Iran’s Islamic Revolutionary Guard Corps (IRGC) Navy says it has seized two vessels near Farsi Island allegedly carrying large quantities of smuggled fuel, the country’s Students’ News Agency (ISNA) reported Thursday – at a moment the nation’s military has its “finger on the trigger” amid threats from the Trump White House and Israel.

More than one million liters of diesel were discovered aboard the ships, according to the IRGC Navy’s public relations office, and the seized 15 foreign crew members have been handed over to judicial authorities.

ISNA reported that the vessels were part of a fuel-smuggling network that had been operating for months and were intercepted following “monitoring, intelligence work, and IRGC naval operations.”

While the interdiction against the alleged fuel smuggling vessels is significant, Thursday’s incident is somewhat more common and less alarming that if it had been a international oil tanker in the Strait of Hormuz, for example.

Still, Tehran is using it to send a warning to any external power acting menacingly in its regional waters. Ezzatollah Zarghami, a former minister and ex-head of Iran’s state broadcaster IRIB, later on Thursday issued a blunt warning, declaring that “the Strait of Hormuz will be the place of massacre and hell.”

“I am sure that the Strait of Hormuz will be the place of massacre and hell for the US,” Zarghami said. “Iran will show that the Strait of Hormuz has historically belonged to Iran. The only thing the Americans can think of is playing with their vessels and moving them from one place to another.”

With seizures at sea now paired with explicit threats, tensions around one of the world’s most critical energy chokepoints – which the IRGC has frequently threatened it could block off altogether – continue to climb.

This especially as Tehran is warning that it is ready to strike back hard if attacked by the United States, even if this means all-out war. It says its military forces and ballistic missiles are on high alert, and also that Tel Aviv will be again targeted in the event of US aggression.

Israel meanwhile is said to be lobbying Washington for regime change in Tehran, but the White House reportedly isn’t ready for such a drastic option – also amid reports the Pentagon would need more time to put assets in place.

There is an IRGC Navy base on the tiny, strategically located island, which has been used to launch IRGC speedboats to at times intercept foreign vessels.

In a Wednesday interview President Trump said Iran’s supreme leader Ayatollah Ali Khamenei should be “very worried” at the growing Pentagon presence in the region.

“I would say he should be very worried, yeah. He should be,” Trump said in reaction to an Iran question by Tom Llamas on NBC Nightly News. 

Via Greg Hunter’s USAWatchdog.com,

Legendary financial and geopolitical cycle analyst Martin Armstrong warned in late December to be ready for the “Perfect Storm for Debt, Economy, War, Gold & Silver.” 

The rain and thunder started at the beginning of February, and the storm is just beginning.  Armstrong says, “This is where the volatility starts kicking in…”

”  I think Europe is so desperate for war.  My concern with the Trump Administration is I would not step a foot in there. 

Europe needs war.  You already had the finance ministers of France and Germany say that they may need IMF bailouts.  This is why they want war. 

It’s a distraction.  Without war, people are going to figure out what the hell is going on. 

My pension fund is gone.  Everything is defaulting.  What’s going to happen?  They are basically going to be storming the parliament with pitch forks.”

Where are you going to see volatility?  Armstrong says, “The volatility is in everything…”

“  You just saw the metals come down.  

They will probably consolidate before they go back up when people realize that Europe is going to go to war. 

What will happen?  The dollar will go up.  Metals will go up.  It will be like WWI and WWII. 

The US became the financial capital of the world because Europe blew its brains out twice. 

Now, they think the third time is going to be the charm…

If there is war in Europe, it will be maybe in the summer.  It does not look good.”

One bright spot was the Ukraine/Russia peace plan Armstrong put together at the request of President Trump.  Armstrong says, “I did get a letter from President Trump . . . thanking me for writing it.  So, it was sanctioned by Trump, and that’s pretty much everything he is doing except for NATO…”

“At the meeting, they told me you are correct.  We know we are not going to be at war with Russia.” 

Let’s hope the US stays out of a coming Russia/Europe war.  If we do, you can thank Martin Armstrong who put his peace plan together for Trump for free.

Armstrong also says the illegal alien invasion created by Democrats is the way they are trying to stay in power. 

Don’t be fooled by the close Dem wins in recent special elections. 

Armstrong’s “Socrates” computer has seen no advantage for either side for the midterms this year–yet. 

Armstrong sees the dollar staying strong and says:

“You can’t park money in Canada, Mexico, Japan, or Europe…

Where are you going to put serious money? 

The United States is the only place—sorry.  This is why the United States is what it is.  Big money needs a place to park.”

On gold and silver, Armstrong is decidedly bullish on both metals and says, “This is not the major high…”

”  We have too much craziness on the horizon, from sovereign debt default to war.  You are just getting a pullback and consolidation…

I am looking at the $165 to $200 per ounce area for silver.  For gold, I am looking at resistance at the $8,500 per ounce level and, after that, $10,000 per ounce . . . in the next few years.”

There is more in the 63-minute interview.”

Join Greg Hunter of USAWatchdog as he goes One-on-One with Martin Armstrong to talk about the volatility that started this month, with a lot more to come in 2026 for 2.3.26.

Initial jobless claims rose more than expected last week to 231k (212k exp) from 209k prior. While a significant rise, it remains – for now – within the low range of the last four years…

Source: Bloomberg

Continuing claims also rose modestly, but less than expected. 1.844mm Americans are currently filing for jobless benefits (below the 1.85 million expected, but up from the 1.819 million the prior week).

Notably this is still well below the 1.9 million Maginot Line that has become a switching level for fear of weakening labor market.

The ‘Deep TriState’ (government) was responsible for a large chunk of the rise in continuing claims…

However, earlier in the day, global outplacement and executive coaching firm Challenger, Gray & Christmas reported that U.S.-based employers announced 108,435 job cuts in January, an increase of 118% from the 49,795 cuts announced in the same month last year.

It is up 205% from the 35,553 job cuts announced in December.

“Generally, we see a high number of job cuts in the first quarter, but this is a high total for January. It means most of these plans were set at the end of 2025, signaling employers are less-than-optimistic about the outlook for 2026,” said Andy Challenger, workplace expert and chief revenue officer for Challenger, Gray & Christmas.

January’s total is the highest for the month since 2009, when 241,749 job cuts were announced. It is the highest monthly total since October 2025, when 153,074 cuts were recorded.

In January, Contract Loss led all reasons for job cuts, with 30,784 announced during the month.

Market and Economic Conditions followed with 28,392 cuts.

Restructuring was cited for 20,044 job cuts, while store, unit, or department Closings accounted for 12,738 planned layoffs.

