ASIA/PACIFIC
Asian stocks showed mixed performance on Monday amid thin holiday trading volumes, as investors reacted to weak Chinese data and eagerly awaited interest-rate decisions from the U.S. Federal Reserve and the European Central Banks this week for guidance on rate paths in 2025. China’s official purchasing managers’ index (PMI) for January dropped to 49.1. This signals a contraction and misses the forecast of 50.1. Investors also weighed the implications of Chinese startup DeepSeek’s launch of a free, open-source artificial intelligence model to Western rival OpenAI’s ChatGPT. Australian, Taiwanese and South Korean markets were closed for public holidays. Mainland Chinese bourses will be closed from tomorrow through Tuesday of next week.
EUROPE
European markets closed in negative territory with investors in the region gearing up for a busy period of earning reports and the eurozone’s ECB latest interest rate decision. Shares of European chipmakers ASML and ASM International dropped 7% and 12%, respectively, reacting to the disruptive impact of the rise of DeepSeek, following the introduction of its cost-effective AI model. This development raised concerns about the valuations of existing AI companies. Shares of companies with ties to the AI supply chain also nosedived. Germany, Europe’s largest economy, and Spain will publish inflation data later in the week, further shaping market sentiment. Concerns about U.S. President Donald Trump’s tariff threats and policies, and anxiety ahead of interest rate decisions from the Federal Reserve and the European Central Bank also contributed to the weakness in the markets.
AMERICAS
U.S. stocks closed mostly lower on earnings concerns following DeepSeek’s emergence as a powerful AI model. The Chinese startup last month unveiled a free open-source large language model that it says took less than $6 million to build. The development spurred worries around Silicon Valley’s hefty AI capex spending and the sustainability of the U.S. technical edge in artificial intelligence. DeepSeek surpassed rival OpenAI on Monday to become the most-downloaded free app in the U.S. on Apple’s App Store. AI-related names took a hit. Nvidia shares fell 17%. Concerns about the outlook for interest rates also weighed on Wall Street ahead of the Federal Reserve’s monetary policy meeting. Big tech reports will be in focus this week as Meta Platforms, Microsoft and Tesla each report on Wednesday, and Apple will release results on Thursday. Meanwhile, the United States and Colombia have reached an agreement wherein Colombia will accept deported migrants. Colombia’s peso hadn’t traded in Asian time but Mexico’s currency slid as much as 1.2%
AFRICA
Egypt has secured a $2 billion syndicated facility as the country seeks to diversify sources of funding through access to international and regional syndicated loan market. The deal, closed by Emirates NBD and Standard Chartered, drew an “overwhelming” response from the market and was more than 2.5 times oversubscribed, according to a statement on Friday. Nigeria may not see significant foreign funds inflow this year because of its negative real interest rates resulting from inflation surpassing interest rates, according to the latest economy report by PwC.
MIDDLE EAST
Most major stock markets in the Gulf closed lower, although the Qatari index bucked the trend, as oil prices – a catalyst for the region’s financial markets -slipped. Uncertainty surrounding U.S. trade policy also weighed. Middle Eastern equity capital markets have been quick to reopen ahead of what is expected to be another busy year across the region, bankers told IFR. Saudi Arabia is expected to contribute the largest deal count. The Saudi Capital Market Authority (CMA) announced today that foreigners can invest in Saudi-listed companies that own real estate in Makkah and Madinah. This move is expected to attract more foreign investments into the region’s property market. On the bond front, Bahrain is expected to issue $2-3 billion of international bonds including sukuk in 2025, Zawya reported.
. COMMODITIES
GOLD
Spot gold dropped 0.6% to $2,755.79 per ounce, as of 0304 GMT, while U.S. gold futures
fell 0.6% to $2,761.20, according to Reuters, amid Fed rate cut speculation and trade tensions.
SILVER
Silver trades at $30.24, weighed down by a stronger dollar and uncertainty around future monetary policy decisions, according to FX Empire.
OIL
Brent crude futures dropped 87 cents, or 1.11%, to $77.63 a barrel by 0043 GMT while U.S. West Texas Intermediate crude was at $73.77 a barrel, down 89 cents, or 1.19%, as U.S. President Trump reiterated calls for OPEC to cut prices.