming soon. This marks the first time an insurance provider can distribute products and offer quotes directly within an AI platform.

According to OpenAI, the new capability removes traditional friction points in insurance purchasing by eliminating forms, calls, and intermediaries. Tuio’s AI app collects relevant information through natural conversation and returns personalized quotes from regulated carriers in real time, Investing.com reported.

Some investors expressed confusion about the market reaction, questioning why commercial insurance brokers were so heavily impacted when the current application focuses on home insurance. Some argued that insurance brokers dealing with specialty products might be better insulated due to the complexity of those offerings.

Banks promptly came to the sector's defense with Goldman underscoring the investor confusion, and writing that “the immediate feedback still is a degree on confusion & the top question is 'Why would this primarily impact the brokers (who primarily do commercial .. think there's only home insurance at the majors for high net worth)' .. with a few arguing it's 1) more negative for personal insurance carriers given greater price transparency/shopping/competition, and 2) Insurance brokers dealing in more specialty products should be better insulated given complexity.

UBS also was quick to defend, with analyst Brian Meredith saying he remains a buyer of the brokers and "views the pullback as an attractive entry point for his preferred broker names: Marsh, Goosehead Insurance and Willis Towers Watson."

Meredith added that concerns around broker disintermediation have been around for decades, with insurance brokers still the principal means of distribution for commercial insurance products, and independent/captive agents accounting for more than two-thirds of personal lines insurance distribution. Brian said brokers remain essential intermediaries for a complex purchasing decision.

He continues to favor the insurance brokers in 2026 as he believes growth expectations have bottomed with potential upside in a good economic environment. "Valuations are attractive on a relative and absolute basis and reflect a "soft" market."

Then again, as Goldman concludes, there's certainly a degree of 'don't fight the narrative' .. and this is all very fresh/fluid at the moment.”

And if the ongoing rout in the software space is any indication, there is much more pain to come. 

Tyler Durden Tue, 02/10/2026 - 11:45

Zuckerberg Follows Billionaire Exodus To Florida As California Pushes New Wealth Tax

Once again, the pattern is familiar: raise taxes in California, and watch the private jets head east. 

Mark Zuckerberg may soon be adding Miami to his ever-growing list of luxury addresses. According to people familiar with his plans, the Meta founder and his wife, Priscilla Chan, are exploring a home on Indian Creek Island—an ultra-exclusive, heavily guarded neighborhood often called “Billionaire Bunker”, according to Bloomberg.

The tiny island is already packed with famous residents, including Jeff Bezos, Tom Brady, Jared Kushner, and Ivanka Trump.

With an estimated fortune north of $200 billion, Zuckerberg already owns multiple properties across California, Hawaii, Washington, D.C., and near Lake Tahoe. It’s not clear whether Florida would replace any of those homes or just become another stop on his real estate tour.

But the timing is telling. Bloomberg writes that California is considering a new wealth tax aimed at billionaires, including taxes on unrealized gains. The proposal has rattled investors and helped push several tech leaders out of the state. When Democratic policies start biting, it seems many billionaires suddenly “fall in love” with Florida.

Chamath Palihapitiya wrote on X: "With Zuck’s move to Florida, California’s total taxable wealth from billionaires has plummeted to well under $1T from over $2T just a few weeks ago. The loss of this tax revenue was totally avoidable but is now forever. All because Gavin Newsom stood motionless as this stupidly written bill, from a fringe union and a handful of socialist academics with an axe to grind, meandered its way into the public conversation without any action from him and freaked everyone out."

"These were all people that were paying 13%+ in state income tax every year WITH NO COMPLAINTS UNTIL A FEW WEEKS AGO. And now, for the rest of time, the lost tax revenues from these folks will have to be paid for by the middle class because they are the only group left in California large enough that you can tax to fill the hole," he continued.

With Zuck’s move to Florida, California’s total taxable wealth from billionaires has plummeted to well under $1T from over $2T just a few weeks ago.

The loss of this tax revenue was totally avoidable but is now forever. All because Gavin Newsom stood motionless as this stupidly… https://t.co/lJpzhTkMH6

— Chamath Palihapitiya (@chamath) February 10, 2026

"He’s forsaken the middle class instead of managing the budget, managing the deficit, eliminating even a portion of California’s gargantuan waste and abuse. He could have done any of these things at any point over the past 7+ years. But he was silent. And now California’s budget will implode and he wants to run for President."

He isn’t alone in the migration. Google co-founders Larry Page and Sergey Brin have recently bought expensive homes in South Florida, adding to the region’s growing reputation as Silicon Valley’s backup headquarters.

Indian Creek remains one of the most exclusive spots in the country, with private security, limited access, and a golf course at its center—perfect for executives who prefer their privacy and their taxes equally protected.

Zuckerberg has also been spending more time around former President Donald Trump, visiting Mar-a-Lago in Palm Beach on several occasions.

Meanwhile, California’s proposed ballot measure would impose a one-time 5% tax on billionaires to fund social programs. In response, wealthy donors have poured millions into campaigns opposing it. 

Tyler Durden Tue, 02/10/2026 - 11:20

Winter Storm Triggers $15 Billion Power Surge On Key U.S. Grid

A brutal January cold snap sent electricity prices soaring across the largest U.S. power grid, as operators scrambled to meet surging heating demand and prevent outages, according to Bloomberg.

On the PJM Interconnection system — which supplies power to roughly one-fifth of Americans — wholesale electricity costs reached $15.38 billion for the month, more than double the $7.34 billion recorded a year earlier, according to Joe Bowring of Monitoring Analytics LLC.

The early figures suggest households could soon face higher utility bills, a sensitive political issue after energy prices influenced several gubernatorial races last year. The spike came alongside sharply rising natural gas prices, which hit multi-year highs across much of the East Coast and set records in some regions.

Bloomberg writes that despite the strain, the grid largely held up during the extreme weather. “...happy surprise,” said Judy Chang of the Federal Energy Regulatory Commission at a Washington conference. “We are not over it yet, but I’m hoping that the next week, too, we will survive. It’s a severe situation.”

Energy purchases drove most of the increase, climbing to $12.47 billion from $5.67 billion last January. Meanwhile, emergency measures to bolster supplies — including activating rarely used generators and covering fuel costs — more than doubled to $849 million.

Adding to the pressure, PJM is experiencing rapid demand growth as utilities expand capacity for data centers and artificial intelligence, further tightening available supplies.

Obviously, bringing more nuclear power plants online could ease this pressure over the long term by adding large amounts of reliable, round-the-clock electricity that isn’t dependent on weather or volatile fuel markets. Unlike natural gas, nuclear generation is insulated from price spikes during cold snaps, and unlike wind or solar, it can operate at full capacity regardless of conditions.

Expanding nuclear capacity would strengthen grid resilience during extreme weather, stabilize wholesale prices, and reduce the need for costly emergency measures—helping protect consumers from the kind of winter-driven cost surges seen this January.

Tyler Durden Tue, 02/10/2026 - 10:40

Judge Blocks California's Law Mandating Federal Agents Remove Masks

Authored by Jill McLaughlin via The Epoch Times,

A federal district court judge partially blocked a California law barring law enforcement officers from wearing masks in a Feb. 9 ruling, finding the law discriminated against federal officers.