Artificial Intelligence (AI) was cited for 7,624 job cuts in January, 7% of total cuts for the month. Companies referenced AI for 54,836 announced layoff plans in 2025.

Since 2023, when this reason was first tracked, AI has been cited in 79,449 job cut announcements, 3% of all layoff plans announced in that period.

“It’s difficult to say how big an impact AI is having on layoffs specifically. We know leaders are talking about AI, many companies want to implement it in operations, and the market appears to be rewarding companies that mention it,” said Challenger.

Finally, and perhaps putting the nail in the coffin, Challenger reports that last month, employers announced 5,306 hiring plans, the lowest total for the month since Challenger began tracking hiring plans in 2009.

Are we transitioning from ‘no hire, no fire’ to ‘no hire, some fire’ labor market?

In a surprise to traders, The Bank of England came within a vote of cutting interest rates and predicted inflation will fall below its target, a closer-than-expected decision that revived hopes of a move next month.

As Bloomberg reports, Governor Bailey was once again the swing voter in a 5-4 decision to leave rates unchanged at 3.75%, choosing to hold policy having cut at the last meeting in December.

Bailey said in a statement that “there should be scope for some further reduction in bank rate this year.”

In the accompanying monetary policy report, we also got a bit more insight into how the Bank of England sees the measures announced at November’s budget impacting the economy.

The BOE delivered its verdict on Labour’s budget and growth: good in the short-run, bad in the long-run. 

Measures announced in November will boost real GDP in the next three years. Beyond that, tax rises will take centre stage and weigh on the economy.

When asked if there is any scenario in which the BOE would need to hike rates, Bailey said that this was not under discussion at their meeting.

This surprisingly dovish hold pushed cable lower…

And gilt yields lower from overnight highs…

The commentary and closely split decision also pushed rate-cut odds higher for later in 2026.

Bailey says the rate-cut curve is in a “reasonable place” in a question about where the neutral rate lies, which the BOE made clear in its statement is highly uncertain.

Following the BoE’s ‘Dovish hold’, the ECB kept rates unchanged – as fully expected and reiterated its previous comments that it will follow a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance.

In particular, the Governing Council’s interest rate decisions will be based on its assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission.

ECB reiterates the Governing Council is not pre-committing to a particular rate path.

On growth, the ECB says the economy “remains resilient in a challenging global environment” and lists a number of factors underpinning growth:

• low unemployment

• solid private sector balance sheets

• the gradual rollout of public spending on defense and infrastructure

• the supportive effects of the past interest rate cuts

But it also repeats that “the outlook is still uncertain, owing particularly to ongoing global trade policy uncertainty and geopolitical tensions.”

EURUSD shrugged at the nothingburger from Lagarde…

In conclusion, while both central banks held rates unchanged (as expected), The ECB’s commentary was far more tame than the dovish BoE leaving traders with little incentive to push front-end Bunds around.

Stock futures slide, hitting session lows just after 7am ET, after a two-day drop that saw an ETF tracking software stocks sink to its lowest since April. As of 8:00am ET, S&P 500 futures have slumped to session lows, down 0.7% following a sharp slide just after 7am ET; Nasdaq 100 futures are also sharply lower, dropping 0.8% after the index wiped out its gains for the year over the prior two sessions. Alphabet is lower in after it said capex will reach as much as $185 billion this year, double what it was in 2025 and far more than the $120 billion analysts had predicted. Pre-market, Mag7 are all lower but GOOG’s capex guidance is boosting some semis who will benefit from the extra spending. This morning, the tech selloff was joined by a resumption in the precious metal liquidation as silver plunged -15% during China hours, and gold slid 3% following yesterday’s Momentum unwind (which continues today). The USD reversed all gains and traded near session lows as 10Y yields also dropped to session lows just over 4.25%. Today’s macro focus is on the jobs including claims and Challenger job cuts. We get Amazon earnings after the close. 

In premarket trading, Mag 7 stocks are all lower: Alphabet (GOOGL) falls 4% after the Google parent forecast full year 2026 capital expenditures of up to $185 billion, far exceeding consensus estimates. Analysts said the jump in spending may concern some investors, while others said it underscored the company’s confidence with AI (Nvidia drops 0.1% alongside AI infrastructure peers; Tesla -1%, Amazon -1%, Meta -1%, Apple -0.2%, Microsoft -1.8%)

• Align Technology (ALGN) climbs 11% after the medical devices firm reported adjusted earnings per share for the fourth quarter that surpassed Wall Street’s estimates.
• ARM Holdings (ARM) falls 7% after the company’s sales forecast disappointed investors, who are concerned about a slowdown in the smartphone market.
• Carrier Global (CARR) falls 6% after the HVAC company forecast full-year sales below what analysts expected. The company said it expects market conditions from the second half of 2025 to continue this year in its Americas residential business, which has struggled with weak demand.
• Elf Beauty (ELF) jumps 4% after the cosmetics company boosted its adjusted Ebitda guidance for the full year, beating the average analyst estimate. Analysts highlight strong performance in its newly-acquired Rhode, Hailey Bieber’s beauty and skincare brand.
• Estée Lauder Cos. (EL) tumbles 12% after its outlook boost failed to reassure some investors about the pace of the cosmetics conglomerate’s turnaround.
• Fluence Energy (FLNC) drops 17% after the energy storage technology company’s fiscal first quarter revenue fell shy of analyst estimates.
• Hershey Co. (HSY) rises 3% after offering a better-than-expected 2026 outlook as higher prices and new products bolster the candymaker’s performance.
• KKR & Co. (KKR) slips 2% after agreeing to acquire sports and secondaries investor Arctos Partners in a $1.4 billion deal, in a major push into a booming industry.
• Qualcomm (QCOM) falls 11% after the chipmaker’s revenue forecast was weaker than expected. The company said its “near-term handsets outlook is impacted by industry-wide memory supply constraints.”
• Symbotic (SYM) is up 5% after the technology firm forecast total revenue for the second quarter that topped the average analyst estimate.

In other company news, HSBC is said to be preparing to hand some bankers little or zero bonuses in a move to get some underperforming staff to depart. Shell profits slumped in the fourth quarter, hit by lower crude prices and a weak oil-trading performance.

Traders are weighing whether the flight from tech has been excessive, driven by concerns over disruption from artificial intelligence, lofty valuations and vast capital outlays. Sectors that stand to gain from faster economic growth have been the main beneficiaries of the shift. As for the biggest losers, the answer is easy: software, which the market has convinced itself will not exist thanks to AI agents. 

