Trump had kicked off the week by warning Iran that “bad things” would probably happen if a deal could not be reached. “We have ships heading to Iran right now, big ones – the biggest and the best – and we have talks going on with Iran and we’ll see how it all works out,” Trump told reporters in the Oval Office. “If we can work something out, that would be great and if we can’t, probably bad things would happen.”

“I’d like to see a deal negotiated. I don’t know that that’s going to happen,” he added. So far, Iran seems a willing participant, though at this point the reality is it has little to lose by risking such direct engagement.

The only thing which has remained up in the air is the venue. Initially widespread reports said the talks would be hosted by Turkey in Istanbul, but now the sides have their sights set on Oman.

Axios writes that these changes threaten to derail the talks before they even begin. “The Iranians want to move the talks from Istanbul to Oman,” the Wednesday report says.

“They also now want to hold them in a bilateral format, only with the U.S., rather than with several Arab and Muslim countries attending as observers,” it adds.

But Axios says that the Trump administration has agreed to the request from Tehran to hold the talks in Oman.

The bigger issue is going to be the scope of the talks. Iran is willing to engage on the nuclear issue, but will not negotiate over its ballistic missiles, seen as essential for national security and in any future war with Israel.

“A source with knowledge said that’s because the Iranians want to limit the talks to nuclear issues and not discuss things like missiles and proxy groups that are priorities for other countries in the region,” states Axios.

On Tuesday Trump had followed with more comments:

“They had a chance to do something a while ago, and it didn’t work out. And we did ‘Midnight Hammer’, I don’t think they want that happening again,” he said.

This time, Tehran is warning that it is ready to strike back hard if attacked, 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.

NEW: Direct talks not currently on agenda as Iran-US set to resume negotiations in Oman. Qatari PM may join, no word yet on other regional officials. Also potentially joining: Jared Kushner.

Apart from differences over substance, concern that indirect talks won’t cut it. pic.twitter.com/1bCWoymsiY

— Mohammad Ali Shabani (@mashabani) February 4, 2026

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.

While we will not be getting the payrolls report this week (due to a very brief govt shutdown), ADP’s Employment report paints a poor picture for hiring (even if jobless claims paints a healthy picture for ‘not firing’) adding just 22k jobs (well below the 45k expected).

Goods producing firms added just 1k jobs (Construction +9k, Manufacturing -8k – which has lost jobs every month since March 2024) while Services firms saw only 21k jobs added (with health care a standout, adding 74k job, while Profesional Services lost 57k jobs)

“Job creation took a step back in 2025, with private employers adding 398,000 jobs, down from 771,000 in 2024,” said Dr. Nela Richardson Chief Economist, ADP.

Interestingly, Small firms saw joib additions while large firms saw job losses…

The ADP report, published in collaboration with the Stanford Digital Economy Lab, showed workers who changed jobs saw a 6.4% increase in pay, decelerating from the prior month. Those who stayed put saw a slight pickup in pay gains.

“While we’ve seen a continuous and dramatic slowdown in job creation for the past three years, wage growth has remained stable.”

So, in summary, the ‘no hire, no fire’ labor market keeps chugging along, despite considerable optimism over economic growth.

US stock futures are up small with Tech lagging on rotation fears, though major indices are off their overnight lows. The AI narrative has been flipped upside down, with traders focused on perceived losers, most of which are in the Software sector, where “there’s no floor” according to one investment manager. As of 8:00am ET, S&P futures are up 0.2%, well off session lows; Nasdaq futures rise 0.2%, pressured by weakness in AMD which tumbled 8% after projections which disappointed Wall Street; Alphabet is set to report after the close. Pre-market, Mag7 are mixed with AAPL, AMZN, and GOOG higher with Semis under pressure (AMD -7%, AVGO -0.8%, NVDA -0.1%). Both Cyclicals and Defensives are mixed without a clear leader. The USD is bid as bond yields are higher by 1-2bps.Commodities are stronger led by Energy and Metals, with gold blasting off back over  $5k, and silver rising above $90. Today’s macro data focus is on ISM Services where an in line / stronger print may create a renewed bid for stocks.

In premarket trading, Mag 7 stocks are mostly higher: Alphabet +1% ahead of earnings due after the market close (Microsoft +0.1%, Amazon +0.3%, Apple +0.3%, Nvidia +0.3%, Meta little changed, Tesla -0.06%)

• AMD (AMD) slides 9% after the chipmaker’s sales forecast underwhelmed investors, a sign that it’s not making the AI inroads that some on Wall Street anticipated.
• Boston Scientific (BSX) falls 9% after the maker of medical devices gave a profit and sales growth forecast for 2026 that fell short of Wall Street’s expectations.
• Chipotle (CMG) falls 5% after the restaurant chain operator’s underwhelming annual comparable sales forecast.
• Eli Lilly & Co. (LLY) rises 7% after providing an upbeat sales forecast for the year as strong demand for its weight loss drug cemented its position at the top of the obesity market.
• Emerson Electric (EMR) rises 4% after the automation technology provider reported 9% growth in underlying orders in its first quarter. Citi said orders and other results show a “largely healthy demand environment.”
• Johnson Controls (JCI) rises 8% after the HVAC company boosted its adjusted earnings per share forecast for the full year to a figure above what analysts expected.
• Lumen Technologies (LUMN) falls 4% after the wireline telecommunications company’s results and outlook prompted a downgrade from Raymond James.
• Lumentum (LITE) rises 10% after the maker of optical and photonic products posted stronger-than-expected second-quarter results and gave a robust forecast.
• Match Group (MTCH) jumps 7% after the dating service provider reported revenue for the fourth quarter that beat the average analyst estimate.
• Silicon Laboratories (SLAB) jumps 53% after agreeing to be acquired by Texas Instruments for $231 per share in cash.
• Sonos (SONO) rises 12% after the speaker company’s first-quarter results beat expectations on key metrics.
• Take-Two Interactive (TTWO) rises 5% after the video game publisher raised its fourth-quarter bookings forecast. Analysts are positive about the company reiterating the launch date of its highly anticipated Grand Theft Auto VI.
• Uber Technologies Inc. (UBER) falls 6% after giving a weak profit outlook and promoted an outspoken driverless-vehicle bull to be its new chief financial officer, signaling further investment in a closely watched area of the ride-hailing company’s business.

Economically sensitive shares were Wednesday’s biggest gainers, with futures for the Russell 2000 index of small caps advancing 0.4%, while tech treaded water after a historic rout for SaaS/Software names. The rotation into cyclical stocks persisted as renewed fears over AI-driven disruption weighed on markets. Tuesday’s selloff was sparked by a new automation tool from Anthropic PBC, with losses spilling into financial services and asset managers. Caution lingered on Wednesday, with a European basket of stocks seen at risk from AI disruption falling another 1.1%.

“I don’t think the market has fully resolved whether this move was based on fear or fundamentals. What’s clear is that we’ve had a confidence break, really, at the category level,” said Stephanie Niven, portfolio manager at Ninety One. “Before convictions can be rebuilt at that really important company level, we are seeing this kind of indiscriminate selling.”