District Court Judge Christina Snyder ruled in favor of the Trump administration, prohibiting the state from enforcing its No Secret Police Act—which was scheduled to go into effect earlier this year—against federal law enforcement officers.

The federal government sued California, challenging the law as well as with another law—the No Vigilantes Act, that requires federal officers to wear identification. Snyder ruled that the second law was not discriminatory.

California had agreed to pause enforcement of the laws, which went into effect on Jan. 1, while the Trump administration challenged them in court.

Attorney General Pam Bondi praised the court’s decision on Feb. 9.

“These federal agents are harassed, doxed, obstructed, and attacked on a regular basis just for doing their jobs,” Bondi posted on X.

“We have no tolerance for it. We will continue fighting and winning in court for President Trump’s law-and-order agenda—and we will always have the backs of our great federal law enforcement officers.”

California Gov. Gavin Newsom signed both bills into law last year in response to federal immigration enforcement operations in the state.

The No Secret Police Act prohibited any law enforcement officer from wearing a facial covering while performing official duties unless the agency employing the officer has a policy regarding the covering.

Some exceptions were made for SWAT teams and in other cases.

The No Vigilantes Act requires any law enforcement officer operating in the state to visibly display identification indicating his or her agency and name or badge number when working.

The U.S. Department of Justice (DOJ) argued the two state laws violated the Supremacy Clause of the U.S. Constitution, which mandates that if state laws conflict with federal laws, the federal law takes precedence.

The department also argued that the laws violated the intergovernmental immunity doctrine, which prevents federal and state governments from interfering with each other’s operations.

The DOJ argued that prohibiting facial coverings and requiring identification put officers’ safety at risk as violent crime against federal immigration officers has skyrocketed in recent months.

Department of Homeland Security (DHS) officers stand guard in front of the Edward R. Roybal Federal Building and Detention Center while demonstrators protest in Los Angeles, on Aug. 2, 2025. Apu Gomes/Getty Images

Snyder found the No Secret Police Act did not apply equally to all law enforcement officers in the state, and therefore it “unlawfully discriminates against federal officers,” according to her ruling.

“Because such discrimination violates the Supremacy Clause, the court is constrained to enjoin the facial covering prohibition. California may not enforce the facial covering prohibition of the No Secret Police Act, SB 627 ... against federal law enforcement officers,” she ruled.

The judge denied the federal government’s other challenges.

The state’s law was already receiving pushback by the largest metropolitan police agency in the state. Los Angeles Police Department Chief Jim McDonnell said his officers would not enforce it.

“The reality of one armed agency approaching another armed agency to create conflict over something that would be a misdemeanor at best—or an infraction—it doesn’t make any sense. It’s not a good public policy decision and it wasn’t well thought out, in my opinion,” McDonnell said during a news conference on Jan. 29.

California Attorney General Rob Bonta did not immediately return a request for comment on the ruling.

Tyler Durden Tue, 02/10/2026 - 10:20

The post The Dollar is <i>a</i> Reserve Currency, not <i>the</i> Reserve Currency appeared first on CEPR.

US To Fund Free Speech Initiatives In Europe, Trump Official Reveals

Authored by Kimberley Hayek via The Epoch Times,

The Trump administration announced plans to direct funding toward promoting free speech in Western allied democracies, a senior State Department official said on Monday. The initiative bolsters efforts to counter European online regulations categorized by Washington as censorship.

Under Secretary of State for Public Diplomacy Sarah Rogers discussed the initiative during a trip to Europe. It includes grants to support free expression, a result of concerns about rules such as the European Union’s Digital Services Act and Britain’s Online Safety Act.

These laws, which E.U. officials say aim to deter hate speech and misinformation, have been scrutinized by U.S. officials as restricting the free speech of American tech firms and suppressing immigration policy critiques.

“One way my office is going to operate differently is we’re going to be very forthright and transparent about everything we do,” Rogers said during a panel discussion in Budapest on Monday. She added that her role allows directing U.S. funding through grants, stating, “I want to promote free speech in Western allied democracies, and ... that’s what my grantmaking is going to be doing.”

Rogers, appearing alongside a top aide to Hungarian Prime Minister Viktor Orbán, underscored the importance of free speech for democracy.

“The United States government, via me, but not only me, has been engaging aggressively on the issue of free speech, because you don’t have self-governance without freedom of speech, you can’t have a democratic deliberation if viewpoints are proscribed from the public square,” she said.

Rogers is scheduled to stop in Dublin, Budapest, Warsaw, and Munich to discuss digital freedoms with officials and others.

The administration’s December National Security Strategy said that European leaders were censoring speech and suppressing opposition to immigration policies, warning of the continent’s “civilizational erasure.”

Rogers said European polls showing European views on migration are similar to those in the United States.

The United States imposed last month visa bans on a former European Union commissioner and four anti-disinformation activists. The administration labeled them agents of censorship for working to regulate U.S. social media platforms. European leaders lambasted the bans. They defended the commissioner and activists’ rights to push for regulations on foreign companies operating locally.

U.S. Secretary of State Marco Rubio revealed the designations on Dec. 23, 2025. He called the individuals “agents of the global censorship-industrial complex” and blocked their entry to the United States.

‘Anti-Racism’ Strategy

The European Commission unveiled a new “anti-racism” strategy on Jan. 20, aiming toward a “Europe free from racism” with increased anti-discrimination enforcement and training.

The Commission said the training will help civil servants “recognise and tackle racial bias, while fostering greater cultural awareness and sensitivity.” It also requires European educators to “address teacher training and professional development on diversity and inclusion, as well as promoting diversity in the teaching profession itself.”

Eric Kaufmann, a professor at the University of Buckingham, said the strategy “betrays an illiberal moralizing worldview” that could lead to “suppressing free speech and asphyxiating the historical pride and culture of Europe’s ethnic majorities.”

Jacob Reynolds of think tank MCC Brussels called it a “slide to cultural socialist ideas.”

Reynolds previously told The Epoch Times that he believes that the policy “has got nothing to do with racism” and is “a classic example of how the EU proceeds to amass for itself more powers to regulate orderly life and get involved in politics.”

“This is not [anti-racism], as ordinary people understand it,” he said. “This is the kind of woke [diversity, equity, and inclusion] agenda that has come to dominate the way that lots of civil servants, lots of academics, lots of civil society organizations think.”

“E.U. in this strategy is clearly not concerned about the things that ordinary people would understand as racism, discrimination against people on the basis of the [color] of their skin, but is actually about regulating thought,” he told The Epoch Times.

The initiative increases funding for the Citizens, Equality, Rights, and Values program, with a proposal for 3.6 billion euros ($4.2 billion) for 2028–2034 to aid civil society projects.

Tyler Durden Tue, 02/10/2026 - 09:40

"Today, We Are Preparing For War": French Defense Chief Says Europe Has Until 2030, Cites Russia As Biggest Threat

Via Remix News,

France and Europe have four years to prepare for war, said Fabien Mandon, chief of the defense staff of the French Armed Forces, who cited Russia as Europe’s biggest threat.

His speech at a major naval conference outlined that France, as well as its allies, must take into account that this war will break out in the near future and that the French military must be ready by 2030.

“Today, we are preparing for war,” he said, according to BreakingDefense.

