Following last week’s plunge back below 200k, analysts expected a small rise to 209k this week but the number of Americans filing for jobless benefits for the first time remained flat at 200k. Notably, as is usual at this time of year, non-seasonally-adjusted claims spiked…

Source: Bloomberg

…basically hovering at its lowest levels since 1969…

Source: Bloomberg

New York and Georgia saw the largest drops in jobless claims while Puerto Rico saw a modest increase in claims…

Continuing jobless claims also ticked down (to 1.849 million Americans) – the lowest since November…

Source: Bloomberg

All of which fits with the ebbing of rate-cut expectations for this year…

Source: Bloomberg

…likely much to the chagrin of President Trump.

US equity futures and global stocks are sharply higher as the S&P again marches toward a new ATH while the latest vol spike subsides, after Trump’s tariff pivot eased geopolitical fears, though Greenland and other flashpoints mean the optimistic mood is laced with some caution. As of 8:00am ET, S&P 500 futures rose 0.5% after the benchmark’s biggest advance since November as a relief rally over President Donald Trump’s pivot on Greenland continued, with a flurry of activity in the artificial-intelligence space adding support to tech stocks: Nasdaq 100 futures climbed 0.8% as names linked to the build-out of AI-infrastructure outperformed in premarket trading, while all Mag 7 members advanced in premarket trading with Fins/Industrials also standout performers as Staples are mostly lower. The 10-year is flat 4.24%, dollar similar DYX $99 and Bitcoin same place as yesterday $89.8k. Commodities are mixed: nat gas surges for a third day of follow through up 14% prompt to $5.56 – highest level since late 2022 – on bruising cold across the US, while crude, copper, gold all taking a breather this morning as WTI may fall below $60/bbl. Today’s macro data gives an update on Q3 metrics, November spending / PCE, and new jobless claims. 

In premarket trading, Mag 7 stocks are rallying alongside index futures (Alphabet +2%, Tesla +1%, Microsoft +0.8%, Amazon +1%, Nvidia +0.9%, Apple +0.5%, Meta +1.9%)

• Venture Global Inc. (VG) is up 10% after the company won a dispute with Spain’s Repsol SA involving the sale of liquefied natural gas shipments from its export plant in Louisiana.
• Abbott (ABT) falls 4% after posting fourth quarter results.
• Axogen (AXGN) is down 7% after the health care firm said it will offer $85 million of shares of its common stock.
• Knight-Swift (KNX) falls 2% after the freight transportation company posted fourth quarter earnings that fell short of expectations.
• Mobileye (MBLY) drops 6% after the maker of software and hardware technology for automobiles provided revenue guidance for 2026 missed the average analyst estimate.
• Procter & Gamble Co. (PG) slips 1.6% as growth in a key sales metric stagnated in the latest quarter while volume slipped, showing that US consumers spent cautiously in the final months of the year.
• Rocket Lab (RKLB) falls 2% after the company said qualification testing of the Stage 1 tank resulted in a rupture during a hydrostatic pressure trial.
• Sphere Entertainment (SPHR) rises 3% as BTIG upgrades the live entertainment and media company to buy, citing multiple catalysts driving the stock’s upside potential.

In corporate news, Lululemon’s founder lashed out over the company’s latest product flop, calling it a “total operational failure” that he blamed on the company’s board of directors. GameStop CEO disclosed the purchase of 500,000 shares of the gaming retailer, sending the stock higher in premarket trading. 

The rebound in stocks followed Trump’s announcement of a framework agreement with NATO to end a days-long standoff over Greenland. The rally gained momentum on Thursday as NATO’s chief said the breakthrough didn’t involve discussion of the territory’s sovereignty, easing concerns over a key sticking point, focusing rather on the broader issue of security. 

This week’s events have rewarded TACO trade dip buyers, while also serving as a reminder that volatility is never far away. Fundamentals for 2026 still look excellent, according to Tikehau Capital’s Raphael Thuin. There’s “a rare alignment of stars” going on, with double-digit earnings expected, good economic growth and possible rate cuts.

“Despite a very positive market narrative about 2026, geopolitical crisis and US tariffs can fuel volatility spikes at any time,” said Raphael Thuin, head of capital markets strategies at Tikehau Capital in Paris. “The fast-changing AI industry, like last year, also represents both a big upward potential as much as a potential downward risk.”