“Three quarters of software stocks are in oversold territory, and the momentum trade that has been the way to play tech and software last year is under severe pressure,” said Andrea Gabellone, head of global equities at KBC Securities. “I expect reason to come back to the table and a rebound shortly,

AI remains top of mind, with one Wedbush trader saying that “Alphabet’s mic drop capex highlights haves versus have nots in AI capabilities, commitment and balance sheet.” There are only a few companies that have the ability to spend more on AI and see ROI across their entire ecosystem, said Joel Kulina, managing director for TMT trading at Wedbush Securities. Alphabet, Meta and Anthropic are on his list.

The impacts of AI are rippling elsewhere. Shares of Qualcomm and Arm are sharply lower on concerns that a shortage of memory chips will limit phone production. Traders are looking for the floor for AI losers, with Jefferies’ trading desk predicting the group is due for a “vicious rally” but Morgan Stanley’s Quants warning that the selling is just starting.

Futures for the Russell 2000 small cap index continued to outperform those for the S&P 500. In another sign that appetite for diversification remained strong, the rolling four-week average inflows into consumer staple stocks have reached a record, according to Bank of America analysts. These inflows hit the highest level on an absolute basis and by percentage of market capitalization since the bank started tracking client fund flow data in 2008, Jill Carey Hall, an equity and quant strategist, said in a Wednesday note. 

“We don’t see it as a big plummet in tech stocks, we see it more as the rest catching up in terms of earnings,” Shanti Kelemen, co-chief investment officer at 7IM, told Bloomberg TV.

Overall positioning in equities remains elevated, despite a broad unwind in crowded trades, leaving stocks vulnerable to downside moves in the near term, according to JPMorgan’s cross-asset indicator. Positioning changes across many assets were largely modest this past week with the exception of a severe reduction in long positions in silver. And speaking of silver, a sudden 17% plunge wiped out a two day recovery, as the commodity struggled to find a floor following a historic rout. Gold traded near $4,900 an ounce. Bitcoin slumped below $70,000, a level last seen in 2024 amid wider cross-asset stress.

This morning, the Bank of England came within a vote of cutting interest rates as policymakers split 5-4 in favor of holding at 3.75%. The pound extended losses after the decision, having been under pressure as a fresh round of political turbulence weighed on UK assets. Shorter-end gilts jumped as traders ramped up bets on a rate cut in March, sending two-year yields eight basis points lower to 3.62%. 

In geopolitics, China is asking state firms to halt talks over new projects in Panama. The Trump administration hosted a critical minerals summit with 55 countries to reduce dependence on China, with the US pitching price floors and US private equity investment.

Out of the 254 S&P 500 companies that have reported so far in the earnings season, 79% have managed to beat analyst forecasts, while 17% have missed. ConocoPhillips, Bristol-Myers Squibb and KKR are among companies expected to report before the market open. ConocoPhillips heads into 4Q against a softer crude backdrop, with trimmed volumes and leaner capital spending. Earnings from Amazon and Microchip follow later in the day: as usual, AI spending plans will be the main focus.

Europe’s Stoxx 600 fell 0.4% to 615.69. Trading in Europe signaled that the rotation away from tech into economically sensitive stocks was slowing. The Stoxx 600 headed for its worst day in more than two weeks as the auto sector led losses, while chemical and retails stocks also underperformed. Here are some of the biggest movers on Thursday:

• BNP Paribas shares rise as much as 4.7% after the French lender reported net income for the fourth quarter that beat the average analyst estimate and raised some targets, with KBW analyst saying earnings are solid and JPMorgan noting that new targets imply upside.
• Pandora rises as much as 8.2%, driven by a plunge in the spot silver price and after reporting its full-year 2025 results.
• Rational shares rise as much as 16% after the German manufacturer of catering appliances impressed analysts with its fourth quarter profits and cost discipline.
• Danske Bank shares rise as much as 4.5% to a record high as the Danish lender’s quarterly profits and revenues beat expectations.
• Rheinmetall shares fall as much as 9.5% after the German maker of tanks and ammunition hosted a pre-close call with analysts which implied downgrades to consensus numbers for 2026.
• Siemens Healthineers shares drop as much as 2.7% after the German medical equipment maker reported sales for the first quarter that missed expectations, hurt by its diagnostics business, while earnings were better than expected.
• Shell slips as much as 2.6% after delivering fourth-quarter earnings below analyst expectations, with Morgan Stanley saying that estimates had already come down ahead of the report.
• Maersk falls as much as 8.2% after the Danish shipping group provided an outlook for 2026 in which it expects earnings to fall as the reopening of the Red Sea shipping route leads to lower rates.
• Volvo Car shares fall as much as 24%, their biggest drop on record, after the automaker reported weaker-than-expected fourth quarter earnings, dragged down by poor demand and pressure on prices.
• Saab shares fall as much as 4.6% after full-year results as Morgan Stanley says a midterm guidance raise only implies limited upgrades to consensus.
• Vestas shares fall as much as 7% after the Danish wind company forecast revenue for 2026 of €20 billion to €22 billion. Analysts at RBC Capital and JPMorgan blame a weaker services segment for dragging revenue.

In fx, the dollar rose 0.2%, hitting the highest level in two weeks amid the selloff in precious metals. The pound tumbled after the Bank of England came within a vote of cutting interest rates as policymakers split 5-4 in favor of holding at 3.75%; the currency was under pressure as a fresh round of political turbulence weighed on UK assets. Shorter-end gilts jumped as traders ramped up bets on a rate cut in March, sending two-year yields eight basis points lower to 3.62%.

In rates, treasury yields fell as US companies announced the largest number of job cuts for any January since 2009, according to data from Challenger, Gray & Christmas Inc. The 10-year rate slipped two basis points to 4.52%. The European Central Bank is expected to stand pat on rates later on Thursday. The euro was little changed.

In commodities, oil prices decline for the first time in three days after Iran confirmed it would hold negotiations with the US, easing tensions in the region. Spot silver is down over 10% while Bitcoin falls almost 4% below $70,000. 

Challenger job cuts for January are due at 7:30 a.m. ET, followed by JOLTS job data for December at 10 a.m. Fed’s Bostic is scheduled to speak at an event at 10:50 a.m.