During his speech at the naval conference, Mandon stated that France is not prepared for war and the country had “an insufficient number of ships and armaments.”

He stated the nation needs “more missiles with greater range and lethality.” 

Mandon recently made headlines for stating that Europeans and the French must be ready to lose children in a war, stating:

“You have to accept that you will lose your children,” which is necessary to defeat Russia during a November speech at the National Congress of French Mayors.

His words caused national shock, while the representatives of the parliamentary parties protested sharply in connection with his comment.

As in November, he named Russia as the main source of the threat of war.

Read more here...

Tyler Durden Tue, 02/10/2026 - 09:01

Harley-Davidson Shares Plunge As Bike Demand Stalls

Harley-Davidson shares plunged in premarket trading after the company reported an unexpected decline in motorcycle shipments and a far deeper-than-expected sales miss in the fourth quarter. The results suggest the company is still battling soft demand, with the brand having peaked with boomers and struggling to connect with younger riders.

Global fourth-quarter bike deliveries fell 4% to 13,515 bikes versus expectations of 16,408, while revenue came in at $496 million compared with about $749 million expected (per Bloomberg Consensus estimates). The adjusted loss of $2.44 for the period was more than twice the expected amount.

In premarket trading, Harley shares plunged nearly 12%, the sharpest decline since the 16% drop on April 25, 2024. The stock is trading near Covid-era lows and not far above its 2009 trough.

CEO Arturo Pires de Lima, who took over in October, is focused on reducing excess inventory and repairing dealer relationships amid elevated interest rates that have strained consumers.

Looking at Harley's annual revenue, there's a clear surge in the post-Dot Com period that builds into the 2008 peak. That upswing coincided with the boomer retirement wave, as the oldest boomers became eligible for early Social Security retirement benefits in 2008.

At that time, boomers were the economy's largest spending cohort, so it stands to reason that some of them, now retired, were buying all sorts of items that reminded them of their younger days: bikes, Packards, second and third homes and whatever else.

But note that, since 2008, annual revenue, instead of trending up and to the right, has been trending down, as the brand never solidly connected with millennials or younger generations as it did with boomers.

Harley tried electric bikes, which failed miserably. It's in a reset period.

Tyler Durden Tue, 02/10/2026 - 08:50

US Retail Sales Disappoint In December As Small Business Optimism Dips

Today's Retail Sales data is for December and so should be 'clean' from the perspective of the January storms which dramatically reduced consumers ability to spend year-to-date, as illustrated by BofA's 'rest of US' spending indicator...

After a big bounce in November, expectations were for a decent 0.4% MoM rise in retail sales to end the year (despite the plunge in consumer confidence signaled by UMich), but the actual print was a big disappointment with headline retail sales unchanged MoM in December. That is the weakest YoY retail sales growth since Sept 2024...

Source: Bloomberg

Motor Vehicle and Clothing sales tumbled the most while spending on Building Materials and Food & Beverage rose the most...

Core Retail sales was also unchanged MoM (a big miss from ther +0.4% MoM exp)...

Worse still the 'Control Group' which plugs into the GDP calculation, fell 0.1% MoM (far worse than the 0.4% MoM expected).

Of course, this December disappointment comes after a strong November so before you panic, perhaps some smoothing and seasonals are at play.

Interestingly, 'real' retail sales (admittedly crudely adjusted via CPI) actually decline on a YoY basis in December...

Perhaps it's time for this alligator's mouth to snap shut?

Source: Bloomberg

In addition to disappointing retail spending, sentiment among US small-business owners edged down in January for the first time in three months as optimism about the economic outlook eased. The NFIB Optimism index slipped 0.2 point to 99.3, with 7 of the 10 components that make up the gauge decreased, while three increased.

Taxes continued to rank as the single most important problem for small firms, followed by quality of labor.

However, a net 16% of owners said they expect inflation-adjusted sales to improve in the next three months, up 6 percentage points from December and the largest share in a year. Also, a net 15% of owners reported that now would be a good time to expand their business, a six-month high.

Tyler Durden Tue, 02/10/2026 - 08:40

Futures Drop As Traders Brace For Flood Of Data And Earnings

US equity futures are lower, reversing earlier gains and trading near session lows in a narrow, jitter overnight session as traders prepare for a heavy slate of earnings and readings of consumer sales and small-business due later. As of 8:15am ET, stock futures were muted, down 0.1% after earlier rising 0.2% and approaching last month’s record levels after an artificial-intelligence-driven selloff and subsequent rebound over the past week. Nasdaq futures drop -0.2% with small caps outperforming as bond yields drops by 1-3bps and the USD is flat. The downbeat mood doesn’t match the bullish tone in Asia, where stocks hit fresh records while European bourses are green across the board. Pre-market, Mag 7 are mixed, Semis are bid with SMH leading IGV as TSMC sees revenue +37% YoY in Jan. Financials and Industrials are leading Cyclical outperformance with healthcare the best performing sector within Defensives. Commodities are weaker but with vol lower, it appears to be profit-taking than what we have seen YTD. Today’s macro data focus is on Retail Sales, weekly ADP, Small Biz Survey, and Import / Export prices. 

In premarket trading, Mag 7 stocks are mixed (Amazon +0.7%, Nvidia +1%, Microsoft +0.6%, Tesla +0.8%, Meta +0.1%, Alphabet -0.2%, Apple -0.4%)

• Amentum (AMTM) falls 9% after the government contractor’s first-quarter revenue missed the average analyst estimate, pressured by contract transitions, divestitures and the government shutdown.
• Amkor Technology (AMKR) rises 3% after the semiconductor manufacturing company’s first-quarter revenue forecast was stronger than expected, prompting several analysts to raise their price targets.
• Clear Channel Outdoor (CCO) climbs 8% after agreeing to be acquired by investors led by Mubadala Capital in an all-cash transaction that values the billboard company at $6.2 billion, including debt.
• Coca-Cola (KO) down 4% after offering a 2026 full-year sales outlook with a bottom end of the range that came in below Wall Street estimates. Atlanta-based Coca-Cola sees organic sales growth of 4% to 5%. Analysts expected 5.01% on average.
• Credo Technology (CRDO) gains 17% after the communications equipment company’s preliminary third-quarter revenue was much stronger than expected.
• Datadog (DDOG) rises 9% after the software company’s fourth-quarter results beat expectations on key metrics.
• DuPont (DD) inches 2% higher after the chemicals company reported fourth-quarter adjusted earnings per share that beat the average analyst estimate as healthcare and water technologies segment sales grew.
• Goodyear Tire (GT) is down 9% after the company forecast that global unit volumes will be down in the first quarter, weighing on the profit outlook for the year.
• Harley-Davidson Inc. (HOG) falls 13% after the company reported an unexpected drop in motorcycle shipments, extending its struggles in the face of weak demand and punishing tariffs.
• Ichor (ICHR) gains 15% after the factory automation equipment company forecast adjusted EPS for the first quarter that beat the average analyst estimate. It also reported better-than-expected 4Q results.
• ON Semiconductor (ON) falls 3% after the chipmaker gave 1Q revenue guidance that was just shy of analyst expectations at mid-point, indicating a continued but slow recovery in demand for auto and industrial chips. Business disposals planned this year are also creating a headwind.
• Regenxbio (RGNX) shares tumble 10% after US regulators rejected its gene therapy for Hunter syndrome, underscoring the hard line the Trump administration is taking on drug approvals for rare diseases.
• Spotify (SPOT) rises 11% after the music streaming company reported a record 38 million monthly active users (MAUs) for the fourth quarter, surpassing its guidance for 32 million.
• Upwork (UPWK) shares are down 22% after the online recruitment company’s first-quarter forecast was weaker than expected.

