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The BoJ concluded its two-day monetary policy meeting today, deciding to keep the short-term policy rate unchanged at 0.75%  (as widely expected), while raising growth and inflation forecasts in a somewhat hawkish tone. Governor Kazuo Ueda held a press conference afterward, where he reiterated monitoring of markets and mentioned the possibility of conducting bond operations flexibly under extraordinary circumstances to promote stable yield formation, but he did not announce o

While we continue to watch our leaders debate in Davos, the global financial system is moving rapidly, particularly the debt. The long end of the Japanese curve has been in a price discovery mission that has pushed yields up rapidly, to the point where the government has either intervened or threatened to intervene. For the 30 year JGB, yields touched 3.85% and then were pushed down to the current 3.67%. The move does not look like much, but these bonds have a duration of 20

Politicians and global business leaders continue to debate and brainstorm about the world’s destiny in Davos at WEF. Among other big topics, the change of world order, the impact of America first policies, including the potential impact of a conflict on Greenland and AI have filled headlines. It’s also been a year since President Trump took power for his second mandate. Since then, the S&P500 has risen 12.36%, currently at an all time highs. That implies a $7.7tn increase in

Japanese Government Bonds (JGBs) are becoming a real headache for everyone. In the chart below, you can see the yield of the 30 year bond reaching 3.863%. The 40 year bond yield just touched 4%. But the concern is not the level, it’s the speed at which it is increasing. 6 months ago, it was 100 bps below today. Reportedly, Japanese insurers are selling these bonds unable to cope with the loses. The yen is trading too close to 160 vs the dollar, which will likely trigger an in

The Greenland episode continues to unfold with economic consequences for Europe. The tariffs announced by Trump can cost the EU around 1.5% of GDP, which is a lot considering the Euro area is barely growing. You can see it on the chart below. European stock indices are down around 1%, gold is up 1.6% and the dollar is slightly weaker. At this point it’s important to remember that Europe holds $3.6Tn is US government bonds. They don’t have many options, but they can divest or

NATO  (North Atlantic Treaty Organization) was created primarily as a collective defense alliance to counter the growing threat of Soviet expansionism in Europe after World War II. The alliance was officially established on April 4, 1949, with the signing of the North Atlantic Treaty by 12 founding members: the United States, Canada, Belgium, Denmark, France, Iceland, Italy, Luxembourg, the Netherlands, Norway, Portugal, and the United Kingdom. the Alliance was created to ser

The latest Treasury International Capital (TIC) report was published yesterday with data as of November 2025. This monthly report tracks cross-border flows in securities, banking, and other financial assets, including foreign acquisitions of U.S. long-term securities (such as Treasuries, agency debt, corporate bonds, and equities). Foreign residents recorded a substantial net inflow of $212.0 billion in total acquisitions of long-term U.S. securities, short-term U.S. securiti

One would imagine that as a consequence of all the geopolitical events occurring these days, markets should be concern, volatile and to a certain extent scared. But as we await what could be the largest real estate transaction in recent history, markets continue to be at or near all thin highs. In the case of the credit markets, as you can see in the chart below, credit spreads are at the lowest point they have been since 2007, prior to th GFC. Credit spreads measure how risk

China has just published its trade numbers for 2025. China has a trade surplus of $1.2Tn. This is incredible of we consider Trump tariffs and all the noise regarding free trade we heard since April 2025. The details: (1) exports to the U.S. down 20%. (2) exports to the EU up 8.4%, and (3) to south east Asia up 13.4%. And here’s the catch: If you look at the charts below, China has been exporting to the U.S. through Vietnam in what it’s been known as Transhipping. From the ne

It’s no secret that liquidity is the oil that keeps the market engine running smoothly. Corporate earnings should be (and in fact they are) the main driver of stock returns, but there are times where the amount of money available in the market is so vast, that the amount of goods and services is not enough to reach a balance, and the only adjustment mechanism is price. We’re looking at a liquidity driven market, where a combination of money creation (monetary stimuli by centr