Sentiment was also lifted after Japanese bonds rebounded for a second straight session.

Small-cap stocks look set to continue their strong run after outperforming the S&P 500 for 13 straight sessions, with contracts on the Russell 2000 broadly tracking those on the S&P 500 on Thursday.

Meanwhile, the AI narrative is back, with Asian chip stocks surging after Wednesday’s bullish comments on AI spending from Nvidia’s Jensen Huang. The theme is getting more juice from news that Anthropic’s revenue run rate is said to have more than doubled since last summer.  News that Alibaba Group Holding Ltd. is preparing to list its chipmaking arm added to a series of upbeat moves in tech after bullish comments from Nvidia Corp. Details emerged that Anthropic PBC’s revenue run rate has more than doubled since last summer, while OpenAI was locked in talks about a fresh funding round at a marked-up valuation. 

In geopolitics, NATO’s chief said a breakthrough over Greenland was secured without discussing the territory’s sovereignty with Trump, focusing rather on the broader issue of security. Ukraine’s Zelenskiy arrived in Davos to meet with Trump. Speakers at the event today include Elon Musk and Larry Fink. Amid renewed speculation that foreigners may sell US assets, JPMorgan strategists said there’s been little sign of foreign investors shunning US assets amid the Greenland tensions. 

In other assets, Goldman raised its December 2026 gold price forecast by more than 10% to $5,400 an ounce, on the assumption that investors who bought gold as a hedge will maintain positions. Global natural gas prices continue to soar amid freezing weather. A sweeping crypto market bill is likely to be delayed by several weeks as key lawmakers shift their focus to potential housing legislation in support of Trump’s affordability push. 

Out of the 52 S&P 500 companies that have reported so far in the earnings season, 83% have managed to beat analyst forecasts, while 12% have missed. 

PCE data for October and November will likely corroborate evidence that tariff pass-through is fading. That could support the case for rate cuts later in the year. Trump suggested that’s he’s down to just one choice for next Fed chair, and said Rick Rieder and Kevin Warsh are good options.

In Europe, the Stoxx 600 is up 0.9% after four days of declines, with telecoms, construction and auto sectors leading the gains.  Here are the biggest movers Thursday:

• Orsted rallied as much as 5.5% after Oddo BHF upgraded to outperform from neutral, citing a “structural change of regime at the Danish offshore wind developer
• Volkswagen shares rise as much as 6.1% after the German carmaker delivered a positive surprise on free cash flow in its automotive division, driven by improvements in working capital and lower investment spend
• AB Foods climbs as much as 1.5% after the conglomerate reported first-quarter constant currency sales which Shore Capital analyst Clive Black (hold) said were “a bit better” than the group guided for earlier this month
• Aryzta shares jump as much as 14%, the most in more than three years, as analysts see the Swiss baker’s 2025 performance and outlook for the coming year as a first step to regain investor trust
• Baltic Classifieds Group shares rise as much as 6.9% after Morgan Stanley initiates the online classifieds company at overweight, citing its regional leadership position across verticals and a favorable macro backdrop
• Basic resources is the worst-performing sector in Europe on Thursday after copper declined to its lowest intraday level in almost two weeks, weighing on miners
• Essity drops as much as 5.3%, with a miss on sales overshadowing an adjusted Ebita beat by the Swedish personal care products producer
• Bankinter shares decline as much as 2.9%, the only lender declining on the Stoxx 600 Banks Index, after the Spanish bank reported earnings in line with analysts expectations
• Wickes shares climb as much as 2.2% after the home improvement products retailer reported “solid” second-half results, with analysts encouraged by evidence of market share gains

Earlier in the session, Asian stocks advanced, poised to snap a three-day losing streak, after US President Donald Trump retreated from his tariff threat on European nations and investors returned to tech stocks. The MSCI Asia Pacific Index gained 0.7%, boosted by tech shares — including TSMC and Samsung Electronics — after Nvidia CEO Jensen Huang’s comment about AI spending fueled optimism for the sector. South Korea’s stock benchmark Kospi briefly crossed the 5,000-level, a threshold targeted by the country’s president during his campaign last year.

In FX we saw muted moves with the dollar little changed.  The pound was little changed.