In corporate news, BP halted share buybacks as pressure on the energy major mounts. Tesla’s head of sales for North America is leaving, exiting a position that’s seen substantial turnover in the past year. The Teamsters Union sued UPS, demanding the company shut down its planned buyout program targeting UPS Teamsters drivers.

Markets are experiencing a moment of calm after an artificial-intelligence-driven selloff and subsequent rebound over the past week. Traders are now waiting to see how this week’s data may shape expectations for the Federal Reserve’s interest-rate path.

“What’s at stake with this week’s US data is to know whether we can move from a K- to a V-shaped rebound,” said Kevin Thozet, an investment committee member at Carmignac. “There are signs that the US consumer’s morale is improving, but we’re not there yet. It’s clearly the objective of the Trump administration ahead of the midterms.”

In political news, President Macron of France said the EU needs to get tougher with Trump, who he said is pushing for the “dismemberment” of the bloc. Trump has also threatened to prevent the opening of a new bridge connecting Michigan and Ontario until the US is given compensation and ownership of half of it.  The EPA plans to repeal a policy that provides the legal foundation for rules regulating greenhouse gas emissions. China’s BYD, the world’s biggest manufacturer of EVs, has joined hundreds of companies in pushing to be refunded for duties paid under Trump’s import tariffs.

On the macro front, economists and analysts expect another solid month of retail sales in December, supported by household spending that has remained resilient despite the high cost of living and a fragile employment backdrop. 

Looking at earnings, out of the 302 S&P 500 companies that have reported so far, 79% have beat analyst estimates, while 17% have missed. More US companies are posting quarterly earnings growth, suggesting a sustained broadening beyond technology heavyweights, strategists at Deutsche Bank write. S&P 500 firms are on track to register a 14.5% increase in 4Q earnings, notching a four-year high. 

In Europe, the Stoxx 600 is up 0.1% and switching between small rises and falls. CAC 40 higher after results from Kering boosted luxury stocks.Here are some of the biggest movers on Tuesday:

• Thule shares gain as much as 15% for their biggest one-day gain in 10 months, after fourth-quarter results from the maker of roof and bike racks surpassed expectations.
• Kering shares gain as much as 14%, the most since March 2020, on hopes that the French luxury group is returning to a path to growth following better-than-expected fourth-quarter sales at its Gucci unit.
• Philips shares jump as much as 11%, the most in more than six months, after the Dutch medical technology firm reported better-than-expected results for the fourth quarter and provided guidance for 2026 which Bernstein analysts called “upbeat.”
• Lanxess shares rise as much as 9.8% as Goldman Sachs upgrades the German firm to neutral from sell, saying it sees less of a risk around the balance sheet and signs of positive economic momentum across the European chemicals sector.
• AstraZeneca shares rise as much as 2.3%, reversing an earlier dip, after the UK drugmaker provided upbeat sales guidance for 2026, which offset the weaker-than-expected core operating profit in the fourth quarter.
• Bellway shares rise as much as 5.4% after the UK housebuilder said it has seen a pickup in demand since the start of the important spring selling season.
• Allianz shares drop as much as 2.9%, leading a fall in European insurance stocks after US peers came under pressure on Monday over fears of artificial intelligence disruption.
• TUI shares fall as much as 7.6%, the most since June, as analysts noted slower bookings revenue from Europe’s biggest travel operator as a reflection of the challenging environment.
• BP shares drop as much as 5.7%, most since June, after the oil company suspended share buybacks to strengthen its balance sheet.

Earlier in the session, Asian stocks rose, as technology shares tracked their US peers higher on a revival of artificial intelligence enthusiasm, and Japan’s market extended gains following Prime Minister Sanae Takaichi’s election victory. The MSCI Asia Pacific Index climbed as much as much as 1.4%, set for a fresh record high and third day of gains. TSMC was among the biggest boosts to the region, with January sales surging 37% from last year. Other winners include fellow AI beneficiaries Softbank Group and Alibaba. 
Stock benchmarks also rose in Hong Kong, India and Philippines while shares in South Korea closed little changed.  Risk sentiment has been on the mend in Asia, as global tech shares rebound from last week’s selloff on concerns over high spending levels and business obsolescence due to AI. Investors continue to assess the unfolding earnings season and indications on the path for global monetary policy.  Japanese stocks got a fresh jolt on expectations that the greater parliamentary majority for Takaichi’s party will give her a mandate to increase fiscal spending and cut the sales tax on food. Among fresh tailwinds for the AI trade, the Financial Times reported that US tech giants are set to get a reprieve from forthcoming US tariffs on imported semiconductors. Indonesian equities edged higher even as index compiler FTSE Russell said it will join MSCI in pausing its index review for the country due to the risk of adverse turnover and uncertainty in determining public float. 

In FX, the Bloomberg Dollar Spot Index is also little changed, with the Norwegian krone rising on a surprise inflation jump, while Norwegian bonds are plunging.The Fed’s Bostic says he’s starting to see signs that confidence in the greenback is coming into question. The Fed’s Miran, meanwhile, said the central bank’s balance sheet should be smaller, but should be used during an economic crisis. Yen, Japanese stocks and long-end bonds all rallied on confidence that higher fiscal spending can be absorbed by markets.

In China, the yuan surged to its strongest level since May 2023 after regulators asked banks to limit their holdings of US Treasuries. The news reinforced a broader trend of diversification away from the dollar, potentially accelerating the repatriation of capital into Chinese assets.

In rates, treasuries hold small gains led by long-end tenors, outperforming European bonds ahead of December retail sales data, with January employment report ahead on Wednesday. Treasury yields are 1bp-3bp richer 3bp across the curve with 2s10s and 5s30s spreads tighter by 1bp and 1.5b. 10-year near 4.18% is 2bp richer on the day, slightly outperforming bunds and gilts.  Gilts leading gains in bonds following a turbulent session of political speculation on Monday,  as UK Prime Minister Keir Starmer shored up his position as UK prime minister.  This week’s Treasury coupon auctions begin with $58 billion 3-year note sale at 1pm in New York: the auction has when-issued yield near 3.55%, about 6bp richer than last month’s, which stopped through by 0.1bp; supply cycle includes 10- and 30-year new issues Wednesday and Thursday. IG dollar issuance slate slate includes Bank of England 3Y and IADB 5Y FRN; Google parent Alphabet Inc. headlined Monday’s calendar with a $20 billion multi-tranche offering. Issuers paid about 2bps in new issue concessions on deals that were 5.4 times covered for the two deals.

Money markets continue to price in two Fed rate cuts for 2026, with the first move seen under the likely leadership of Kevin Warsh after Jerome Powell steps down as chair in May. Traders have been debating whether Warsh would represent a more hawkish choice for the top role than other candidates President Donald Trump considered.

