ForexLive Asia-Pacific FX news wrap: A bad news / good news day

• New Zealand will loosen visa rules to allow holiday makers to work remotely while visiting
• European Central Bank President Lagarde is speaking on Monday
• DeepSeek AI – ‘amazing and impressive’ despite working with less-advanced chips
• White House says Colombia has agreed to accept illegal migrants returned from the US
• Recap – China’s Manufacturing Sector Contracts in January, Economic Outlook Uncertain
• China invites local and international media to cover its annual parliament
• Trump aides want to hit Canada, Mexico with tariffs as soon as February 1 – before talks
• NVDA stock, NQ futures have both slipped on a steaming pile of DeepSeek
• China December 2024 Industrial Profits +11% y/y
• China official PMI data for January 2025: Manufacturing 49.1 (expected 50.1)
• China’s CSRC approves $7.25B stock investment pilot programs for insurers & asset managers
• PBOC sets USD/ CNY reference rate for today at 7.1698 (vs. estimate at 7.2295)
• MUFG warned about Trump imposing tariffs on Friday – “dollar higher for longer.”
• RBC sees next Bank of Japan rate hike in July 2025
• A majority of UK businesses plan to cut pay increases
• Macau mutual fund will soon be offered to mainland China investors
• Trump is making an example of Colombia – unnamed White House source
• USD up, equity indexes down as Trump kicks off trade war with tariffs
• Economic calendar in Asia – Monday, January 27, 2025 – China PMIs for January
• Colombian president orders increase of import tariffs on US goods
• On Sunday China announced new measures to boost equity index investment products
• Trade ideas thread – Monday, 27 January, insightful charts, technical analysis, ideas
• AUD traders heads up – it’s a market holiday in Australia today
• UK’s fin min Reeves to release corporate pension funds to help investment fuel growth
• Trump slams Colombia with tariffs after it turns back migrant deportation planes
• Monday morning open levels – indicative forex prices – 27 January 2025
• Newsquawk Week Ahead: FOMC, ECB, BoC, US PCE, EZ GDP, Tokyo and Australian CPI
• Tesla Stock Price Prediction 🐻
• Will Chinese DeepSeek Disrupt NVIDIA?
• Weekly Market Outlook (27-31 January)
• What are the technicals driving the major US currency pairs heading into the new week
• Trump Pump & Dump
• Did the US Secretary of State just cutoff aid to Ukraine?
• Forexlive Americas FX news wrap 24 Jan: The USD moves lower after weaker data.

The
bad news twins for non-USD FX and US equities over the weekend were

• Trump
  slamming Colombia with tariffs, and Colombia responding tit-for-tat
• NVDA
  (and NASDAQ) was slammed by Chinese AI developments in Deep Seek

Trump
sent a military plane of shackled deportees to Colombia. Colombia
turned the plane back to the US, arguing that migrants should be
treated with dignity and respect. The President of Colombia offered
to accept deported Colombians on civilian flights. Trump responded
by slamming tariffs and other sanctions on Colombia. Colombia then
responded in kind, with equivalent sanctions on US products.

The
USD opened higher in early trade in Asia and has continued to ratchet
up.

Globex
opened US equity indexes lower. In addition to the nascent trade war
NASDAQ (NQ futures) was hit by Chinese AI DeepSeek developments that
will likely weigh on the NVDA share price

• the
  project took only $6 million to train
• its
  open source
• it
  performs on par with leading AI models
• seems
  to have navigated U.S. semiconductor restrictions on China
• uses
  fewer chips, and not necessarily Nvidia’s

Of
course all of this is good news if you were positioned on the correct
side.

There was also news from an unnamed source saying Trump’s advisers want tariffs on Canada and Mexico as soon as Saturday, February 1, before talks begin.

Later
in the session we had the news that the
US will not levy threatened tariffs on Colombia after the South
American nation agreed to take
illegal migrants back. The USD retraced some of its gains on this
reversal of the news. Trade war over, for now.

In
the midst of all this we had poor data from China. Official PMIs from
the country’s National Bureau of Statistics (NBS) showed
manufacturing falling back into contraction, dropping to 49.1 from
50.1 in December. The non-manufacturing sector also showed signs of
slowing, with its PMI falling to 50.2 from 52.2 in December,
reflecting weaker momentum in services and construction.

This article was written by Eamonn Sheridan at www.forexlive.com.