In rates, treasuries are little changed, lagging most European bond markets but outperforming gilts, hit by potential UK leadership challenge to Prime Minister Starmer. Focal points of US session include weekly jobless claims and November personal income and spending data — which embeds PCE price indexes — and $21 billion 10-year TIPS auction.  US 10-year yield near 4.24% is within 1bp of Wednesday’s closing level with UK counterpart about 2bp cheaper on the day and Germany’s richer by about 1.5bp. Gilts underperformed European peers after a pathway for a potential leadership challenge against Prime Minister Keir Starmer emerged. 

In commodities, gold erases an earlier decline, trading little changed around $4,830/oz. Oil prices falling, with Brent slipping toward $64/barrel and extending after Trump comments on potential talks with Iran. Gas surged 14% to $5.56, its third day of gains, on freezing cold.

US economic calendar includes third estimate of 3Q GDP and jobless claims (8:30am), November personal income and spending (10am) and January Kansas City Fed manufacturing activity (11am)

Market Wrap

• S&P 500 mini +0.6%
• Nasdaq 100 mini +0.8%
• Russell 2000 mini +0.5%
• Stoxx Europe 600 +1.3%
• DAX +1.4%
• CAC 40 +1.3%
• 10-year Treasury yield little changed at 4.24%
• VIX -0.8 points at 16.07
• Bloomberg Dollar Index little changed at 1205.89
• euro little changed at $1.1687
• WTI crude -1.1% at $59.93/barrel

Top Overnight News

• NATO Secretary General Mark Rutte said Greenland’s sovereignty wasn’t discussed with Trump but that talks centered on Arctic security in a “practical sense.” BBG
• Emboldened by the U.S. ouster of Venezuelan President Nicolás Maduro, the Trump administration is searching for Cuban government insiders who can help cut a deal to push out the Communist regime by the end of the year. WSJ
• US House GOP leaders are struggling to strike a deal with Republican hard-liners tonight that would allow the final government funding package to advance. “The Rules Committee recessed Wednesday evening without a solution. Senior Rs hope to reconvene the panel by 9 pm”: Politico
• Volodymyr Zelenskiy is traveling to Davos to meet with Trump, a person familiar said. US envoys Steve Witkoff and Jared Kushner will go to Russia for talks with Vladimir Putin. BBG
• It took just $280 million of trading to push Japan’s government bond market into meltdown, with a $41 billion wipeout across the Japanese curve. The disconnect between the size of the wipeout and the amount that actually traded shows how Japan’s sometimes illiquid bond market has become a weak spot in the global financial system. BBG
• For the first time since the start of the private-credit boom, large numbers of individual investors are trying to get their money out. Several of the biggest funds eligible to wealthy individuals received requests from about 5% of shareholders to cash out at the end of last year, well above the normal volume, according to SEC filings. WSJ
• South Korea isn’t delaying the first $20 billion tranche of its US investment pledge, Finance Minister Koo Yun Cheol said. Project selection is ongoing, making execution unlikely in the first half. BBG
• Japan’s exports rose a less-than-expected 5.1% in December. South Korea’s economy unexpectedly shrank last quarter. The Malaysian central bank kept its policy rate at 2.75% as expected. BBG
• US natural gas surged to the highest since 2022, jumping more than 70% in three days as brutal cold lifts demand amid short covering. A storm is set to hit starting tomorrow, plunging Texas into a deep freeze that may also disrupt production. BBG
• The Fed will finally get core PCE data for October and November today. Both headline and core inflation are expected to rise year on year, but the monthly figures will probably indicate that tariff pass-through is fading. BBG

Trade/Tariffs

• Switzerland’s Parmelin via X said he had a very constructive talks with USTR Greer.
• UK Business Secretary Kyle said the European customs unions is not currently on the radar of the UK government.
• China’s Commerce Ministry said China is concerned with the EU excluding some of Chinese tech suppliers.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded entirely in the green, tracking the rebound on Wall Street after President Trump withdrew plans for additional tariffs on EU countries. ASX 200 opened around +0.8%, lifted by the improved global tone after US tariff removal, though the index later dipped following a hotter-than-expected Australian jobs report. Nikkei 225 posted firm gains of nearly 2%, snapping a five-day losing streak as chipmakers and financials advanced and JGBs stabilised. Hang Seng and Shanghai Comp the laggards, despite a brief recovery tech and easing trade-tension concerns after the US rollback of tariffs.