Trevor Greetham, head of multi-asset investing at Royal London Asset Management, said stocks are probably being driven more by interest-rate expectations than corporate results at the moment.

“You can see that by the performance of the technology sector and what’s going on with US Treasury yields,” Greetham said. “Recently, when you’ve had rising bonds, you’ve had tech underperformance, which tells you more about the interest-rate part of the calculation.”

In commodities, gold is edging lower but sticking above $5,000/oz, oil prices choppy with Brent holding around $69/barrel.

The US economic calendar includes weekly ADP employment change (8:15am), December import/export price indexes and retail sales and 4Q employment cost index (8:30am) and November business inventories (10am). Fed speaker slate includes Hammack (12pm) and Logan (1pm)

Market Snapshot

• S&P 500 mini little changed,
• Nasdaq 100 mini little changed,
• Russell 2000 mini +0.2%
• Stoxx Europe 600 little changed,
• DAX little changed,
• CAC 40 +0.5%
• 10-year Treasury yield -2 basis points at 4.18%
• VIX +0.1 points at 17.46
• Bloomberg Dollar Index little changed at 1182.98,
• euro little changed at $1.191
• WTI crude -0.2% at $64.24/barrel

Top Overnight News

• Trump will travel to Beijing during the first week of April for a meeting with Chinese President Xi Jinping. BBG
• White House eyes data center agreements amid energy price spikes, while a draft pact seeks to help ensure data centres do not raise household electricity prices and strain water resources or undermine grid reliability.
• Trump said his pick to lead the Federal Reserve can stoke the economy to grow at a rate of 15%, an exceedingly rosy target that nonetheless underscores the pressure that Kevin Warsh will face if confirmed to the role. BBG
• The Trump administration is planning this week to repeal the Obama-era scientific finding that serves as the legal basis for federal greenhouse-gas regulation, according to U.S. officials, in the most far-reaching rollback of U.S. climate policy to date. WSJ
• Alphabet is selling sterling and Swiss franc-denominated bonds for the first time, including an ultra-rare issue of a 100-year note. This follows a bumper $20 billion debt deal in the US to fund its AI ambitions. BBG
• Indian investors put a record $2.65 billion into gold ETFs in January, slightly more than equity funds, underscoring strong demand for bullion amid geopolitical and monetary risks. BBG
• Emmanuel Macron warned that the EU must stand up to Donald Trump. In an interview with newspapers including Le Monde and the FT, Macron said he anticipates a clash with the US over digital regulation. BBG
• TSM (TSMC) January sales grew at their fastest clip in months, a sign of sustained global AI spending even as concerns persist about an industry bubble. The contract chipmaker for Nvidia Corp. reported a 37% rise in January revenue to NT$401.3 billion ($12.7 billion), above the 30% revenue growth TSMC expects for the full year. BBG
• Keir Starmer has managed to shore up his position for now, but low approval ratings and electoral and party challenges put his leadership at risk — even as the UK economy strengthens. BBG
• The Fed’s Stephen Miran advocated a smaller Fed balance sheet while maintaining the option for large-scale asset purchases during crises. BBG
• US Department of Health and Human Services is to cut USD 600mln in public health grants to blue states: BBG

Trade/Tariffs

• India is reportedly in talks with France, Netherlands, Brazil and Canada over a deal on critical minerals.
• Japanese Trade Minister Akazawa said plan to visit US between February 11th to 14th to discuss Japan's investment plan.
• US President Trump posted Canada is building a massive bridge between Ontario and Michigan which Canada will own and built it with virtually no US content, adds " I will not allow this bridge to open until the United States is fully compensated...".

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly higher as the region took impetus from the gains on Wall Street, where the S&P 500 approached closer towards its record levels, and the Nasdaq outperformed as the tech rebound persisted. ASX 200 marginally gained amid continued outperformance in tech, but with advances in the index limited by underperformance in the top-weighted financial sector and weakness in some defensives. Nikkei 225 rallied to a fresh record high near the 58,000 level amid the Takaichi trade and expectations of incoming stimulus, while SoftBank was among the biggest gainers due to its heavy semiconductor exposure. Hang Seng and Shanghai Comp lagged behind their regional counterparts in somewhat mixed trade, with the Hong Kong benchmark led higher by pharmaceuticals, while the mainland was flat amid little fresh drivers.

Top Asian News

• China NPC Standing Committee will hold 21st session on February 25th-26th in Beijing.
• Japanese Finance Minister Katayama said discussions on using entire surplus are planned, but no position has been taken. Indicates that a proposed cut in food sales tax would serve as a temporary solution ahead of the implementation of a new tax credit system.
• China released a white paper on Hong Kong's practice of safeguarding national security, according to Xinhua.
• TSMC (2330 TT) January (TWD) rev. rose 37% Y/Y to 401.3bln (prev. 335.0bln M/M).
• TSMC (2330 TT / TSM) board has approved the issuance of corporate bonds in Taiwan, of up to TWD 60bln in size.

European bourses (STOXX 600 +0.1%) are mostly firmer, but with slight underperformance in the FTSE 100 (-0.4%), which has been pressured by post-earning losses in BP (-5%) and as precious metals move lower. European sectors are mixed. Chemicals leads followed by Consumer Products whilst Travel & Leisure is found towards the bottom of the pile. For Luxury, Kering (+10%) is boosted by strong earnings, where the Co. highlighted it expects to return to growth and improve margins in 2026. Travel & Leisure has been pressured by TUI (-6%), which highlighted weaker markets and airline trading.

Top European News

• UK Cabinet Office has asked all Ministers not to follow Wes Streeting in publishing their messages with Peter Mandelson.
• Mail on Sunday's Hodges reported that his understanding is that UK PM Starmer "is planning some sort of fresh attempt to limit what gets published over the Mandelson saga.".
• French President Macron said the bloc should not be lulled into a false sense of security that tensions with the US over Greenland, technology and trade are over. said:Reiterated called for the EU to raise common debt to raise in AI and quantum computing, energy transition and defence.

FX

• DXY is flat and trades within a 96.79-97.00 range, taking a breather following the losses seen in the prior session. USD-specific newsflow has been lacking this morning, but will pick up later following the release of US Retail Sales and the Employment Cost Index; Fed speak is also due. On the trade front, Politico reported that US President Trump and Chinese President Xi’s summit is reportedly set for the first week of April – though the White House clarified that nothing is set in stone. ING opines that the index could trade within a 96.50-97.50 range over the next few days.
• JPY is the outperformer this morning, in the aftermath of the LDP landslide victory on Sunday. As mentioned in the coverage on Monday, investors are seemingly deriving confidence from the renewed political stability, and trust recent vows by PM Takaichi that she aims to adhere to fiscal responsibility. Moreover, on the monetary policy side of things, markets are increasing their bets of faster BoJ normalisation. JGB pressure also subsided overnight (albeit were already within recent ranges), and the continued strength in the Nikkei will also push JPY bears away. ING, citing local brokers, expects JPY 10tln to enter Japanese equities over the next 3 months – which could see USD/JPY break below 155.00. The pair currently trades around 155.30, and within a 155.08-156.29 range.
• G10s are mixed against the USD; as mentioned, JPY outperforms (+0.3%) whilst the Aussie is the slight laggard, as precious metals pull back a touch. The GBP remains on the backfoot, despite comments from PM Starmer who reiterated that he is to remain in his position – pushing back calls for him to resign. EUR is currently flat; earlier, ECB’s de Guindos failed to move the single currency, as his comments were largely in fitting with the Bank’s latest policy announcement. He stated that the ECB would need to be very vigilant if Chinese exports to Europe increase, via Econostream.
• NOK is stronger this morning after the region’s inflation metrics topped expectations. In brief, Core Y/Y printed at 3.4% (exp. 3%), with the headline metrics also printing above forecasts. Norges Bank has longed reiterated the line that “the policy rate will be reduced further in the course of the year”. Some had seen a cut as early as March/May, whilst SEB saw a cut in June pre-release; following the data the firm said, “we will not change our forecast for a June cut based on this one inflation release, but risks for a later cut have increased". EUR/NOK is currently lower by 0.4%, and trades at the lower end of a 11.3468-11.4254 range.