Disruption fears have added a new layer of complexity in distinguishing winners from losers in AI. With valuations stretched and earnings season under way, investors have already punished companies that failed to live up to elevated expectations. The mood among investors about software stocks and other sectors deemed at risk of AI advances is grim, according to JPMorgan Chase & Co. analyst Toby Ogg. Ogg met more than 50 investors across Europe and the US over two weeks and said he found that they had significantly reduced software holdings over the past 12 to 18 months. Even after the latest pullback, “the general appetite to step in remains generally low,” he said in a client note.

No one is interested in buying the dip, according to JPMorgan analyst Toby Ogg, and even good earnings won’t be enough, since AI disruption is a long-term issue. “We are now in an environment where the sector isn’t just guilty until proven innocent but is now being sentenced before trial,” he said.

“There’s clearly indiscriminate selling across the entire software cluster,” said Karen Kharmandarian, senior equity investment manager at Mirova in Paris. “There’s no floor, the downward momentum is too strong. It looks a bit like capitulation, which could offer opportunities selectively once things stabilize”.

The pain isn’t just in equities, with banks unable to sell a software loan deal. In options, the implied volatility of software stocks is blowing out versus the  S&P 500 ETF.

Another test looms for the AI trade when Alphabet reports after the close. The stock has been the top performer among the Magnificent Seven megacaps since the beginning of 2025. Peers Microsoft Corp. and Meta Platforms Inc. saw divergent reactions to their results last week, reflecting views over whether heavy AI spending is paying off.

“The biggest risk regarding tonight’s publication is the fact that there is a decoupling between Google’s long-term stature as an AI winner, thanks to its vertically integrated approach, and short terms trends in search and monetization, which might prove more erratic,” said Jacques-Aurélien Marcireau, co-head of equities at Edmond de Rothschild Asset Management.

European stocks reverse an earlier decline as an initial extension of the Anthropic-sparked software selloff eases. Stoxx 600 now up by 0.3% as gains in telecoms and chemicals offset mixed results from the financials sector and a large drop for drugmaker Novo Nordisk, which sank 16% after a disappointing sales outlook. Here are some of the biggest movers on Wednesday:

• Handelsbanken gains as much as 4.4% after posting a top-line beat in its full-year report.
• DNB Bank shares rise as much as 3.5% after the Norwegian bank reported net profit ahead of expectations, driven by beats in net interest income and fees.
• Mediobanca shares rise as much as 7.8% after MF daily reported that the board of the Banca Monte Paschi di Siena is begining to tilt toward a delisting of the taken over bank.
• Wendel shares rise as much as 7% after Germany’s Henkel agreed to buy Stahl Parent from Stahl Group, which is majority-owned by the French investment firm. BASF and Clariant also have stakes.
• AMS Osram shares rise as much as 13% after agreeing to offload its sensor business to Infineon for €570m in cash.
• Novo Nordisk shares plunge as much as 20% in Copenhagen after the drugmaker forecast a steep decline in sales this year that was also wider than analyst expectations.
• Software, IT, data services, ad agencies and exchanges are among the equity sectors leading losses in the European session on Wednesday, as they extend a selloff following persistent investor concerns over potential disruption from AI tools.
• UBS shares dropped as much as 5.5% despite a beat on 4Q earnings as it announced a below-expected $3 billion buyback program for 2026 that could increase during the year and maintained its financial targets for 2028.
• Santander shares drop as much as 5% after the Spanish lender announced the acquisition of Webster Financial in a $12 billion deal.
• Watches of Switzerland tumbles as much as 5.1% after the watch retailer cut the midpoint of its margin goal, countering the improved outlook for sales growth.
• DSV falls as much as 4.5% after the Danish shipping and logistics group guidance for 2026 disappointed, overshadowing decent 4Q figures.
• Novartis shares drop as much as 3.1% after the Swiss drugmaker reported net sales for the fourth quarter that missed expectations, while its 2026 Ebit forecast was also below estimates.
• Atalaya Mining Copper shares fall as much as 8.9% to 937 pence, slipping below the offering price after holder Trafigura Group sold 14 million shares at 945 pence per share.

Earlier in the session, Asian stocks slipped in another session dominated by technology concerns, after a broad selloff in the US on fears of disruption from artificial intelligence. The MSCI Asia Pacific Index fell as much as 0.6%, with software makers among the biggest decliners after Anthropic’s launch of a new automation tool. Hong Kong led losses and Japan’s Nikkei 225 also dropped, while stocks rose in South Korea, Australia and Thailand. 

Eli Lilly, Uber and Yum! Brands are among companies expected to report before the market open. Lilly investors will be looking for guidance on how the company sees the obesity market expanding following a deal with the Trump administration to widen access for some patients with Medicare. Rival Novo Nordisk’s guidance fell well short.

In FX, the dollar is stronger and the yen extended losses for a 4th session as traders anticipated a victory for Prime Minister Sanae Takaichi’s Liberal Democratic Party in this weekend’s poll.

In rates,treasuries are slightly cheaper across the curve, with yields around 1bp higher vs Tuesday’s close and lagging European bonds, which are higher after euro-area January inflation data and services PMIs. US session includes ISM services gauge, following Treasury quarterly refunding announcement at 8:30am. US 10-year yield near 4.28% is more than 1bp cheaper on the day while German counterpart is richer by about 2bp; UK 10-year is higher by less than 1bp European bonds rising and outperforming gilts and Treasuries. Euro-zone inflation cooled to the lowest level in more than a year.

In commodities, gold moves back above $5,000/oz and silver up to around $89/oz. Oil prices up, Brent above $67/barrel. Bitcoin hovered near $76,000.

The dollar and Treasuries were little changed.

US economic calendar includes January ADP employment change (8:30am), January final S&P Global US services PMI (9:45am) and January ISM services index (10am).Fed speaker slate includes Governor Cook on monetary policy and the economic outlook at the Economic Club of Miami (6:30pm)

Market Snapshot

• S&P 500 mini little changed
• Nasdaq 100 mini little changed
• Russell 2000 mini +0.3%
• Stoxx Europe 600 little changed
• DAX -0.1%, CAC 40 +0.7%
• 10-year Treasury yield +1 basis point at 4.28%
• VIX -0.1 points at 17.94
• Bloomberg Dollar Index +0.2% at 1189.69
• euro little changed at $1.1814
• WTI crude +0.7% at $63.66/barrel

Top Overnight News

• Donald Trump reiterated that the US and Iran are maintaining diplomatic talks, even after an American warplane shot down an Iranian drone in the Arabian Sea. BBG
• Trump’s Federal Reserve chair nominee Kevin Warsh faces a battle in the Senate after lawmakers threatened to hold up his confirmation until the DoJ halts its probes into Jay Powell and Lisa Cook. FT
• Nvidia is nearing a deal to invest $20 billion in OpenAI as part of its latest funding round, people familiar said. BBG
• Prime Minister Sanae Takaichi should not count on the Bank of Japan’s help in taming sharp bond yield rises given the huge cost of intervention, including the significant risk of igniting unwelcome yen falls, sources say. RTRS
• Hedge funds are using leverage to reap 28% returns from the safest of bonds. A key ingredient is their use of borrowed cash to juice returns, in some cases amplifying positions up to 15 times their initial investment. BBG
• Investors are ramping up bets on higher long dated Treasury yields and a steeper yield curve as incoming Federal Reserve Chair Kevin Warsh is expected to press for interest rate cuts while shrinking the U.S. central bank’s balance sheet. Warsh’s preference for a materially smaller Fed balance sheet, currently around $6.59 trillion, implies a withdrawal of meaningful government demand for Treasuries, a move which tightens financial conditions because the central bank is not providing liquidity to the market. RTRS
• Euro-area inflation slowed to 1.7% in January, the weakest reading in more than a year and further below the ECB’s 2% target. BBG
• Novo shares plunged after the drugmaker forecast sales decline of up to 13% in 2026, amid price pressure in obesity drugs. But Eli Lilly LLY is now +8% in the pre on Strong 4Q GLP-1 Momentum + Guidance Ahead of Street Quelling Last Minute Fear from NVO Guide. BBG, GS Trading
• NVDA CEO Jensen Huang dismissed fears that artificial intelligence will replace software and related tools, calling the idea “illogical”, after a significant selloff in global software stocks on Tuesday. RTRS
• Department of Labor said all agencies will fully resume to normal operations from the 4th of February 2026.