Market Snapshot

• S&P 500 -0.4%
• Nasdaq 100 mini -0.6%
• Russell 2000 mini -0.5%
• Stoxx Europe 600 -0.6%
• DAX -0.5%
• CAC 40 little changed
• 10-year Treasury yield -1 basis point at 4.27%
• VIX +0.9 points at 19.54
• Bloomberg Dollar Index +0.2% at 1194.43
• euro -0.2% at $1.1783
• WTI crude -1.5% at $64.19/barrel

Top Overnight News

• Warsh believes that the AI boom is the “most productivity enhancing wave of our lifetimes – past, present and future,” leaving the Fed space to cut rates without stoking inflation. FT
• Republican Senator Hawley is circulating a bill around Congress that would ensure the costs of data centre’s energy use is not passed onto consumers: Axios 
• President Trump commented that Fed is in theory an independent body, adds looking at tariff rebate checks very seriously, but hasn’t committed to tariff rebate checks yet, while he discussed expanding immigration operations to five cities.
• December’s delayed JOLTS report is expected to show a modest rebound in job openings after recent declines, but slow hiring, cautious worker churn and weak quits suggest the labor market remains subdued. BBG
• Most Chinese provinces are targeting lower economic growth this year, in what many economists believe is a signal Beijing will set a historically low range of 4.5-5% for its official goal in 2026. FT
• A landslide win for Japan’s ruling Liberal Democratic Party (LDP) at Sunday’s election may be the best outcome for bonds and the yen, even as Takaichi’s spending pledges have repeatedly rocked markets. Analysts say an overwhelming LDP victory may in the end be positive for bonds, as it would eliminate the need for Takaichi to negotiate with opposition parties, who are touting even deeper tax cuts and broader fiscal spending. RTRS
• Japan’s 30-year bonds gained after an auction of that tenor drew stronger demand, easing immediate concerns about longer-maturity debt just days from a closely watched election. The yield on 30-year bonds fell as much as seven basis points to 3.565% after the bid-to-cover ratio at the Ministry of Finance’s sale rose from last month’s auction. BBG
• German factory orders unexpectedly rose at the fastest pace in two years, supporting expectations of a recovery in the key manufacturing sector. Factory orders for December come in very strong at +7.8% M/M (vs. the Street -2.2%). FT
• UK political turmoil weighed on sterling and gilts as fresh doubts emerged over PM Keir Starmer’s grip on power. The gap between two-year and 10-year gilt yields steepened to the widest since 2018, while sterling was the worst-performing currency among peers. BBG
• Lisa Cook said the Fed must maintain its credibility by returning inflation to target in the near future. BBG
• Volodymyr Zelenskiy called on Trump to send more weapons for his military, according to an interview with France 2. Kyiv also said meetings between Ukraine, the US and Russia in Abu Dhabi were “meaningful and productive.” BBG

Trade/Tariffs

• India’s Foreign Ministry said they are looking to explore commercial merits of any crude supply, including from Venezuela.
• India’s Trade Ministry Officials said that India will need to import USD 300bln annual worth of goods and the US will be one of the key suppliers of energy, aircraft and chips.
• Indian Trade Minister said we will announce the first tranche of a trade deal agreed with the US.
• China’s Foreign Ministry said we oppose any country forming small groups to disrupt international economic and trade order.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were mostly lower following the continued tech selling stateside and flip-flopping regarding US-Iran talks, while commodities were pressured overnight with silver prices dropping by a double-digit percentage. ASX 200 was dragged lower by weakness in mining and resources stocks after underlying commodities prices took a hit, but with the losses in the index stemmed by resilience in financials and consumer stocks. Nikkei 225 saw early indecision but eventually slipped below the 54,000 level alongside the downbeat mood in the region. Hang Seng and Shanghai Comp declined with notable weakness in miners, property names and insurers, while an increased liquidity effort by the PBoC and reports of an ‘excellent’ call between Trump and Xi failed to spur risk appetite.

Top Asian News

• Chinese provinces set lower growth targets for 2026, according to FT.
• China is said to pause Panama deals after CK Hutchinson’s (1 HK) port operations were nullified.

European equities (STOXX 600 -0.6%) are broadly lower, though the AEX is mildly firmer, boosted by strength in ASML (+1.1%). The chip giant has been boosted after Google noted it would boost AI spending. European sectors hold a negative bias. Basic Resources underperforms given the pressure in the metals complex, whilst Shell (-2%, Q4 metrics light) weighs on the Energy sector. Other key movers include Volvo Car (-22%) after poor results and a dire outlook.

Top European News

• Maersk (MAERSKB DC) Q4 (USD) EBITDA 1.8bln (exp. 1.84bln), Revenue 13.3bln (exp. 12.9bln).
• Shell (SHEL LN) Q4 (USD): Adj. Profit 3.26bln (exp. 3.51bln), EPS 0.57 (exp. 0.63), Adj. EBITDA 12.79bln (prev. 14.77bln Y/Y), announces USD 3.5bln share buyback programme.

FX

• DXY is kept afloat as it continues to claw back losses seen towards the end of January. That being said, the upside is limited following mixed data releases stateside and with plenty of focus on geopolitics amid reports that US-Iran talks scheduled for Friday were off, and on again. DXY has topped resistance seen around the 97.70-97.75 area to reach a current high of 97.83, still some way off the 23rd Jan high at 98.481.
• GBP/USD is among the laggards heading into the BoE, but likely more on political factors at the moment, with UK PM Starmer’s premiership coming under scrutiny for his decision to appoint Peter Mandelson as the US ambassador despite links to Epstein. Back to the BoE, the Bank Rate is expected to be maintained at 3.75%, with some mixed views on the vote split. GBP/USD resides towards the bottom end of a 1.3576-1.3664 range.
• EUR/USD resides in a narrow 1.1783-1.1809 range ahead of the ECB announcement and presser. The ECB is expected to keep its rates on hold, a view held by the likes of Goldman Sachs and Morgan Stanley. Data developments play in favour of keeping rates steady; inflation dipped below the Bank’s target in January, but largely due to base effects. Focus this meeting will be on any commentary surrounding the stronger EUR, trade/geopolitical uncertainty and higher gas prices.
• USD/JPY continues rising amid the firmer USD, with the pair back above 157.00, with yen weakness persisting throughout the week ahead of the snap elections on Sunday. Elsewhere, Antipodeans are softer with AUD the G10 laggard amid headwinds from the subdued risk appetite and selling pressure in commodities.

Central Banks

• Fed’s Cook (voter) said she will continue to carry out duties at the Fed and she looks forward to getting to know Warsh. said:Hopes that goods inflation will dissipate quickly, and once they do, should be back on the disinflation path.
• Fed’s Cook (voter) said she is focused on inflation risks and noted that when considering the proper stance of monetary policy, she sees risks to both sides of the dual mandate. said:. Progress on inflation has stalled, while such a plateau is frustrating after seeing significant disinflation in the preceding few years. It is essential we maintain credibility by returning to a disinflationary path.
• Federal Reserve finalizes big bank stress test criteria, votes to keep current capital buffer; Bowman said freezing bank capital levels allows Fed to correct any “deficiencies” in stress test models.
• Westpac’s Ellis said can’t rule out the RBA raising interest rates for a second consecutive time in March, according to Bloomberg.
• China Securities Daily reported that analysts now expect PBoC RRR ‘cuts’ in Q2.