Fixed Income

• Benchmarks bounce this morning with JGBs firmer overnight, having picked up off post-election lows, USTs rebounding from the pressure after the China diversification report. JGBs firmer by near 30 ticks at best, back to the week's 131.60 opening level.
• Gilts have also rebounded, as the immediate pressure on PM Starmer eased slightly after the Cabinet backed him yesterday and no fresh revelations emerged overnight. As such, the benchmark gapped higher by 23 ticks before climbing to a 90.88 peak, firmer by 37 ticks on the day. However, Starmer's situation remains fraught into the end-February by-election, May local elections and amidst that any fresh revelations about his dealings with Mandelson. On that point, the Mail on Sunday's Hodges reports that Starmer appears to be planning to limit what is published re. Mandelson, and the Cabinet Office have asked Ministers not to publish their personal messages with Mandelson, after Wes Streeting made his available. No move to the 2031 Gilt auction, which was strong.
• Limited newsflow for EGBs thus far. As such, the benchmark is firmer given the bias from above, but with magnitudes more modest as EGBs were not hit directly by the China-UST report or the Starmer situation on Monday. Bunds moved a touch lower heading into a 2031 Bobl outing, which overall follows an improving trend of German outings, but still remains soft; EGBs remain firmer by a handful of ticks.
• Back to USTs, the benchmark is firmer by a handful of ticks at a 112-10 high, looking to last week's 112-16+ peak. The docket is headlined by data (weekly ADP, Retail Sales & ECI) before Wednesday's Payrolls & Friday's CPI; additionally, 3yr supply is scheduled just after 2026 voters Hammack and Logan.
• Germany sells EUR 3.811bln vs exp. EUR 5bln 2.50% 2031 Bobl: b/c 1.65x (prev. 1.41x), average yield 2.40% (prev. 2.47%), retention 23.8% (prev. 23.38%)
• UK sold GBP 3.75bln 4.125% 2031 Gilt: b/c 3.94x (prev. 3.50x), average yield 4.001% (prev. 3.980%), tail 0.2bps (prev. 0.2bps).
• Netherlands sold EUR 1.845bln vs exp. EUR 1.5–2bln 3.25% 2044 Green DSL: average yield 3.388% (prev. 3.176%).
• Alphabet (GOOGL) launches its first GBP debt sale with a 100-year note. To also sell GBP-denominated 3-year, 6-year, 15-year and 32-year bonds.
• Japan sold JPY 250bln 10yr I/L JGB; b/c 3.38x, (prev. 3.46x), yield at lowest accepted price 0.458% (prev. 0.113%). Lowest accepted price 96.05 (prev. 99.00).
• Alphabet (GOOGL) launches its first CHF debt sale, according to Bloomberg.

Commodities

• Crude benchmarks have held onto the majority of Monday's gains, with WTI holding above USD 64/bbl while Brent regains the USD 69/bbl mark. Geopolitical risk premium continues to be priced into the oil market, despite US-Iran tensions easing somewhat following their indirect talks in Oman.
• Nat gas futures have continued to pull back from the surge higher following the Arctic storm, due to warmer weather forecasts in the US. Henry Hub futures continue to near USD 3/MMBtu while Dutch TTF holds below EUR 35/MWh.
• Spot gold continues to hold above the USD 5k/oz, with Monday's session managing to close above the level for the first time since the selloff on January 30th. The yellow metal sold off modestly at the start of the APAC session but has since clawed back earlier losses and is only seeing modest losses of 0.2%, at the time of writing.
• 3M LME Copper trades muted and in tight ranges, as the Chinese New Year holiday looms. Buying of the red metal is expected to be light going into, and throughout, the holiday period, with buying expected to resume when the festive period ends.
• Bank of China (3988 HK) is to increase margin requirements for gold deferred contracts, effective from the 11th of February.
• Venezuela's largest refinery, Amuay, is out of service after a power blackout, according sources.

Central Banks

• US President Trump said he doesn't know if the Powell probe is worth holding up Warsh, adds Powell is incompetent, but the question is if he's corrupt.
• Fed's Miran (Voter, Dove) said no significant tariff-driven inflation seen so far, and interest rates should be much lower than current levels.
• US President Trump said in a Fox Business taped interview that the US economy can grow at 15% if Fed nominee Walsh does a job that he's capable of.
• BoJ is to submit nominee to replace board member Noguchi on February 25th.
• ECB's de Guindos said the ECB would need to be very vigilant if Chinese exports to Europe increases, describes the economy as more resilient and inflation is moving towards target, via Econostream. Reiterates the current level of rates are appropriate. Recent euro strength is fully consistent with the assumptions included in the ECB's projections.
• Monetary Authority of Singapore chief economist said monetary policy stance remains appropriate.

Geopolitics: Ukraine

• Russia's Kremlin announce that they have no clear date for the next round of discussion with Ukraine.

Geopolitics: Middle East

• Iran warns of destructive influence on diplomacy ahead of Israeli's PM Netanyahu's trip to the US.
• White House officials said US President Trump does not support Israel annexing the West Bank, adds stable West Bank is key to Israel's security and align with the administration's peace goals.

Geopolitics: Other

• EU Defence Commissioner Kubilius said the EU needs to take responsibility for its defence and that replacing US strategic enablers with European ones should be a priority.
• China holds 2026 work conference on Taiwan affairs, while Chairman of the Chinese People's Political Consultative Conference Wang Huning said will resolutely crack down on Taiwan independence, according to Xinhua.
• China’s embassy in London said it has consistently opposed UK interference in China’s internal affairs, including the BNO issue. said:Urges British side to follow the general trend and cease political interference, while it accused Britain of resorting to tricks and described its behaviour as contemptible.
• Philippines ambassador to Washington said China seems ready to find ways to ease South China Sea tensions through cooperation.
• US military said it carried out a strike on a vessel in the eastern Pacific, killing two and leaving one survivor.
• US Interior Secretary Burgum said Greenland deal is moving forward with progress.