Trade/Tariffs

• US Senators push for USD 70bln funding deal to support US President Trump’s critical minerals agenda, FT reported.
• Indian Trade Minister said the US trade deal will offer a competitive advantage to Indian exporters and our priority is to energy security for our citizens. Need to bolster capabilities in many sectors including nuclear energy and data centres. India will raise trade with the US.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks were ultimately mixed as the region partially shrugged off the downbeat handover from Wall Street, where sentiment was mired by renewed tech-selling, while participants in the region also reflected on the latest Chinese PMI data and the end of the partial US government shutdown. ASX 200 climbed higher with the upside led by outperformance in miners as metal prices continued their recovery, but with gains in the index capped by heavy losses in the tech sector. Nikkei 225 slumped at the open but is off worst levels, while risk appetite was pressured following recent earnings, including disappointing results from Nintendo, which saw its shares suffer a double-digit percentage drop. Hang Seng and Shanghai Comp saw two-way price action as participants digested stronger-than-expected Chinese RatingDog Services PMI data, and after the PBoC drained liquidity, while it was also reported that NVIDIA AI chip sales to China are stalled by a US security review and that Chinese customers are meanwhile not placing H200 chip orders with the company.

Top Asian News

• China’s market regulator unconditionally approves CATL (3750 HK), Chery (9973 HK) and others joint venture formation.
• China’s Vice Finance Minister said China is facing persistent headwinds and policy uncertainty.
• New Zealand ANZ Commodity Price Index MM (Jan) +2.0% (Prev. -2.1%).

European bourses (+0.1%) are broadly firmer across the board, though the DAX 40 (-0.1%) has been pressured by post-earnings losses in Infineon (-2.3%). European sectors hold a positive bias. Telecoms and Chemicals leads whilst Healthcare is the clear laggard, hampered by post-earning losses in Novo Nordisk (-17.6%) and Novartis (-1%). The former reported strong headline metrics, though its 2026 guidance disappointed.

Top European News

• Germany sold EUR 3.197bln vs exp. EUR 4.0bln 2.50% 2032 Bund: b/c 1.51x (prev. 1.2x), average yield 2.60% (prev. 2.33%), retention 20.1 (prev. 23.87%).
• Germany’s VDA announces that 2025 EV production comes out at 1.67mln vehicles, +23% Y/Y.
• Europe’s safest corporate bond spreads drop to its lowest level since 2007.

Central Banks

• Fed Governor Miran resigned on Tuesday from his position as Chair of Council of Economic Advisers, Barron’s reported citing a White House official.
• BoJ won’t come to the rescue of a Takaichi-driven bond rout, with sources stating that Japanese PM Takaichi should not count on the BoJ’s help in taming sharp yield rises given the high cost of intervention including risk of igniting unwanted yen declines.
• PBoC announces plan to build a multi-level financial service system to support domestic demand, tech innovation and SMEs. To continue to support debt risk resolutions for financing platforms, back local government in market oriented reforms and guide financial institutions to provide services based on marker and legal principles.
• Riksbank Minutes: President Thedeen said “at present I assess that monetary policy is following a stable and reasonable course, and we can tolerate minor deviations in data outcomes without immediately needing to adjust the course we have set.

FX

• DXY resides within a narrow range within Tuesday’s 97.298-97.692 range after seeing weakness yesterday against most major peers, giving back some of the post-ISM spoils, while JOLTS data was delayed, and there were several comments from Fed speakers, but failed to move the dial. Overnight, US President Trump signed the USD 1.2tln spending bill to end the government shutdown, as expected, and thus NFP will likely be released next week (TBC). Today, however, desks are eyeing the private ADP and ISM Services PMIs.
• JPY is the underperformer vs the USD, EUR, and GBP, as the Japanese currency continued to lag amid the ongoing expectations for a landslide victory by Japanese PM Takaichi’s ruling LDP at the snap election on Sunday. USD/JPY topped yesterday’s 156.08 peak to print a current high of 156.59, but is still some way off the 23rd Jan high of 159.23.
• EUR/USD trades flat with little notable action seen on the Final Services and Composite PMIs. Little move also seen on the EZ HICP metrics, which were broadly in-line / cooler-than-expected. A report which will have little impact on policymakers at the ECB, who are set to meet on Thursday – as a reminder, the Bank is expected to keep its deposit rate steady at 2.00%.
• GBP/USD sees modest gains and narrowly gains despite the revisions lower in Final PMIs, but likely lifted by the GBP/JPY pair testing highs from 23rd Jan as the cross looks to test 215 to the upside, residing at levels last seen in 2008.
• Antipodeans are mixed with the Aussie buoyed by rebound in gold prices, whilst the NZD posts losses following ultimately mixed employment and labour cost data from New Zealand.

Fixed Income

• USTs are essentially flat in quiet trade and currently trading in a narrow 111-17 to 111-21+ range. Focus overnight was on the end of the US shutdown after the House voted (217-214) to pass the USD 1.2tln spending package to fund the government. Following this, the Department of Labor announced that all agencies will fully resume normal operations from the 4th of February 2026; there are currently no further details or guidance on whether the NFP due on Friday will be released.
• Nonetheless, focus turns to US data later; the monthly ADP national employment data will be released, where analysts expect 48k from the prior 41k. The ISM services PMI headline is expected to ease to 53.5 from 54.4, where employment is seen nudging up a little, but prices and new orders are seen easing a touch. From the supply front, the QRA is also due today.
• Bunds initially held a downward bias but then gradually picked up as the morning progressed; currently at the upper end of a 127.72-127.88 range. There have been a number of Final PMI metrics this morning, with the EZ figure revised a touch lower; the accompanying report suggested that the ECB may highlight growing services inflation in its policy decision this week. EZ HICP printed in line with expectations, and cooled from the prior; core metrics were a touch short of expectations. Overall, a report which will not shift much ahead of the ECB confab on Thursday. As a reminder, the Bank is expected to keep its deposit rate steady at 2.00% and largely reiterate that rates are at a good place. Next up, a 2032 Bund auction.
• Gilts are essentially flat and trade within a 90.88-91.06 range. Action has been fairly choppy this morning, but has moved off its best levels in recent trade. Aside from the UK’s PMI (revised a touch lower), catalysts for the benchmark are incredibly light. Focus now on the BoE on Thursday, where rates are expected to be kept unchanged.
• UK DMO plans to hold a programmatic gilt tender for a long conventional gilt on February 11th.
• Australia sold AUD 1.1bln 4.25% 2036 bonds, b/c 3.73, avg. yield 4.9012%.