Fixed Income

• USTs are currently firmer by a couple of ticks and trade within a narrow 111-18+ to 111-24 range. Not much driving things for the benchmark this morning, but the focus has been on geopolitics. On Wednesday, it was reported that the US-Iran talks were cancelled, but are now back on and set to happen on Friday. Back to the US, the BLS provided an updated data schedule following the recent partial shutdown. JOLTS is set to be released today; NFP on Feb 11 and CPI on Feb 13. That aside, Jobless Claims is due today, with traders looking to see if the labour market remains in its recent “low hiring – low firing” environment.
• Bunds trade steady and in a narrow 127.88-128.07 range. Really not much driving things for the benchmark this morning aside from EZ Construction PMIs and Retail sales, which had a limited impact on price action. Ahead, the ECB is set to keep its deposit rate at 2.00% and is likely to reiterate that the Bank is in a good place. Focus will be on the recent strength of the EUR and any comments related to potentially undershooting inflation.
• Gilts are underperforming this morning, currently lower by around 40 ticks. Initially gapped lower by around 19 ticks, and then extended lower to make a trough of 90.13. The underperformance in Gilts today can be attributed to the increased pressure that PM Starmer is facing for his decision to appoint Peter Mandelson as the US ambassador, despite knowing about his links to Epstein. As it stands, several MPs are calling for Starmer to resign whilst others are calling for the sacking of Chief of Staff McSweeney; MP Turner said if he does not sack him, then his own back will be “up against the wall… soon” – nonetheless, the did suggest that there is still support for the PM adding that MPs do not want him to go. As it stands, Polymarket odds of Starmer to be out the door by June 30th have risen to 47% (vs 23% yesterday).

Commodities

• Crude benchmarks continued to trade with a lack of clear direction. The pressure seen at the start of the week (following plans of US-Iran talks) was completely reversed in Wednesday’s session over reports that the talks have been cancelled due to Tehran’s demands to change the location and talk format. Late in Wednesday’s session, Iran’s Foreign Minister reconfirmed that talks are back on in Oman for Friday. Prices dropped at the end of the US session. As the European session got underway, benchmarks reversed overnight losses, with Brent returning above USD 68.50/bbl. Today is the expiration day of the New START Treaty. This outcome was expected amid a lack of effort from both sides to renew the agreement.
• Spot gold ended Wednesday’s session below the USD 5,000/oz handle but attempted to regain above the level at the start of the APAC session, but failed to do so. The yellow metal fell to a low of USD 4,790/oz, weighed on by the plunge in silver prices, before slightly paring back losses as European trade gets underway.
• Spot silver wiped out the entirety of the two-day recovery the metal attempted to stage as trade at the Shanghai Metals Exchange got underway. The metal kissed USD 90/oz before slipping to a trough of USD 73.55/oz, with losses seen as much as 16%. Dip-buyers took advantage of the lower prices, with silver prices currently trading around USD 80/oz.
• China gold consumption reportedly fell by 3.6% to 950 tons in 2025 and total gold production rose 3.35% Y/Y to 552 tons.
• 3M LME Copper continued the selloff seen throughout the US session, with the red metal dipping below USD 13k/t to a trough of USD 12.86k/t. This comes following continued worries that AI will become a bigger factor within business models. The tech sector has been weighed on in recent sessions, as in turn, dragged copper prices lower

Geopolitics: Ukraine

• US Envoy Witkoff said that discussion between US, Ukraine and Russia were productive but “significant work remains”; talks will continue, with additional progress anticipated in the coming weeks; Ukraine and Russia agreed to exchange 314 prisoners.
• Russia’s Kremlin spokesperson confirms the New START Treaty ends today.
• Russian Envoy Dmitriev said Russia-US meetings in Abu Dhabi are positive; progress on a peace deal despite pressure from the EU and UK; active work ongoing to restore Russia-US relations.

Geopolitics: Middle East

• Israeli security assessments note Houthis may attack Israel if Washington launches a strike against Iran, according to Sky News Arabia.
• Palestinian media reported Israeli artillery shelling targeting the Al-Bureij camp in the central Gaza Strip.

US Event Calendar

• 8:30 am: United States Jan 31 Initial Jobless Claims, est. 212k, prior 209k
• 8:30 am: United States Jan 24 Continuing Claims, est. 1850k, prior 1827k
• 10:00 am: United States Dec JOLTS Job Openings, est. 7250k, prior 7146k
• 10:50 am: United States Fed’s Bostic Speaks with Dean of Clark Atlanta University

DB’s Jim Reid concludes the overnight wrap

Morning from Paris as the global tour continues. There’s plenty to talk about as 2026 continues to develop in a fascinating way and Tuesday’s software sell-off broadened into a wider tech rout yesterday, as concerns about AI disruption pushed the NASDAQ (-1.51%) and the Mag 7 (-1.75%) to further declines, which in turn meant the S&P 500 (-0.51%) fell back for a second day running. However, it wasn’t all bad news, as the ongoing rotation out of tech meant the equal-weighted S&P 500 (+0.88%) closed at a record high, as did Europe’s STOXX 600 (+0.03%). So there’s a pretty divergent narrative at the minute, whereby tech stocks are being squeezed sharply, but a lot of broader indices are still holding up for the most part. If that’s not enough excitement for you, Silver has fallen -14% overnight and Alphabet has stunned the world with a capex spending plan of as much as $185bn this year, 55% more than expected. With tech in a current state of flux it’s not clear whether that’s a good or a bad thing. Alphabet has been the brightest star in the tech space in the last 6 months so this is a big story for markets.

I explored the tech story in my chart of the day yesterday (link here), looking at various stocks and how far they were beneath their 52-week high. It shows how recent months have seen a shift from the “every tech stock is a winner” mindset to a more brutal landscape of winners and losers. There are lots of losers but note that Alphabet has added $1.7tn market cap over the last 6 months (adding over 70% of its value), offsetting a lot of other losses and helping the S&P 500 to still be only -1.37% beneath its all-time high.

Last night Alphabet’s results delivered a solid revenue beat, with Google Cloud revenue growing 48% to $17.7bn in Q4 (vs $16.2bn expected). However, this was accompanied by a surge in the company’s CAPEX plan to $175-185bn in 2026, effectively doubling its 2025 spend and well above the average analyst estimate of $120bn. Alphabet’s shares saw some sizeable volatility in after-hours trading (falling -7% at one point) but were little changed in the end after falling by -1.96% in the regular session. This morning, S&P 500 (+0.03%) and NASDAQ 100 (+0.14%) futures have been fluctuating between gains and losses.

