Precious metals up, markets on hold

Gold hit an all-time high on Tuesday, while the dollar held steady as stocks came under pressure. Investors held their breath ahead of Federal Reserve Chairman Jerome Powell's remarks on trade tariffs and inflation.

Oil on the rise, futures slipping

Oil prices surged higher, with Brent trading above $76 a barrel. European stocks were flat, holding their ground, while FTSE futures were unchanged. Meanwhile, US stock futures fell 0.2%, signaling market uncertainty.

Trump's new tariffs spark investor reaction

On the eve, US President Donald Trump tightened trade policy, raising tariffs on steel and aluminum imports to 25%. The move boosted US steel stocks, but also raised concerns about possible retaliatory measures from other countries.

Trump promised to announce new global tariffs in the coming days, further fueling jitters in the markets.

An exception for Australia?

However, the situation stabilised slightly on Tuesday after Trump announced a possible exemption for Australia from the new tariffs. According to him, this decision was discussed in a conversation with the Australian Prime Minister and could be a signal of flexibility in US policy.

"We have a positive trade balance with Australia because they buy a lot of planes from us. They need them, because they are quite far away," the US President noted, adding that the final decision on retaliatory measures for other countries will be made within two days.

Markets continue to closely monitor Washington's actions. Investors are assessing the prospects for further inflation growth, a stronger dollar and possible changes in global trade. Volatility may remain high in the coming days, as markets await more statements from the Fed and further steps by Trump.

China strikes back: new tariffs take effect

On Monday, China imposed retaliatory tariffs on American energy products and a range of goods, raising tensions in trade relations between the world's two largest economies. However, the Hong Kong stock market (Hang Seng) demonstrated resilience, with the index reaching a four-month high the day before.

Despite the introduction of new tariffs, investors remained optimistic, counting on a possible trade deal between Washington and Beijing. However, the Hang Seng ended the day down 0.4%, although it has gained more than 12% in the past month, mainly due to the excitement around artificial intelligence and semiconductor companies.

China markets under pressure, but automakers are pushing higher

Mainland Chinese stocks were slightly lower, reflecting traders' concerns about new economic measures.

One of the biggest gains of the day was in electric vehicle (EV) stocks. Shares of Chinese auto giant BYD soared to a record high in Hong Kong after the company announced that it would offer free intelligent driving systems on all its models, including the budget Seagull hatchback, which costs just $9,555. The move was a strong marketing move that could strengthen BYD's position in the global EV market.

However, other EV makers' shares were sharply lower, reflecting the volatility of the sector and changing investor sentiment.

Gold heads for $3,000: a flight to safety

Amid global economic uncertainty, gold prices have surged, approaching the landmark $3,000 per ounce mark. The metal hit $2,942 in Asia, indicating growing demand for safe havens.

The rise in interest in gold is driven by a number of factors, including uncertainty surrounding US trade measures and central banks seeking to diversify their reserves away from the dollar.

"Gold's rise is driven by a combination of central bank buying, investors seeking safety, and strong market momentum that is attracting new entrants," said Shane Oliver, head of investment strategy at AMP in Sydney.

Gold exports from London: what's going on?

One of the unexpected consequences of the US tariff policy was an increase in gold exports from London vaults across the Atlantic. Experts attribute this to investors' attempts to minimize the risks associated with potential new tariffs on gold in the US.

In the context of trade instability, demand for precious metals is likely to remain high, and their quotes will continue to rise. Investors and analysts are eagerly awaiting new signals from the Fed and the US administration to understand the further prospects for global markets.

The yuan weakens, and the dollar holds its positions: currency markets react to trade risks

On Tuesday, the Chinese yuan continued to decline, breaking the key mark of 7.3 per dollar and falling to 7.3042. This trend reflects ongoing investor concerns about the impact of US tariff policy and weakening demand in the Chinese economy.

The Australian dollar remained stable at $0.6278, despite market fluctuations.