Commodities

• Crude benchmarks initially held onto the gains seen in the latter end of Tuesday’s session, which came from reports that the US shot down an Iranian surveillance drone approaching the USS Abraham Lincoln. WTI and Brent peaked at USD 64.16/bbl and USD 68.25/bbl, respectively, early in the APAC session, just shy of Tuesday’s high, before steadily paring back and retracing to the key USD 63/bbl and USD 67/bbl handle.
• Spot XAU continues to rebound, with the yellow metal returning above the USD 5k/oz handle after hovering just shy of the level throughout Tuesday’s session. Gold rose throughout the APAC session, peaking at USD 5092/oz, before oscillating in tight c. USD 40 range. Similarly, spot silver has gradually bid higher and briefly held above USD 90/oz before falling back below the level as European trade continues.
• 3M LME Copper has thus far traded on both sides of the unchanged mark, fluctuating in a USD 13.29k-13.52k/t band, as risk tone overnight was mixed. Heightened concerns over AI weighed on the tech-heavy NQ during Tuesday’s trading day, and this followed through into Asia-Pacific equities.
• Morgan Stanley raises near-term Brent forecasts as geopolitical risk premium is likely to persist, but expects prices to fall below USD 60/bbl later this year.
• Ukraine’s Naftogaz said Ukraine has received a delivery of 100MCM batch of US LNG, making it the first delivery expected in 2026.
• Venezuela’s top Economic Advisor Ortega said he wants Venezuela to be known as a country with one of the highest oil production levels.
• China expands subsidies for energy storage industry as it seeks to support the country’s green transition and ensure reliable electricity supplies.

Geopolitics

• Ukrainian peace negotiators have arrived in Abu Dhabi and have started their first meetings, IFX reported.
• Russia’s Kremlin said it will defend its interest in the Arctic, via Sky News Arabia.
• Russia’s Kremlin said it has not seen any new developments when it comes to India and Russian oil.
• Russia’s Kremlin said Russia will continue its Special Military Operation until the relevant decisions are made by Ukraine.
• Ukraine’s Naftogaz said Ukraine has received a delivery of 100MCM batch of US LNG, making it the first delivery expected in 2026.
• China’s President Xi is to hold a video call with Russian President Putin, CCTV reported.
• Iran is to announce major structural and administrative decisions in the defence sector to respond to new threats, Iran’s Noor News reported.
• “Deputy Speaker of Iran’s Parliament: Iran and the United States likely reached preliminary understandings before sitting down at the negotiating table”, Sky News Arabia reported.
• Israeli artillery shelling reported in central Gaza, via Al Jazeera news.
• Israeli army announces airstrikes and tank shelling on militants after an Israeli officer was seriously injured, according to Sky News Arabia. IDF said shooting at our forces is a violation of the ceasefire agreement in Gaza, according to Al Arabiya.
• US President Trump said we are still negotiating with Iran and that there is more than one meeting with Iran.

US Event Calendar

• 7:00 am: United States Jan 30 MBA Mortgage Applications, prior -8.5%
• 8:15 am: United States Jan ADP Employment Change, est. 45k, prior 41k
• 9:45 am: United States Jan F S&P Global US Services PMI, est. 52.5, prior 52.5
• 9:45 am: United States Jan F S&P Global US Composite PMI, est. 52.9, prior 52.8
• 10:00 am: United States Jan ISM Services Index, est. 53.5, prior 54.4, revised 53.8
• 6:30 pm: United States Fed’s Cook Speaks on Monetary Policy and Economy

DB’s Jim Reid concludes the overnight wrap

It was a pretty brutal day in markets yesterday that wouldn’t be obvious with a quick glance of the screens, as a majority of the S&P 500’s constituents rose on the day. The reason was that Anthropic launched a new AI automation tool servicing legal work, which was perceived as a big threat to software firms and related stocks. So in Europe, RELX Plc, Wolters Kluwer, Experian, Thomson Reuters, and the LSE all fell around -10 to -15%, while in the US Gartner (-20.87%), Paypal (-20.31%) and Expedia (-15.26%) led the declines in the S&P 500. In turn, the overall US Software index (-4.60%) saw 104 decliners and only 9 risers, and its 6th successive decline to put the index back to April levels. Even the blue-chip Microsoft was down -2.87% and is now down -24% from its peak on October 28 last year.

So yesterday marked a dramatic acceleration of the trend we’d seen of late, and it means the 9 worst-performing companies in the S&P 500 YTD are all in the software and related services sectors, having now seen declines of 25% or more. While the question over the end-winners from AI is unlikely to be answered in 2026, recent months have seen a clear shift in markets from AI euphoria towards more differentiation between companies, and growing concern about its disruption to existing business models.

Those huge moves helped push the S&P 500 (-0.84%) down, despite being on course for another record high at the US open. The Nasdaq (-1.43%) and Mag-7 (-1.53%) clearly suffered more. And they’re still struggling for momentum this morning, with futures on the S&P 500 (+0.04%) basically flat.
To be fair, it wasn’t all bad news yesterday, with most of the S&P 500 constituents moving higher on the day. The ongoing rotation meant materials (+2.00%) and consumer staples (+1.71%) sectors extended Monday’s post-ISM gains, while energy stocks (+3.29%) were boosted by a renewed rise in oil. Those gains included Walmart (+2.94%), which became the 11th US company to reach a $1trn valuation. And the small cap Russell 2000 rose by +0.31% despite being down -1.30% at the day’s lows. Meanwhile in Europe, the STOXX 600 (+0.10%) just about managed to hit another record high, whilst Italy’s FTSE MIB (+0.90%) closed at its highest level since 2000, despite the broader struggles among tech stocks.

Another beneficiary of yesterday’s session were precious metals, which finally showed signs of stabilising after their recent slump. In fact, gold prices (+6.12%) posted their biggest daily gain since 2008, moving up to $4,947/oz, whilst silver (+7.43 %) was back up to $85.16/oz. Clearly they’re still a long way from the highs, but it was clear that dip buyers were coming back in after the biggest slump in decades. And that trend has continued overnight, with gold (+2.72%) now back up to $5,081/oz. The volatility was also visible in Bitcoin (-2.96%), which fell by as much as -7% to below $73k intra-day, which was its lowest level since Trump’s election victory in November 2024.

By contrast, it was a very steady day for US Treasuries, which saw little movement in either direction. In the end the risk-off backdrop sent yields lower, with the 2yr yield (-0.2bps) down to 3.57%, whilst the 10yr yield (-1.3bps) fell to 4.27%. But there were few concrete drivers behind that. Admittedly, we did hear from Richmond Fed President Barkin, who acknowledged the persistence of above-target inflation, and said “I take this sustained miss seriously”. But market pricing for the Fed was little changed yesterday either.

Those moves came as the latest US government shutdown came to end after four days, with the House passing the funding package that had been approved by the Senate last Friday. The legislation, which was then signed by Trump, will fund most government agencies through September, though Congress still faces a showdown over funding for the Department of Homeland Security which was extended only until next Friday (February 13) amid partisan tensions over immigration enforcement.