Yesterday’s sell-off was led by a fall in AMD (-17.31%), which was the second-worst performer in the S&P 500 after the company’s latest outlook disappointed investors. So that marked its worst daily performance since 2017. That weighed on chipmakers, with the Philadelphia Semiconductor index down -4.36% including a -3.41% retreat for Nvidia, and the news fed into the wider narrative of tech weakness in recent days. Moreover, we saw the impact in other asset classes too, as Bitcoin (-4.61%) fell back to its lowest level since November 2024, at $72,627.

Despite the headline losses, there were an impressive 363 advancers in the S&P 500, which was actually the most in two weeks. Energy stocks (+2.25%) led the gains as Brent crude rose +3.16% amid renewed concern over US-Iran escalation. Oil spiked after Axios reported that plans for nuclear talks with Iran were at risk of collapse and as President Trump said that Iran’s supreme leader Ayatollah Khamenei “should be very worried”, though it pared back some of the rise on news that Friday’s talks were still set to go ahead with Brent down -2.16% to $67.96/bbl overnight as I type.

Prior to that, other newsflow yesterday leant on the more positive side for markets, including the news that Presidents Trump and Xi had another telephone conversation. According to a post from President Trump, they discussed various topics, and he said China had committed to purchasing 25mn tonnes of soybeans for next season. So that meant soybean futures (+2.49%) posted their biggest jump since November, and it added to hopes that the trade truce between the two sides would remain in place.

Meanwhile, the US data yesterday continued to paint a broadly positive picture. The ISM services print came in at 53.8 (vs. 53.5 expected), which is its highest level since late-2024. However, some of the details were a bit more mixed, as the subcomponents for new orders (53.1 vs 56.5 expected) and employment (50.3 vs 51.7 expected) missed expectations. Moreover, the prices paid component ticked back up to 66.6 (vs. 65.0 expected), and that’s been a strong leading indicator for US inflation, which added to concern on that front. Meanwhile, the ADP’s report of private payrolls also came out weaker than expected in January at 22k (vs. 45k expected), with a slight downward revision to prior months. Normally that would be followed by the jobs report tomorrow, but given the partial government shutdown, the BLS confirmed yesterday that it was being postponed to Wednesday next week.

Lastly in the US, we had the Treasury’s quarterly refunding announcement, which came out unchanged in line with expectations.  Treasury yields were mixed in response, with the 2yr yield falling -1.6bps amid the risk-off mood but 10yr (+1.0bps to 4.28%) and 30yr (+2.3bps to 4.92%) yields continuing to rise. Indeed, that brought the 2s10s slope up to 71.6bps, its steepest since January 2022, before the Fed started its post-Covid hiking cycle. Overnight, 10yr USTs are -1.0bps lower trading at 4.26% as we go to print.

Over in Europe, attention will be all on central banks today, as both the ECB and BoE are announcing their latest decisions. The ECB is widely expected to keep its deposit rate on hold at 2%, and our European economists think that it’ll continue to emphasise two-sided risks to growth and inflation. However, the risk is that the ECB sounds more dovish than before, given heightened geopolitical uncertainty and the recent appreciation in the euro. You can see their full preview here. Meanwhile for the BoE, our UK economist also expects no change in Bank Rate (3.75%), with a 7-2 vote tally to keep policy on hold (see his preview here). Indeed it’s worth keeping a closer eye on the UK with PM Starmer under considerable domestic pressure given the handling of the Peter Mandelson story. 10yr Gilts were up +2.9bps yesterday bucking the international trend as concerns grew that he could be replaced. So one to watch. 

Asian equity markets are lower this morning with the KOSPI (-3.98%) standing out as the largest underperformer, having surged to record highs in the previous two sessions, with major index constituents Samsung Electronics and SK Hynix both falling by over -5.0%. The index is still up over +22% in 2026 so far. Chinese stocks are also lagging behind, as evidenced by the Hang Seng (-0.68%), the CSI (-0.52%), and the Shanghai Composite (-0.59%), all of which are trading significantly lower. In other markets, the Nikkei (-0.85%) is also trading lower, retreating from the record highs it reached earlier this week.

Ahead of today’s ECB decision, yesterday we received the Euro Area flash CPI print for January, with headline inflation in line with expectations at +1.7%, marking its lowest level since 2021. Core CPI was still higher at +2.2%, but a bit below expectations for a +2.3% print. So that added to expectations the ECB might still cut this year, and yields on 10yr bunds (-3.1bps), OATs (-1.9bps) and BTPs (-2.9bps) all moved lower. Moreover, the 30yr German yield also fell -2.5bps to 3.52%, down from its post-2011 high the previous day. Meanwhile for equities, things were modestly positive, with record highs for the STOXX 600 (+0.03%) and the FTSE 100 (+0.85%), although the German DAX (-0.72%) struggled amidst a sharp fall in industrial stocks.

Looking at the day ahead, in addition to the ECB and BoE decisions, we’ll hear the Fed’s Bostic speak, BoC Governor Macklem speak, and get the BoE’s DMP survey. In terms of data, we’ll get the US initial jobless claims, UK January new car registrations, construction PMI, Germany December factory orders, January construction PMI, France December industrial production, Italy December retail sales, Eurozone December retail sales. Finally, earnings include Amazon, Shell, BBVA and Sony.

Submitted by Thomas Kolbe

A fiscal storm is brewing in the Netherlands. With the potential introduction of a tax on unrealized capital gains, The Hague is set to become a testing ground for the systematic transfer of wealth from the private sector to the state. Across all government levels, the European Union is increasingly transforming into an aggressive parasitic system.

A fundamental clash between the public and private sectors is intensifying across the EU. In March, both chambers of the Dutch parliament will decide on the implementation of an annual tax on unrealized gains. Going forward, all increases in value—from real estate and stocks to bonds and cryptocurrencies—would fall under this fiscal framework.

This move significantly accelerates the extraction of capital from the private sector, constituting a political rule violation. Already taxed income and assets would be hit again based on hypothetical gains, severely impeding private wealth accumulation.

Support for this measure spans both right- and left-wing parties. It reflects a form of fiscal horseshoe logic, apparently anticipating a severe national financial crisis.

For the EU as a whole, this is disastrous. That a nation with a debt ratio of just 46% and new borrowing of slightly over 2% of GDP would effectively declare war on private capital signals profound economic distortions in one of Europe’s most successful economies. One naturally asks: if this is happening in the Netherlands, what does it say about the rest of the European Union?

The End of the Productive Economy

A glance at Eurozone manufacturing suggests a storm is brewing. Deindustrialization in Germany, the largest industrial base in Europe, began in 2018 and has accelerated ever since, with massive capital flight. What applies to Germany applies even more so to the fragile peripheral European economies.