US Event Calendar

• 6:00 am: United States Jan NFIB Small Business
• 8:30 am: United States Dec Import Price Index MoM, est. 0.1%
• 8:30 am: United States 4Q Employment Cost Index, est. 0.8%, prior 0.8%
• 8:30 am: United States Dec Retail Sales Advance MoM, est. 0.4%, prior 0.6%
• 8:30 am: United States Dec Retail Sales Ex Auto MoM, est. 0.4%, prior 0.5%
• 12:00 pm: United States Fed’s Hammack Speaks on Banking and Economic Outlook
• 1:00 pm: United States Fed’s Logan Speaks at Asset Management Derivatives Forum

DB's Jim Reid concludes the overnight wrap

A rare moment of peace descended yesterday: not a single new disruptive AI model has appeared since at least last Thursday! The lull gave me just enough time to investigate who “Bad Bunny” is, having been entirely unaware of their existence before the Super Bowl halftime show. After a few clips from the most streamed global artist of 2025 it’s safe to say I won’t listen again. Talking of rabbits, the market bounce continued yesterday, with the S&P 500 (+0.47%) closing just shy of its record high, while in Europe the STOXX 600 (+0.70%) hit another record high. Tech stocks led the way, posting a strong rebound from their recent slump, and the S&P 500’s software component (+3.36%) had its best daily performance since May last year, with little sign of the concern that affected markets last week. The rebound also supported other asset classes including gold (+1.88%) but overall it was a fairly quiet day on the news front. Treasury yields saw a modest decline following some unusual labour market comments from NEC Director Kevin Hassett ahead of tomorrow’s jobs report.

Hassett said on CNBC that markets should expect “slightly lower jobs numbers”, but that this “shouldn’t trigger any panic.” While this was more a comment on the general jobs trend amid slowing population growth and rising productivity, it still created some fears over a weaker number for the delayed January jobs report tomorrow, particularly after the JOLTS survey last Thursday showed December job openings at their lowest since 2020. Treasuries saw a modest rally following Hassett’s interview, with 2yr yields closing -1.3bps lower at 3.49% and 10yr yields -0.5bps at 4.20%. They are -0.8bps and -1.5bps lower again this morning.

Yields had been higher earlier, and 30yrs still closed +0.7bps at 4.86% following a Bloomberg report that Chinese regulators had directed financial institutions to limit purchases of US Treasuries. So that limited the performance of bonds but like the rest of the curve, 30yrs are rallying (-1.5bps) this morning.  The dollar is flat this morning but yesterday fell -0.77%, posting its second-worst day of 2026 so far.
By contrast, US equities had a strong day, with the S&P 500 (+0.47%) closing just 0.2% from its all-time high. Technology stocks led the gains after last week’s struggles, with Oracle (+9.64%) the second best-performer in the S&P500 though its shares are still down over -50% from their September peak. The Mag-7 were up +1.10% led by Microsoft (+3.11%) and Nvidia (+2.50%). And the equal-weighted version of the S&P 500 (+0.07%) reached a new record, even as its advance was limited by losses in defensive sectors including healthcare (-0.86%) and consumer staples (-0.86%).

Earlier on, UK politics was back in the headlines, with gilts coming under fresh pressure amidst a further round of questions about PM Starmer’s position. Gilts had struggled from the open, given the weekend news that Starmer’s chief of staff had resigned. The selloff then reached its peak after Labour’s leader in Scotland publicly called on Starmer to resign, with investors concerned that a new PM may be more likely to ease the fiscal rules and borrow more. At the intraday peak, 10yr gilt yields were up by over +8bps, but this move faded back to just +1.2bps higher after the entire cabinet publicly came out in support of Starmer. Similarly, the 30yr gilt yield was +9bps intraday, before closing up just +1.0bps. Still, UK assets in general underperformed, with the FTSE100 (+0.16%) eking out only a marginal gain.

There was stronger performance elsewhere in Europe, with multiple indices like the STOXX 600 (+0.70%), FTSE MIB (+2.06%), and DAX (+1.19%) all posting strong gains. Sovereign bonds also rallied, with yields on 10yr bunds (-0.1bps), OAT (-0.4bps) and BTPs (-1.6bps) falling back. Those moves came as markets slightly dialled up the chances of another ECB rate cut this year from 22% to 29%. While ECB President Lagarde said little new on policy compared to last week’s press conference, Bundesbank President Nagel said that while there was no current need for the ECB to react to below target inflation, they could adjust policy in either direction.

Earlier on, we also heard that Banque du France Governor Villeroy will be stepping down from his position on June 1, before the end of his term in October 2027. Villeroy said his decision to step down was a “personal” one but it means that President Macron will now get to nominate the next Governor for a new six-year term, rather than the pick being left until after the French Presidential election due next spring. It also adds to the upcoming changes of some of the key figures on the ECB Governing Council, including Vice President de Guindos who is finishing his term in May.

Elsewhere in markets, Brent crude oil prices rose +1.45% to $69.04/bbl after the US Maritime Administration warned US ships to stay “as far as possible” from Iranian territory. So that added to fears about a potential escalation, with oil prices continuing to fluctuate on various headlines. Meanwhile, silver (+7.15%) and gold prices (+1.88%) also rebounded, with gold closing at $5,058/oz. This morning Brent and Gold are back down just under half a percent with Silver down -2.5%.

Japanese equities continue their climb this morning with the Nikkei (+2.34%) and Topix (+1.89%) extending record levels in the wake of Prime Minister Sanae Takaichi’s landslide victory in the Lower House. JGBs are remarkably calm with 10 and 30yr yields -3 to -4bps lower. The Yen continues to edge higher (+0.3%) to 155.30 having been as low as 157.73 near the open yesterday as markets first reacted to the likely record election victory. So all calm for now. Elsewhere, the Hang Seng (+0.54%) and the KOSPI (+0.53%) are both higher with other markets flatish, including US and European futures. 

To the day ahead now, data includes US January NFIB small business optimism, Q4 employment cost index, December retail sales, import price index, export price index, November business inventories. We’ll also hear the Fed's Hammack and Logan speak. Earnings include Coca-Cola, AstraZeneca, and Barclays. Finally, the US will hold a 3yr Treasury auction

Tyler Durden Tue, 02/10/2026 - 08:36

My morning train WFH reads:

• The Dow, the Uncool Index, Has Its Moment in the Sun: The oldest, most unfashionable stock benchmark is suddenly outperforming. (Wall Street Journal)

• Crypto revolt exposes fragility of Trump’s coalition: Trillions of dollars in value have been vaporized from global crypto markets since October, plunging an ascendant industry championed by President Trump into a new bout of turmoil. Why it matters: Crypto joins a growing list of MAGA coalition partners — from Epstein-focused populists to farmers to Latino men — now questioning whether Trump’s return to power has delivered what they were promised.(Axios) see also A New Crypto Winter Is Here and Even the Biggest Bulls Aren’t Certain Why: Some of crypto’s biggest champions can’t put their finger on what went wrong. (Wall Street Journal)

• This job has become the ultimate case study for why AI won’t replace human workers: But the radiology field has become a case study for how AI could enhance, and not replace, jobs. The type of work in radiology is also ideal for AI assistance, said Dr. Po-Hao Chen, a doctor specializing in diagnostic radiology at the Cleveland Clinic. (CTV News)

• Carvana’s Red-Hot Growth Runs on a Cycle of Borrowed Money: Attacks from short sellers and the collapse of auto lender Tricolor haven’t slowed down America’s most valuable used-car retailer. (Businessweek)

• You better kiss those free snacks and cold brew goodbye, baby. Corporate perks (and loyalty) are gone, people are paying more on health insurance then rent, and someone is using “olive oil” as a resume builder. (Substack)