The market backdrop wasn’t helped by the continued geopolitical noise, with oil prices spiking after news that the US shot down an Iranian drone that approached a US aircraft carrier. Oil marginally pared its gains as the White House said that US-Iran talks led by Steve Witkoff were still scheduled for Friday, with Trump himself saying that “We are negotiating with them right now”. But Brent crude still closed +1.55% higher at $67.33/bbl, and has risen another +0.76% this morning to $67.84/bbl as we go to print.

Earlier in Europe, it was a bit more eventful as the 30yr German yield (+3.4bps) hit a post-2011 high of 3.55%. That comes as investors are increasingly focused on the fiscal stimulus, with higher debt issuance having pushed up long-end bond yields in recent months. Those moves for long-end German yields were part of a wider selloff across Europe, with yields on 10yr bunds (+2.2bps), OATs (+1.7bps) and BTPs (+1.7bps) all moving higher, not helped by the latest rebound in oil prices. To be fair, we did get a downside surprise in the flash CPI print from France yesterday, which fell to just +0.4% in January, thus raising hopes that today’s Euro Area-wide print would come in on the softer side. But the commodity rebound ultimately offset that, and the RBA’s rate hike earlier in the day further added to the sense that hikes elsewhere could eventually be back on the agenda.

Overnight in Asia, we’ve seen a mixed performance this morning. On the positive side, the KOSPI (+1.39%) is at another record high, and the Shanghai Comp (+0.01%) has eked out a modest gain. However, other indices have moved lower, including the CSI 300 (-0.05%), the Hang Seng (-0.17%) and the Nikkei (-0.83%). We’ve also started to see some of the services and composite PMIs from the region, with China’s RatingDog Services PMI up to a 3-month high of 52.3 (vs. 52.0 expected), whilst Japan’s final services PMI reached to an 11-month high of 53.7. However, the Japanese yen has continued to weaken a bit ahead of this weekend’s election, down -0.33% to 156.27 per dollar.

Looking at the day ahead, US data releases include the ISM services index for January and the ADP’s report of private payrolls for January, whilst in the Euro Area we’ll get the flash CPI print for January. Otherwise, we’ll get the final services and composite PMIs for January for the US and Europe. The US Treasury will also be releasing its quarterly refunding announcement, detailing the breakdown of planned issuance. Elsewhere, central bank speakers include the Fed’s Cook, and today’s earnings releases include Alphabet.

Authored by Michael Wilkerson via The Epoch Times,

Investors have been rightly impressed by the remarkable run of gold, which in dollar terms has doubled in price over the past year.

This performance vastly outpaces the stock markets (which are also sitting near all-time highs) and bitcoin (trading sideways to down for months), the cryptocurrency challenger touted as a “digital gold” safe-haven alternative to depreciating fiat currencies such as the U.S. dollar.

The gold euphoria should be tempered by an uncomfortable recognition.

Gold’s meteoric performance is a troubling sign that something is profoundly wrong—or at least brewing—in the global geopolitical, economic, and monetary environment.

Investors are reaching for safety at the same time that risky investments continue to rise in dollar-terms value. Central banks are accumulating and hoarding gold and reducing their U.S. dollar reserves, as all the while they prepare for economic, technologic, and kinetic war. Gold is a safe haven for individual investors so long as they can legally hold, buy, and sell it. Most of us take that as a given.

But Americans should never forget that the U.S. government, under then-President Franklin Delano Roosevelt’s (FDR’s) Executive Order 6102 (April 1933), moved with coercive force (including massive fines and threat of up to 10 years’ imprisonment) to confiscate the estimated $1.5 billion in gold coins, bullion, and certificates held by ordinary Americans. This represented about 5 percent of the money supply, equivalent to about $1.1 trillion in liquidity terms in today’s financial system.

Then, in the midst of the Great Depression and related banking crisis, the U.S. dollar was convertible into gold at an artificially low fixed rate of $20.67 per ounce. Anyone could walk into their bank and demand their paper currency be redeemed for gold. Because of the loss of confidence in the banking system, that is exactly what they were doing, as were foreign governments and banks that had a claim on gold held in the United States, draining the U.S. government and banks of their reserves.

Because the dollar was 100 percent backed by gold, and with the fixed conversion rate, the Federal Reserve couldn’t increase the money supply to help ease the credit crisis and stop the deflationary spiral the country was facing … because it didn’t hold the gold.

So FDR simply declared a national emergency, confiscated citizens’ gold for $20, and then, the next year, “presto,” simply changed the official conversion rate upward by 67 percent to $35 per ounce, enabling money supply expansion, reducing the value of the dollar in foreign currency terms, and thus supporting U.S. exports.

This was done in the context of rising geopolitical tensions, tariff wars, rumors of rearmament in Europe, competitive currency devaluations, and a scramble by governments around the world to shore up their gold reserves.

Sound familiar?

Today, we are in a similar—but also very different—geopolitical environment. What is analogous is that the nations of the world are transitioning into a “war economy.” The central banks are once again buying as much gold as they can get their hands on. Protectionism and resource nationalism are the orders of the day. Fiat currencies are on a path toward debasement, an environment in which governments deprive their citizens of purchasing power and use inflation as stealth taxation.

I’m not suggesting that the U.S. government is considering gold confiscation. I’m reminding all of us that “black swan” events happen unexpectedly and suddenly. A kinetic intervention into Iran would potentially be one such event, with economic and financial ramifications likely much greater than the restrained response to U.S. action in Venezuela. When a black swan lands, the shock waves move in patterns difficult to anticipate. In perceived national emergencies, governments reach into their bags of tricks for unprecedented solutions. This was true in 1914 (the onset of the cataclysm of World War I), in the 1930s Great Depression, in 1971 when then-President Richard Nixon “temporarily” suspended dollar convertibility into gold by foreign banks and governments to stem the outward flow of reserves (temporarily lasting 55 years), and in 2008’s global financial crisis. The long list of government interventions during this period resulted in distortions to the monetary and financial markets—and the real economy—that ripple to this day.

We are in times that are not business as usual. I continue to view gold as an important part of a financial umbrella. Over millennia, gold has proven to be real money when fiat (paper) currencies inevitably fail. But I keep one eye open to the possibility that in a national emergency, all bets are off. History shows that no action is beyond the consideration of governments attempting to extricate themselves from an apparently intractable strategic predicament.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Officials at the United Nations are pleading for relief this week after admitting that the premier globalist organization is going broke because of US cuts and changes to their budgeting rules which require them to pay back some “unspent funds”.  Unpaid dues from member states are also building.

As the Trump administration slashes support over criticism that the U.N. has failed to promote U.S. interests, the United Nations is warning it could face a cash crisis by July.  U.N. Secretary-General António Guterres warns that outstanding dues reached a record $1.568 billion at the end of 2025 and that collections covered only 76.7% of assessed contributions, leaving the organization dangerously exposed. 

Unless collections “drastically improve,” the secretary-general warned, the U.N. will not be able to fully implement its 2026 budget and could face a liquidity crisis by mid-year.

In 2024, US taxpayers funded around 25% of the United Nations core budget and peacekeeping operations, along with 40% of all humanitarian assistance.  As with the revelations surrounding institutions like USAID and NATO, when we look at the raw financial data for the UN we find that Americans have been paying for the rest of the world for quite some time and without US cash the house of cards quickly starts to fall apart.

Furthermore, taxpayer dollars have been flowing into organizations and countries that are explicitly hostile to US values and constitutional freedoms.