For decades, Europe’s economy has shifted from production toward financial and wealth-rentier models. As financialization advances, production and value creation increasingly relocate abroad. This mirrors a process the United States underwent for decades and attempted to reverse under President Donald Trump.

European states see no escape from the economic death spiral created by expanding welfare systems, uncontrolled migration, and slowly shrinking core industrial productivity. Politicians are buying time through the expropriation of citizen savings to evade growing reform pressure.

Once societal patience reaches a tipping point, Europe may witness scenes similar to those currently unfolding in the U.S., where the government has effectively declared war on illegal immigration amid a media-driven defensive battle coordinated by far-left forces, globalist media, and foreign foundations.

The pressing question for Europe: how long will native populations tolerate financial assault from the state without demanding corresponding migration and welfare reforms?

Several EU states already levy progressive inheritance and gift taxes. Norway recently introduced a wealth tax of roughly 1% on net assets above €160,000 per person, raising eyebrows in one of Europe’s richest nations. Spain applies a progressive wealth tax up to 3.5%, plus a solidarity wealth levy for assets above €3 million—“solidarity,” a political buzzword used to rhetorically justify impending fiscal expropriation.

This expropriation is imminent. Coalition parties have spent the past year laying the groundwork for a massive expansion of inheritance taxes. It would be unwise to rule out Germany’s politically influenced Constitutional Court approving a national wealth tax in the future.

Building the Command Economy

Germany is driving Europe toward socialism. Capital formation and independent family structures, which could form a powerful societal opposition, are increasingly despised by political elites.

There is no longer any denying it: the EU’s economic model and the manic drive to transform it into a green command economy reflect growing panic in Brussels, Berlin, and Paris. Every attempt to mask economic collapse with debt fails—the collateral damage of centrally planned green “artificial” economies seeps into public awareness.

The economic plight of weaker Southern European nations hardly needs detailed exposition. It is well known that the Eurozone has failed as a currency union attempting to integrate economies with wildly divergent productivity, such as Germany and Greece.

Now, cracks are visible, and states are defending their power through systematic extraction of private capital. Europe is on the defensive.

Europe in the U.S.

Wherever the European model has been adapted, politics is employing similar tools. The election of socialist Zohran Mamdani as New York City mayor last year drew attention. His victory was fueled by politically guided settlement of Muslim migrants, allied with the financial-left establishment, orchestrating a successful campaign.

With Mamdani’s election, vast capital is now politically—literally—trapped. Those who fail to relocate face massive taxation. Mamdani, campaigning on free public transit, rent caps, and public markets, announced plans this week to close a $10 billion budget gap with a wealth tax. 

New York is now a Democratic Party campaign hub, positioned against the heart of the conservative resurgence initiated by Donald Trump’s deregulation and tax cuts.

In California, the most European-leaning U.S. state, the “Billionaire Tax Act” was introduced, with Governor Gavin Newsom planning a one-time 5% wealth levy on net assets above $1 billion. Outmigration from the Golden State has already begun, along with tens of thousands of jobs relocating elsewhere. The shortsightedness of this policy is only surpassed by its childish aggressiveness.

Worldwide, it remains vital to preserve economic centers that defend market principles and private wealth accumulation—the torchbearers of civilization. Meanwhile, the EU’s descent into socialist barbarism seems all but inevitable.

* * * 

About the author: Thomas Kolbe, a Germany a graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

On potential upcoming US-Iran talks, the two sides can’t agree on scope – with Washington wanting to go beyond just the nuclear sphere and into the question of Tehran putting limits on its ballistic missile arsenal. The Iranians have given a firm no on this, and so the talks look doomed to fail. But Russia is now offering – or at least reiterating – a potentially huge overture.

“Moscow is willing to take what remains of Iran’s enriched uranium,” Russian Foreign Ministry spokeswoman Maria Zakharova has said Wednesday.

“At the same time, it is important to note that the aforementioned stockpiles belong to Iran. Their presence in no way contradicts Tehran’s obligations under the Treaty on the Non-Proliferation of Nuclear Weapons,” Zakharova stressed in a  fresh press briefing, as quoted by Kommersant.

This explanation backs the longtime insistence by Iranian leadership that its nuclear development is only for peaceful domestic energy, and not for weapons.

“Tehran has full rights to the material, including deciding whether to remove it from Iranian territory and where to export it,”  Zakharova added.

This is not the first time Moscow has offered to mediate some kind of solution, but the current crisis takes on extra urgency, given President Trump has threatened to bomb Iran again.

“Russia once offered to export Iran’s enriched uranium reserves to its territory. This initiative is still on the table,” Zakharova said in reference to a prior plan to do the same.

But Washington might find this unsatisfactory, again as its demands are going well beyond nuclear arms into conventional ones, and Tehran is not going negotiate its way into being defenseless against Israeli attack.

In fresh Wednesday statements in response to a question, Trump upped the threat – while still remaining ambiguous in terms of articulating plans or intent…

Q: Should the Supreme Leader in Iran be worried right now?

Trump: He should be very worried.

Source: NBC News https://t.co/W39oaI6hm2 pic.twitter.com/5qjaWfKRe7

— Clash Report (@clashreport) February 4, 2026

“I would say he should be very worried,” Trump told NBC News when what Iranian Supreme Leader Ayatollah Ali Khamenei’s feelings should be when faced with US military action.

Submitted by Thomas Kolbe

Following the Federal Network Agency, the umbrella organization of the energy industry is now also calling for the establishment of a national strategic natural gas reserve. The coordinated push by the sector makes it clear that the decline in gas storage levels is far more severe than politics has so far admitted.

Kerstin Andreae, chairwoman of the German Association of Energy and Water Industries (BDEW), called on Monday in an interview with the Redaktionsnetzwerk Deutschland for the creation of a national strategic gas reserve. 

Andreae emphasized the need for a robust buffer to absorb external shocks in Germany’s energy supply. With this demand, the BDEW explicitly aligned itself with the position of the Federal Network Agency, whose president Klaus Müller had already advocated for such a strategic reserve in a dpa interview last week.

Similar signals are now coming from the business world. The Oldenburg-based energy supplier EWE also considers the time ripe to discuss additional crisis instruments and to follow the examples of other European countries. Austria, France, and Poland already maintain strategic gas reserves to safeguard against supply crises.

Reality Ignored

It is remarkable that Germany has largely ignored fundamental questions of energy market design and the security of grids with baseload energy for years—a consequence of ideologically driven decisions, for which then-Federal Minister for Economic Affairs Robert Habeck also bears political responsibility.

Current figures underline the urgency of the situation. Gas storage levels in Germany are currently dropping by around one percent per day due to the cold weather, with overall fill levels now at roughly 30 percent.