• Why there’s a “huge vibe divergence” between tech and finance on AI: Tech evangelists are hailing a Claude-fueled seismic shift in computer-based work. Investors are, by and large, selling AI stocks. (Sherwood News)

• How a $30 Billion Welfare Program Became a ‘Slush Fund’ for Both Red & Blue States: Republicans and Democrats alike decry the lack of oversight for America’s famous antipoverty experiment. TANF was supposed to help the poor. States found other uses for the money.  (Wall Street Journal)

• The 6 biggest questions about adult ADHD, answered by a neuroscientist: ADHD diagnosis has risen in recent years, particularly among adults. But we need to improve how we view and treat it. (BBC Science Focus Magazine) see also How ADHD Became an Adult Disorder: Millions of grown-ups are now being diagnosed with what was once thought to be a childhood condition: attention deficit hyperactivity disorder. What did health-care providers miss? And how do you know if you’re affected? (National Geographic)

• ‘The Trust Has Been Absolutely Destroyed’ Some state election officials say they no longer trust their federal partners. (The Atlantic)

• Bad Bunny’s unapologetically American Super Bowl show: All of the cultural Easter eggs you might have missed, explained. (Vox)

Be sure to check out our Masters in Business interview  this weekend with Bob Moser, CEO and founder of Prime Group Holdings, a private investor in unique real estate holdings. They created Prime Storage, one of the largest, privately-held self-storage brands in the world, with over 19 million rentable square feet of space and 255 locations across 28 states and the U.S. Virgin Islands. The firm has acquired over $10 billion in real estate assets.

 

Equal Weight S&P 500 has outperformed Cap Weight by 4.2% through 2/7. That’s the highest spread going back to 1992

Source: @mattcerminaro

 

Sign up for our reads-only mailing list here.

 

The post 10 Tuesday AM Reads appeared first on The Big Picture.

Algerian Boxer Admits To Having XY Chromosomes And Commits To Hormonal Treatments

Authored by Jonathan Turley,

With the start of the Winter Games, a story this week resurrected a controversy from the last Summer Olympics. Previously, Olympic officials and pundits denounced those who objected to Algerian boxer Imane Khelif competing as a woman, saying that she was born a female. Female boxers withdrew from the competition rather than fight Khelif. Now, the boxer has admitted to having XY chromosomes and is taking hormone treatments to lower testosterone levels for the next Olympics.

At the time, IOC chief Thomas Bach said: “We have two boxers… who were born as women, raised as women, who have passports as women, who have competed for many years as women. And this is a clear definition of a woman.”

In 2023, the International Boxing Association (IBA) President Umar Kremlev explained the IBA’s decision to disqualify Taiwan’s Lin Yu-ting and Algeria’s Imane Khelif from the 2023 Women’s World Boxing Championships. While there remains confusion on the testing used by the IBA (or the reliability of those tests), it issued this statement:

“Based on DNA tests, we identified a number of athletes who tried to trick their colleagues into posing as women. According to the results of the tests, it was proved that they have XY chromosomes. Such athletes were excluded from competition.”

Various media also did their own “fact checks” with outlets like USA Today stating that the “outcries from anti-trans celebrities and politicians” were based on false claims and the boxers were born women.

NBC also cited “attacks from anti-LGBTQ+ conservatives online who claim they’re transgender.”  It stressed that the IBA could not be trusted since the IOC banned the group. (IBA was banned for corruption and financial-related issues).

I wrote about the controversy, criticizing the lack of consistent testing and simple confirmation of the XY chromosomal allegation.

Khelif still insists on competing against female boxers and added:

“Doctors and teachers decide. We all have different genetics, all different hormone levels. I’m not a transsexual. My difference, it is natural. I’m like that. I did nothing to change the way nature did to me. That’s why I’m not afraid. For the next Games, if you have to take a test, I will submit to it. I have no problem with that. I already did this test. I contacted World Boxing, I sent them my medical record, my hormonal tests, everything. But I had no answer. I’m not hiding, I’m not refusing testing. What I don’t understand is why we want to make my story so bigger.”

Notably, Khelif previously filed a criminal complaint against JK Rowling and Elon Musk for cyberbullying.  It is another example of how free speech is being eviscerated in Europe through the criminalization of political speech. I cannot find a record of the complaint’s status.

Tyler Durden Mon, 02/09/2026 - 21:45

Rubio Slams 'Unjust' Jimmy Lai Sentence After Hong Kong Court Issues 20 Years

The high profile trial of Hong Kong's foremost pro-democracy media tycoon wrapped up in December, whereupon Jimmy Lai was found guilty of sedition. He had long spearheaded huge protests and local Hong Kong media criticism of Beijing, but came under legal hot water and scrutiny with the passage of the notorious China-imposed national security law.

Finally, on Monday he was handed a very harsh 20-year prison sentence, resulting in outrage and condemnations aimed at China from across the globe. This is effectively life in prison, or even a death sentence, for the 78-year old who also suffers various health problems.

via AP/Al Jazeera: Jimmy Lai walks through the Stanley Prison in Hong Kong on July 28, 2023

This is after he's already spent over five years in prison, and the trial alone lasted two years. He was first detained in August 2020 under Hong Kong’s Beijing-imposed national security law, in wake of large-scale student protests which at times brought whole sectors of the city to a standstill.

The city’s High Court said in its ruling: "Having stepped back and taking a global view of the total sentence for Lai’s serious and grave criminal conduct ... we are satisfied that the total sentence for Lai in the present case should be 20 years’ imprisonment."

The security law has been widely seen as the final nail in the coffin of Hong Kong's long-running autonomy, and was a response to the major 2019 protests which were widely covered in international press reports.

China had long alleged a foreign intelligence 'hidden hand' behind the protests. This was in part due to student activists being in semi-regular communication with Western officials and NGOs, and sometimes even honored at events hosted in Europe or the US.

Secretary of State Marco Rubio was swift to issue Washington's response to the verdict on Monday, calling the sentencing an unjust and tragic conclusion.

"The Hong Kong High Court’s decision to sentence Jimmy Lai to 20 years is an unjust and tragic conclusion to this case," Rubio said in the statement. 

"It shows the world that Beijing will go to extraordinary lengths to silence those who advocate fundamental freedoms in Hong Kong, casting aside the international commitments Beijing made in the 1984 Sino-British Joint Declaration," the US top diplomat added.

Elaine Pearson, Asia director at Human Rights Watch, stated that "A sentence of this magnitude is both cruel and profoundly unjust."

(1/5) Before sentencing was read, Jimmy Lai waved to the public gallery, made a heart gesture, and smiled while miming a bite of an apple.

After the decision was delivered, he again smiled broadly, waved, and made a fist-in-palm gesture toward the public seating. #AppleDaily pic.twitter.com/fnwEQefBaX

— Frances Hui 許穎婷 (@frances_hui) February 9, 2026

Western leaders, including of the US and Britain, are expected to lobby for his freedom, especially given that this is being viewed as ultimately a crackdown on Western values in influence on one of the world's main financial hubs. But given sentencing has been accomplished, any such action to obtain his release will get harder and harder. China, on the other hand, said he encouraged violence and foreign subversion.

Tyler Durden Mon, 02/09/2026 - 21:20