In January 2026, the United States formally withdrew from the World Health Organization and began exiting dozens of international bodies, including multiple U.N. entities, citing misalignment with American priorities.  The funding squeeze has already forced the United Nations to tighten spending across several agencies. Reports show that U.N. bodies, including the World Food Programme and refugee agencies, are preparing layoffs and program reductions as overall contributions fall to the lowest level in a decade.

“Either all member states honour their obligations to pay in full and on time – or member states must fundamentally overhaul our financial rules to prevent an imminent financial collapse,” Secretary-General Guterres wrote.

In his final yearly speech this month, Guterres, who will step down at the end of 2026, outlined his goals for the year, saying that the world was riven with “self-defeating geopolitical divides (and) brazen violations of international law.”  The UN chief also denounced “wholesale cuts in development and humanitarian aid”.  In other words, the UN admits it cannot survive without constant handouts from the US.  

However, Guterres never addresses the obvious problem:  Why should Americans continue to fund an international organization that is ideologically opposed to everything they stand for?  Why should they fund an organization that helped to fund and plan the third-world invasion of the US through mass immigration?  In fact, why wouldn’t most Americans cheer for the financial ruin of the UN?

Trump’s repeated threats to bomb Iran seem to have resulted in some Iranian officials abandoning ship. There have been reports of two such recent instances.

In the latest, Iran’s chargé d’affaires in Vienna, Gholamreza Derikvand, abruptly abandoned his post and is reportedly seeking asylum in Switzerland for himself and his family.

The Iranian government has not confirmed this, however, and Iran’s Foreign Ministry has simply said amid the speculation of the diplomat’s sudden absence that it is “avoiding discussing the case or claiming ignorance due to fear of intelligence agencies.”

Derikvand’s colleagues told Iran International that Derikvand was widely seen as a rising figure within Iran’s diplomatic corps and could have been promoted to ambassador had he stayed on. His résumé includes a previous stint as chargé d’affaires at Iran’s embassy in the Czech Republic from 2011 to 2014.

The story broke Tuesday in Iran International – an online news portal which has long been accused of having links to Israel’s Mossad intelligence agency. This means all initial claims should be taken in context and with a critical eye.

Israeli media itself has reviewed of the London-based outlet falling under suspicion:

Iran’s Intelligence Ministry claimed to have found a broadcast studio belonging to London-based anti-regime outlet Iran International in Tel Aviv, Iranian media reported this week.

The ministry also claimed to have identified “a number of individuals working at, or with,” the outlet, as well as their alleged residences.

…Iran International is designated as a “terrorist broadcaster” by Tehran, which alleges that it works alongside Mossad to “destabilize” the Islamic Republic.

But as for an Iranian top-level diplomat defecting while the Islamic Republic faces massive US political and even military pressure – this makes sense and there is precedent, also on the heels of last month’s deadly protests in Iran where thousands died.

A prior alleged defection surfaced in headlines just last month, as Newsmax recalls:

The report follows another recent case in Switzerland involving an Iranian diplomat assigned to the United Nations’ European headquarters in Geneva.

On Jan. 18, Iran International reported that Alireza Jeyrani Hokmabad, described as a senior official and deputy head of Iran’s mission to U.N. agencies in Geneva, left his workplace and applied for asylum with his family.

If this becomes a trend, it would be highly embarrassing for the Iranian government and its diplomatic corps. This alone gives motive for Tehran wanting to keep it quiet, and so will probably hold off commenting.

Authored by Steve Watson via Modernity.news,

The British countryside is under siege from diversity mandates that aim to transform it into a “less white environment,” with officials in areas of natural beauty like the Chilterns and Cotswolds pledging to draw in more ethnic minorities under Department for Environment, Food & Rural Affairs (Defra) guidance.

This push stems from reports warning that rural spaces risk becoming “irrelevant” in a multicultural society, dominated by the “white middle class,” prompting commitments to outreach, diverse staffing, and even dog control measures to make the outdoors more appealing.

The Telegraph reports that National Landscapes—formerly Areas of Outstanding Natural Beauty (AONB)—and local councils have adopted diversity targets following Defra-commissioned studies.

?LABOUR LAUNCHES PLAN TO MAKE THE COUNTRYSIDE ‘MORE DIVERSE’

Country pubs are TOO WHITE according to the latest report and now they want to ‘fix’ this problem.

It isn’t a problem
It never was
These people are obsessed with replacing white brits pic.twitter.com/lhZj2fiPia

— Basil the Great (@BasilTheGreat) February 2, 2026

In the Chilterns, proposals include community outreach to attract Muslims from nearby Luton, recruiting diverse staff, and producing marketing materials featuring ethnic minorities in “community languages.”

Research cited suggests tighter dog controls, as some groups fear them.

“Diversity drive to make Britain’s countryside ‘less white’”

This is just racist.
https://t.co/qQBnZAM2Zr

— Steven Barrett (@SBarrettBar) February 2, 2026

Malvern Hills National Landscape stated: “Many minority peoples have no connection to nature in the UK because their parents and their grandparents did not feel safe enough to take them or had other survival preoccupations.”

It added: “While most white English users value the solitude and contemplative activities which the countryside affords, the tendency for ethnic minority people is to prefer social company (family, friends, schools).”

The area plans to “develop strategies to reach people or communities with protected characteristics such as people without English as a first language”.

Diversity drive to make Britain’s countryside more welcoming to minorities after report found it was ‘too white’ and ‘middle class’ https://t.co/FfVPtwIaT9

— Daily Mail (@DailyMail) February 2, 2026

Nidderdale in North Yorkshire warns of barriers for ethnic minorities, including “concerns about how they will be received when visiting an unfamiliar place”, and vows to “develop more inclusive information to reflect more diverse cultural interpretation of the countryside”.

Cranborne Chase will also target “people or communities with protected characteristics such as people without English as a first language”.

Surrey Hills notes “some demographics are still under-represented in our countryside”, while Suffolk and Essex Coast Heaths expresses concerns about “some sections of society that are under-represented when looking at the composition of visitors”.

Dedham Vale pledges to “identify and seek to address barriers facing under-represented and/or diverse groups which limit equal access to the Dedham Vale National Landscape”.

These efforts trace back to a 2019 Defra report by Julian Glover, which claimed: “We are all paying for national landscapes through our taxes, and yet sometimes on our visits it has felt as if National Parks are an exclusive, mainly white, mainly middle?class club.”

Oh no, how awful, in a country where over 80% of the population is white.

It warned: “Many communities in modern Britain feel that these landscapes hold no relevance for them. The countryside is seen by both black, Asian and minority ethnic groups and white people as very much a ‘white’ environment.

“If that is true today, then the divide is only going to widen as society changes. Our countryside will end up being irrelevant to the country that actually exists,” the report continued, adding that a key proposal is “New long?term programmes to increase the ethnic diversity of visitors.”

The government responded by committing to “expand community engagement including with reference to increasing the ethnic and socioeconomic diversity of visitors”.

A 2022 Defra report, costing £108,000 found “perceptions of protected landscapes as being for white people and middle-class people could be a powerful barrier for first-generation immigrants”.

It noted ethnic minorities associate visiting with “white culture” and see “the English countryside as a white space, to which they did not belong”.