In extreme cases—such as conditions similar to the winter of 2010—a gas shortage is entirely conceivable. In such a scenario, daily consumption could no longer be covered by additional LNG imports and remaining gas stocks. The result would be planned shutdowns, initially in energy-intensive industries, with cascading and dramatic economic effects across large parts of the economy. 

Germany in 2026 stands amid the ruins of its irrational energy policy. It reads like a bad joke that the country which dismantled its nuclear power, removed cheap Russian gas at Brussels’ behest, and now aims to exit coal-fired power, is discussing national gas reserves—all in the name of a politically and media-amplified climate hysteria.

Assurances and Stubbornness

Publicly, politics and the Federal Network Agency are working to downplay the problem of declining gas storage levels. Shortly before his dpa interview, Federal Network Agency President Klaus Müller told the Rheinische Post that the risk of supply problems was generally low. Germany had created greater flexibility through multiple import channels—both pipelines and newly built LNG terminals. Moreover, wholesale market prices showed no sign of scarcity, even if they had recently risen, Müller said. 

It is a rare skill to contradict oneself multiple times in just a few sentences, as Müller managed in this interview.

In contrast, the lobby group INES spoke of historically low levels of German gas storage. Last year at this time, the fill level was around 58 percent, and the year before, even 76 percent. The difference is not marginal, but structural—highlighting the growing vulnerability of the country’s energy security.

The Federal Ministry for Economic Affairs struck a similar tone. In January, it referred to the new import flexibility and recently saw no need for state intervention in the market—though one can hardly call the German energy network a “market” anymore, a fact perhaps still unnoticed in the ministry.

Energy economist Claudia Kemfert of the German Institute for Economic Research (DIW) also stated in January that there was no supply crisis and that imports remained stable. That now bad weather and cold snaps in North America threaten LNG deliveries from the main supplier, the USA—which is responsible for over 90 percent of Germany’s LNG supply—may be the irony of the weather gods. It changes nothing, however, about the fact that German energy policy is trapped between ideological blindness, general negligence, and an intellectual oversimplification of the core problem.

Germany now provides a textbook example of the consequences of centrally planned interventionist policy. Once set in motion, every further review of the increasingly distorted market design forces additional interventions and regulatory measures. The system is gradually transforming into a command economy. It is a downward spiral of supply that can only be broken if long-term measures enable the German energy sector to produce baseload-capable energy again.

This would include returning to Russian gas deliveries, reversing coal phase-out decisions, and adopting modern small modular nuclear reactors. These, by the way, do not produce traditional nuclear waste—an argument that immediately defuses reflexive objections from anti-nuclear opponents.

Worldwide, nuclear power is experiencing an impressive resurgence, particularly in the USA, China, and Russia. Only in Germany does ideological stubbornness prevent recognition of this reality.

Pressure must be applied to European policy to exploit substantial gas reserves, gaining geostrategic breathing space and at least partially freeing itself from the self-imposed stranglehold.

Irony of History

The emerging necessity of a national gas reserve carries two ironies. First, it is a belated admission of the complete failure of the energy transition. Renewable energies, due to their volatility and to maintain grid stability and supply security, require storage and reserve capacities that cannot be economically provided without massively burdening or partially collapsing the economy.

Second, it is precisely the declared arch-enemy of German policy, US President Donald Trump, who these days is calling not only for an existing strategic oil reserve but also for the creation of further national reserves. Washington intends to invest around twelve billion dollars to stockpile metals such as lithium, rare earths, nickel, and cobalt, thereby strategically reducing dependence on China and other raw material suppliers.

The terms “national” and “reserve” in the energy policy context are particularly offensive to the left-green milieu. There, people are unaccustomed to yielding to reality and recognizing that conservative thinking in matters of supply security, preparedness, and societal resilience is superior in every respect—including as a socio-political concept.

In the USA, supply security and strategic resilience sit prominently on the political agenda alongside energy market deregulation. In Germany, however, remarkable consistency is applied to stabilizing a green crony economy, whose economic viability is increasingly eroding.

German households will experience the consequences of this fatal error very concretely in their accounts over the coming weeks and months.

* * * 

About the author: Thomas Kolbe, a Germany a graduate economist, has worked for over 25 years as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.

The chairman of one of the nation’s top law firms suddenly resigned Wednesday evening after a series of embarrassing emails emerged between him and Jeffrey Epstein became public in recent days.

Brad Karp, who has been at the helm of law firm Paul Weiss for 18 years, gave no explanation for his decision – aside form a statement that “Recent reporting has created a distraction and has placed a focus on me that is not in the best interests of the firm.”

The firm, which has over 1,200 lawyers, represents some of the largest companies in the world, including Amazon, Exxon Mobil and the NFL – and has a reputation for providing free work to immigrant groups. 

According to new emails released by the DOJ, Karp was not only a guest at Epstein’s New York Mansion, the two exchanged emails on a regular basis. 

He coached Epstein during his underage sex-trafficking scandal, referring to accusers as ‘victims,’ (in quotes), and suggesting that they “lied in wait and sat on their rights for their strategic advantage, knowing you were in prison, before they came forward.”

Karp met Epstein through legal work for billionaire Leon Black, co-founder of Apollo Global Management. Black paid Epstein nearly $170 million for tax and estate planning advice (and totally not blackmail). Karp then began socializing with Epstein – at one point asking the disgraced financier for help landing his son a job on a Woody Allen movie. 

After Karp attended a dinner at Epstein’s Manhattan mansion in 2015 where Allen was present, Karp wrote to Epstein in an email that it was “an evening I’ll never forget,” referring to Epstein as “an extraordinary host” who was “amazing.”

One lawyer at Paul Weiss told the NY Times that the relationship has become an embarrassment, while others were upset that Karp received an email where Epstein suggested that Black should retain a private investigator to surveil a former mistress. 

On Monday, Karp said he regretted his interactions with Epstein, and had only “attended two group dinners in New York City and had a small number of social interactions by email, all of which he regrets.”

The joke is that Karp will remain at Paul Weiss… while their head of corporate practice, Scott Barshay, will take over as Chairman. Weiss said that Barshay had “over 30 years advising boards of directors and management teams on some of the most complex and highest-profile legal matters.”

Paul Weiss was also notably one of the Big Law firms that struck a deal with the White House to sidestep an executive order that would have effectively barred the firm from representing clients before the federal government.

In deciding to settle with the White House, Mr. Karp explained to the firm’s lawyers that the restrictions proposed by the Trump administration — like preventing Paul Weiss lawyers from entering federal buildings — would have prevented Paul Weiss from effectively representing its clients. But the settlement rankled many of the firm’s top litigators who wanted to challenge the White House’s executive order in court. –NYT

And now, Karp joins a growing list of Epstein file casualties.