The U.S. dollar also held its ground against the Japanese yen, settling at $152.01, while it was trading at $1.03 against the euro.

Tariffs hit Canada and Mexico

The new U.S. tariffs have had an impact on North American currencies. The Canadian dollar and Mexican peso weakened as those countries were hit by higher metal tariffs announced by the U.S. president. Investors are worried that the trade restrictions could slow economic growth and lead to further weakness in their currencies.

Powell's speech: Markets await cues from the Fed

Fed Chairman Jerome Powell is scheduled to testify to the Senate Banking, Housing and Urban Affairs Committee later Tuesday to deliver his semiannual monetary policy report.

Financial markets will be watching his comments closely, particularly on the impact of the new tariffs on inflation and the outlook for interest rates. Any signals of a possible change in the monetary policy could trigger sharp moves in bond and currency markets.

US Treasuries: Yields are stable, but investors are wary

The yield on the 10-year US Treasury note settled at 4.495%, but there was no trading in Asia due to a public holiday in Japan.

Investors are still hesitant to respond to Trump's questions about US debt, but the situation remains tense.

Markets await clarification on US government debt

In recent days, there have been reports that Trump may reconsider his approach to US government debt. However, it is not yet clear whether this means a recalculation of Treasuries or some new regulatory format.

"Markets will probably want to see more detail on what exactly this means," said Mark Elworthy, head of fixed income, currencies and commodities trading at Bank of America in Australia.

He said key questions remain open and more clarification could be forthcoming in the coming days. If concrete proposals are forthcoming, it could impact bond markets and the dollar.

Market Focus: Powell's Speech and Inflation Outlook

Investors turned their attention Tuesday to Fed Chairman Jerome Powell's upcoming testimony before Congress. He will answer questions from lawmakers over the next two days, and his views on inflation dynamics and the impact of new tariffs are likely to be a major topic of discussion.

Markets will be watching his speech especially closely on Wednesday, when the latest consumer price data for January is released. This data could provide additional insight into the direction of monetary policy.

Fed Rates: Markets Price in Smaller Cuts

Amid economic uncertainty, expectations for the size of interest rate cuts in 2024 have adjusted significantly. Markets are now pricing in a cut of just 38 basis points, significantly smaller than previously forecast. Any hints from Powell about a change in monetary policy could trigger sharp moves in bond and currency markets as investors weigh the prospects for easing or tightening financial conditions.

Electric Cars: New Players Change the Game

The electric vehicle sector was shaken up on Tuesday by a dramatic shift in strategy among Chinese automakers.

Market leader BYD (002594.SZ) made a breakthrough move by introducing autonomous driving technology to its entry-level models, including the Seagull hatchback, which starts at just $9,555. That's significantly cheaper than similar offerings from Tesla (TSLA.O) and other rivals, adding to the pressure on the global EV market.

Another Chinese brand, Leapmotor (9863.HK), a partner of Stellantis (STLAM.MI), has also stepped up its game by introducing a new electric car with intelligent driving technology priced under 150,000 yuan ($20,535), making the cutting-edge technology more accessible to a wider range of buyers.

Stock Market: Tesla Loses Ground, BYD Sets Records

Amid an aggressive offensive by Chinese manufacturers, Tesla shares fell 3% overnight, hitting a two-month low. Other Chinese brands also suffered losses - Xpeng and Geely Auto (0175.HK) shares fell sharply on the Hong Kong Stock Exchange.

At the same time, BYD is confidently strengthening its leadership position. In Hong Kong, its shares rose by more than 4%, updating their historical maximum. This underscores the growing interest of investors in the company, which is not only catching up, but also starting to overtake its competitors in the technology race.

The market awaits key decisions

Investors continue to monitor the dynamics of inflation, the monetary policy of the Federal Reserve, and the development of the situation in the electric vehicle market. New data and statements by Powell in the coming days can significantly affect the mood of market participants and set the vector for the further movement of global assets.