Concerns included rural facilities catering to “white English culture”, such as “traditional’ pubs, which have limited food options and cater to people who have a drinking culture. Accordingly, Muslims from the Pakistani and Bangladeshi group said this contributed to a feeling of being unwelcome.”

The Cotswolds plan references this, aiming to review provisions for the “widest possible demographic”.

This insane DEI drive echoes earlier claims we covered, where wildlife charities like the RSPCA, WWF, and National Trust labeled the countryside “racist” because it’s dominated by “white British cultural values” and influenced by “racist colonial legacies”.

Wildlife and Countryside Link, a charity umbrella group whose members include the RSPCA, WWF and National Trust, made the claim in evidence provided to Parliament on racism and its influence on the natural world.

The country’s green spaces are “dominated by white people” and are influenced by “racist colonial legacies” that are frightening away ethnic minorities from visiting them, the report claims.

Non-whites cannot ‘enjoy the outdoors’ because of the perception that the countryside is a “white space,” it adds.

“Cultural barriers reflect that in the UK, it is White British cultural values that have been embedded into the design and management of green spaces, and into society’s expectations of how people should be engaging with them,” states the report.

As we highlighted, such groups demanded the government create “legally binding target for access to nature” in order to address “structural racism”.

The Muslim Hikers group has also claimed that rural areas are seen as unwelcoming to minority communities, with the people who live there seemingly wanting to avoid the issues that “minority communities” bring with them.

These DEI initiatives coincide with a surge in rural degradation from fly-tipping, turning protected sites into wastelands.

We previously reported on 20 tonnes of rubbish dumped in Dorset’s Holt Heath nature reserve, blighting a Site of Special Scientific Interest and threatening wildlife.

Similarly, a Welsh mountain in Treorchy became a “stream of rubbish visible for miles,” devastating farmer Katie Davies’ land and endangering her sheep.

Davies called it “devastating” and “horrendous,” stressing the need for a “long-term solution”.

These incidents reveal how imported chaos and lax enforcement are eroding Britain’s rural heritage, now compounded by forced diversity schemes that risk further alienating natives while importing urban issues to green havens.

As mass migration reshapes society, preserving the countryside’s traditional appeal—without mandates that dilute its cultural roots—remains essential to keeping Britain’s landscapes relevant and intact for all who respect them.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Saif al-Islam Gaddafi, the the most prominent son of Libya’s late long-time ruler, has died, according to his family on Tuesday. His adviser, Abdallah Othman Abdurrahim, also confirmed his death but without giving details. “Seif al-Islam has fallen as a martyr,” his cousin, Hamid Kadhafi, has told Libyan TV. Emerging reports point to what appears an assassination.

Four unidentified men reportedly entered his property and shot him in a garden execution-style. “Four armed men stormed the residence of Seif al-Islam Kadhafi after disabling surveillance cameras, then executed him,” according to a statement. There have long been reports and rumors that he was attempting a return to national politics after previously being barred from any top office.

The killing took place in Zintan, in northwestern Libya – though he had long kept himself hidden from public view amid Libya’s fractured politics and current state of internecine civil war. He’s said to have been based in Zintan for much of the last decade.

Despite never holding an official post, the younger Gaddafi effectively served as his father’s number two from 2000 until 2011, operating as a key power broker inside Libya until Muammar Gaddafi was overthrown and killed by by NATO-backed Islamist ‘rebels’ – bringing an end to decades of stable rule.

It was on October 20th 2011 that Col. Gaddafi was dragged from a drain pipe outside his hometown of Sirte, tortured and killed. He was sodomized with a bayonet, before being shot – with much of the brutal death captured on grainy cell phone footage. Western officials celebrated the war crime and summary execution.

His son Saif was captured in 2011 while attempting to flee the country and was subsequently imprisoned in Zintan. He remained in detention for years before being released in 2017 under a general amnesty, and quietly returned to living in Libya, but at times was in and out of the news, also as competing powers vied to form a new government.

Al Jazeera reviews of Saif’s life and background:

A Western-educated and well-spoken man, Gaddafi presented a progressive face to the oppressive Libyan regime run by his father – and he played a leading role in a drive to repair Libya’s relations with the West, beginning in the early 2000s.

He received a PhD from the London School of Economics (LSE) in 2008, with his dissertation looking into the role of civil society in reforming global governance.

Gaddafi remained prominent throughout the violence that gripped the country in the wake of the Arab Spring.

Speaking to the Reuters news agency at the time of the popular uprising in Libya in 2011, he said: “We fight here in Libya, we die here in Libya.”

The same report features quotes from Saif which seem spot on, referring to the US-led NATO war under then Preisent Obama and Secretary of State Hillary Clinton:

He warned that rivers of blood would flow and the government would fight to the last man and woman and bullet.

“All of Libya will be destroyed. We will need 40 years to reach an agreement on how to run the country, because today, everyone will want to be president, or emir, and everybody will want to run the country,” he said.

Was this hit an act of anti-Gaddafi revenge? Were there fears of Saif’s growing popularity in Libya? Since the Gaddafi government overthrow, Libya has remained divided into at least two major rival governments, reflecting also a geographical East-West divide.

“America is the reason for chaos in Libya”…

a Libyan who bought into US-NATO-Israeli-Saudi-UAE propaganda and took up arms against Ghaddafi thinking he was actually fighting for freedom, democracy and “true Islam”, reflects on what he did after his fall: “If Ghaddafi were alive now, I would fight for him.” Syria soon. pic.twitter.com/zgNhRaesf3

— ☀️👀 (@zei_squirrel) December 7, 2024

At times there have existed even three or up to four governments in sectors of the country, largely commanded by warlords – and yet the media has largely forgotten ‘Obama’s war’.

Submitted by Thomas Kolbe

The German Bundesbank hoards the second-largest gold reserves among central banks. The precious metal serves as an insurance policy for both states and private individuals. Its massive price surge shows that the dice have already been cast: governments will attempt to inflate their debts.

Anyone acquiring precious metals in these weeks simultaneously casts a verdict on their currency. This may be a conscious portfolio decision or simply an undefined desire to have a monetary insurance policy at hand. One never knows what the future holds.

Gold jewelry or collectible silver coins are aesthetically appealing and trigger our instinct to collect. What private purchases and the massive hoarding of gold by central banks share is their monetary-policy background.

In honest moments, looking at the soaring global sovereign debts and escalating geopolitical conflicts, we know that our monetary system is heading for severe turbulence. In many places, the fiscal Rubicon has long been crossed. With debt-to-GDP ratios well above 100 percent—in the U.S., China, and numerous European countries—only a massive expansion of the money supply can ensure the public sector’s ability to pay.

Bundesbank Holds Massive Gold Reserves

This occurs at the expense of those trusting in cash. In this context, it is noteworthy that the German Bundesbank hoards the second-largest gold reserves among global central banks.

3,350 tons of gold, with a market value of roughly half a trillion euros, are split between the Bundesbank’s vaults in Frankfurt (50 percent), the New York Federal Reserve (37 percent), and a storage facility in the City of London (13 percent). It is an inheritance from the old Bretton Woods system, when gold was stored near major global trade hubs.

The time is drawing closer to bring the reserves stored abroad back home. In a fragile monetary system, precaution is not alarmism—it is pure self-protection.