The Donroe doctrine is going full steam: (1) President Trump just announced a 25% tariff imposed on any country that trades goods and services with Iran. Immediately after, China complained about the tariff arguing that you cannot imposed unilateral sanctions like that. I guess the negotiations with China have reached a dead end. (2) Perhaps it’s a head fake move, but Rep. Randy Fine (R-FL) introduced the "Greenland Annexation and Statehood Act" yesterday, authorizing Preside

President Donald Trump has escalated his longstanding criticism of Federal Reserve Chair Jerome Powell and the Fed through the Department of Justice (DOJ), primarily by initiating a criminal investigation into Powell’s congressional testimony. This action is widely viewed across sources as an attempt to exert political pressure on the central bank to lower interest rates, amid Trump’s repeated public threats to fire Powell or sue him for “gross incompetence.” The investigatio

The U.S. trade deficit was narrowed as published yesterday with October figures, due to government shutdown. This is therefore a backward looking figure. But it’s still relevant to see trends. The question is, do we have a trend down for this deficit? Look a the charts below: the September figures was $48.1Bn, and the newly released October one was $29.4Bn, a reduction of $18.8Bn. This is good, and should give credit to this administration. But the details are important. The

President Trump is already campaigning hard for the midterms. So far he has announced: (1) $2000 checks to americans coming from tariffs, (2) Fed fund rates will be lower, putting great pressure on the Fed, (3) lower gasoline prices as a consequence of Venezuela’s intervention, (4) lower mortgage rates thanks to $200bn mortgage bonds purchases by the GSEs, (5) which he intends to relist in the market promptly, bringing more money to the U.S. taxpayer (or so he says), (6) he h

It is remarkable to witness the may ways this administration is intervening the market with similar effects than QE (quantitative easing) without being QE. First, the Fed started late last year a program to buy $50Bn a month in Treasury Bills (less than 1 year), and because the securities have no duration, it’s not considered QE (??). This operation does have an impact on M2 (the monetary base), since in the absence of these purchases, the Fed balance sheet would be reduced.

It’s becoming a full time job to follow up on all the events that are going on in the world the first week of the year. The pace is frenetic. On the domestic front, the job market is deteriorating, with less job openings than unemployed people for the first time in almost 4 years. This helps the president lower rates, but it may become dangerous if it continues to worsen. And since it seems no more government jobs will be added, and corporate america is embracing AI, we’re go

The Trump administration has started the year in some sort of a geopolitical rush. The president may not want to risk his agenda to a potential loss of control of the House and the Senate in th mid term elections. First, Venezuela, then Iran, where military assets are reportedly being deployed in the Middle East, to befriend and support the regime change in old Persia. The next one in line is Greenland. Greenland’s position bridges North America, Europe, and the Arctic, makin

Eurasia Group’s Top Risks for 2026   report, has been published today. It highlights a volatile global environment, with the United States emerging as the primary source of risk due to domestic political shifts under President Trump. the Top 10 Risks are: 1.  US political revolution : Trump’s attempts to consolidate power make the US the biggest global risk driver. 2.  Spheres of influence : Growing division of the world into competing blocs led by major powers. 3.  Sell Amer

The new year has started the same way the old one finished, with an increase in national debt. During 2025, U.S. debt increased by $2.3Tn, and at current pace, even with tariff revenue, we will reach $40Tn by August, maybe sooner, if we continue to have intensive military campaigns around the globe. What’s interesting is that the long end of the Treasury curve is not moving that much. Perhaps because there is very low supply from the U.S. treasury that prefers to maintain the

It’s difficult to talk about anything else than Venezuela today. The dust has not settle yet, and the official explanations, what was said (and what wasn’t), clarifies a little bit more the real intent of the operation. Was it about drugs? Sure. Was it about oil? Absolutely. Was it about the Monroe Doctrine? Unequivocally. Was it about something else? Likely. 80% of oil exports from Venezuela go to China. And it’s transacted in Yuan. In other words, away from the U.S. dollar