Italian Prime Minister Giorgia Meloni must have thought the same. She is working under intense pressure to formally transfer the Italian central bank’s gold reserves to the state—a step equivalent to an open vote of no confidence against the European Central Bank. 

Italy holds 2,452 tons of gold, ranking third internationally behind the U.S. and Germany, giving it, like Germany, a bargaining chip to restart its own currency should a severe euro crisis ever occur.

From the Frankfurt ECB Tower, these developments are viewed with the utmost concern. Nothing corrodes a monetary system faster and more effectively than a loss of confidence in creditworthiness. The banking system, as well as pension funds and retirement insurance, rely on the stability of government bonds recorded on their balance sheets.

Once it became clear that states could no longer consolidate fiscally, the bond market corrected sharply. Billions in losses are on the books, only not written off due to special valuation rules granted by lawmakers.

From the ECB’s perspective, the hoarding of national gold reveals dangerous secession tendencies. It still holds around 500 tons of gold from the early days of the monetary union, when member states contributed gold reserves proportionally to their GDP to support the euro. This is far from sufficient to provide the euro with a stable, metal-backed anchor after decades of money growth.

The repeated desire of ECB President Christine Lagarde to centralize national gold reserves at the ECB vault is almost universally rejected by eurozone members. So much for the repeatedly touted integration of the euro system.

Gold as a Global Trust Anchor

Elsewhere, gold has also become central to stabilizing trust. The BRICS nations have for years worked on creating a payment system independent of SWIFT but have failed so far because no one trusts the Asian hegemon, China.

The solution—the pegging of mutual transfers to gold—was adopted by China during the global financial crisis more than fifteen years ago, when it became the largest buyer in the precious metals market. With roughly 2,300 tons, China now holds the fourth-largest gold reserves in the world.

Besides China, Russia, Turkey, India, and Poland, as well as countries like Egypt and Thailand, have significantly increased their gold holdings since 2008. The price increase is therefore justified and likely to continue in the long term, albeit with growing volatility. 

A positive side effect of this reevaluation is a kind of balance-sheet repair. The deep gaps created by the bond market crisis are closed by the appreciation of gold for those who recognized the approaching sovereign debt danger early.

In Germany’s Bundesbank, gold now represents roughly 80 percent of the entire balance sheet. There is thus motivation in many places to continue boosting the gold price. It is an elegant way to stabilize the monetary system while simultaneously repairing past damages across different institutional levels through a simple repricing.

States Strive for a Gold Monopoly

It is almost a historical irony. When U.S. President Richard Nixon terminated the dollar’s convertibility into gold in 1971 amid soaring debt and massive inflation of liabilities, the so-called fiat credit money system was set in motion. Debts exploded, and states could borrow nearly without limit.

Unbacked credit, combined with ever-lowering reserve requirements, created a perfect Ponzi system, which has now entered its crisis stage.

German policymakers tried to escape this debt spiral by enshrining the so-called debt brake a few years ago. Yet the corrosive erosion of this fiscal constraint began immediately afterward and was ultimately buried last year by Chancellor Friedrich Merz and his high-stakes special fund gamble.

With this policy of unlimited state credit, citizens are driven toward safe havens such as precious metals, accelerating the decline of the fiat credit money system.

The relationship of states to gold remains ambivalent. Aside from committed fiat regimes like Canada, which holds no gold at all, it is becoming increasingly clear that gold can either extend the Ponzi scheme or initiate a new monetary system.

However, citizens fleeing into the safe haven of precious metals become potentially dangerous antagonists, prompting an immediate political counterreaction. Gold purchases are recorded, limited, and legislated in ways clearly designed to capture future portfolio gains.

The Netherlands, for example, is expected to begin taxing unrealized capital gains in 2028—a clear warning.

A general, sharp appreciation of precious metals could create tens of thousands of capital-strong, independent families, particularly in Europe. It is precisely this independence that vexes the etatists in Brussels and EU capitals. The fiscal effect of harvesting book gains in the private sector also plays a role, given runaway sovereign debt.

The ambivalence of gold—and this applies to precious metals as well as other assets without counterparty risk, such as Bitcoin—inevitably provokes massive repression in political regimes focused on citizen control.

Expect other European states soon to follow the Netherlands’ example. The fight for sovereignty has begun.

* * * 

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.

NATO Secretary General Mark Rutte said the so-called “coalition of the willing” will deploy forces across Ukraine – on land, at sea, and in the air – once a peace agreement with Russia is signed, making clear that Western boots, jets, and naval assets would follow any ceasefire.

Rutte said Ukraine needs binding commitments and security guarantees in order to prevent future Russian aggression. This is to include the deployment of European forces and a “crucial” US “backstop“. His words are consistent with the Western position – and specifically the European view – on what a final Ukraine peace deal would require.

The Kremlin has as expected consistently rejected this ‘option’ as a non-starter, given this is why Russia went to war in the first place: to stop a NATO troop outpost right on its border, and constant NATO expansion.

What Moscow will find doubly alarming is that Rutte issued the words directly before Ukraine’s Verkhovna Rada (the unicameral parliament of Ukraine). Other NATO states, Rutte laid out, would continue to assist through additional channels in a support role to Western boots on the ground.

But Russia has again warned that foreign boots on the ground in Ukraine would warrant a military response, and that they could be targets for future Russian action. All of this contradicts Russia’s ‘red lines’ for what it says is acceptable.

Foreign Minister Sergey Lavrov has been even more blunt, stating that security guarantees for Ukraine based on “foreign military intervention on some part of Ukrainian territory” would be unacceptable to the level that a post-war “peacekeeping” mission would fast spiraling into the next flashpoint.

According to more of Rutte’s words, summarized via The Guardian:

• Rutte also urged for more equal “burden-sharing” as some allies “are doing a lot” and a few are “doing nothing”. He stressed the positive contributions of countries including Norway, Holland, Germany, Denmark, Canada and Sweden.

• Rutte said Russia’s full-scale invasion, launched in February 2022, was “crazy” and said its continuing assault on Ukraine is targeting civilian infrastructure, creating “chaos” for innocent civilians.

• Rutte said Ukraine is ready “to play ball” and come to a deal – acceptable to Kyiv – with the Russian side, but added that the massive Russian attack last night was a “really bad signal” ahead of future negotiations.

Yet, Russia will not “play ball” on these terms, and this signals that US-Russia negotiations continue to be stuck, going nowhere substantial, but the reality remains – at least the two sides are being candid and are communicating.

A ‘helping-hand’ or ensuring Ukraine’s long demise…

Mark Rutte in the Verkhovna Rada:

“Winter is very long, but spring will come. Stay strong. Glory to Ukraine!”

Standing ovations.

Well, no one expected such unprecedented support.
There it is — the real helping hand from our partners!

If you didn’t believe it before, just look… pic.twitter.com/YK0QWQoSON

— Marta Havryshko (@HavryshkoMarta) February 3, 2026

This represents Europe keeping up its intractable position, also as territorial concessions are a prime point of disagreement. US officials have at times signaled their view that European leaders are more hostile to peace, or even thwarting it, amid Trump’s apparent good-faith efforts to bring a resolution to the war which is about to enter its fifth year, after hundreds of thousands have perished. Still, Trump could bring pressure on Kiev – including halting all arms deliveries, and forcing it to make serious land concessions – but there’s as yet no evidence he’s done this in any meaningful way.