Top Asian News

• Australia’s Nationals Leader said coalition can no longer continue.

European equities (STOXX 600 +1.3%) are firmer across the board. Sentiment has tracked tailwinds from APAC and Wall St which traded higher after market sentiment was kept at ease following Trump’s Davos speech where he vowed to not use military action against NATO allies and later withdrew tariff plans on some European countries. European sectors are all in the green. Autos takes the top spot, boosted by gains in Volkswagen (+5%) and Michelin (+3.3%) after providing positive trading updates.

Top European News

• German Chancellor Merz said there needs to be significant defence investment.

FX

• DXY is currently flat and trades within a narrow 98.72 to 98.82 range; the low for the day coincides with its 200 DMA. Some further pressure in the index could see the test of its 100 DMA (98.69).
• Focus this morning has been solely on US President Trump, who provided updates on both Greenland and the Fed. Starting with the former, Trump mentioned that he had a very productive meeting with NATO’s Rutte, and they have formed a framework for a future deal. Notably, Trump announced that the scheduled tariffs on eight European countries would not go ahead – leading to a familiar “TACO” trade to take place across markets. Elsewhere, on the Fed, Trump said he would like to keep NEC Director Hassett when he is, and now has two or three left in mind for the Chair role. This follows familiar commentary from last Friday, which spurred some strength in the Dollar as markets come to terms with a potentially less dovish appointment; Polymarket odds show Warsh (44%) as the favourite, Rieder (31%) and then Waller (14%).
• G10s are broadly firmer against the Dollar; Antipodeans lead with clear outperformance in the AUD after a hotter-than-expected jobs report. Elsewhere, the JPY is the G10 underperformer this morning, and trades within a 158.17 to 158.89 range; high for the day marks a WTD peak, though still shy of its YTD high at 159.45. Overnight pressure in the JPY was attributed to December exports/trade balance missing expectations. Since, the JPY was mildly strengthened on reports that Japan now forecasts the primary balance to be in a deficit (prev. forecast surplus) in FY26. At face value, a negative, but perhaps given the relatively small deficit amount, eases recent fiscal-related fears.
• Finally, Norges Bank kept rates steady at its January meeting and largely reiterated the commentary/guidance from the December confab. As such, there was little reaction in EUR/NOK.

Fixed Income

• A relatively contained start for fixed income after a tumultuous first few sessions of the week.
• As it stands, the complex is awaiting geopolitical updates from the numerous meetings and briefings scheduled for today, the first of which is due now at the Peace Board signing with President Trump. From these, we look for clarity that the TACO narrative around Greenland is correct, and if the reporting around a deal like the one the UK has with Cyprus is correct.
• For fixed, this leaves USTs and Bunds firmer with gains of three and 13 ticks respectively. Just eclipsing Wednesday’s 111-22 best for USTs, while Bunds have a little way to go to first recoup the 128.00 figure and then get to Wednesday’s 128.25 high.
• Gilts outperform, on the back of a smaller-than-expected level of UK borrowing in December. The latest PSNB figure of GBP 11.6bln was around GBP 2.5bln below consensus. Despite the elevated level and still precarious state of UK finances, the December print has been enough to lift Gilts by 39 ticks at best to a 92.12 peak, eclipsing Wednesday’s 92.04 best but still shy of the 92.51 WTD peak from Monday.

Commodities

• Crude is on the backfoot, as the TACO trade takes the sting out of a near-term escalation on Greenland. However, we still wait to see details on how the deal will be done and exactly what the US will walk away with and demand; initial reporting suggests it will be similar to the UK-Cyprus arrangement. Further pressure also stemming from the Private inventory report, which posted a larger-than-expected headline crude build. WTI and Brent down to USD 60/bbl and USD 64.57/bbl, lower by c. USD 0.60/bbl.
• European gas is on the back foot, lower by around a EUR/MWh for Dutch TTF. However, this comes after the benchmark extended to a EUR 41.92/MWh peak early doors, a move driven by US NatGas settling higher by some 25% on Wednesday, alongside continued focus on the European & APAC cold spell.
• Spot gold has been tarnished by the removal of near-term risk premia by Trump’s tariff U-turn. However, the numerous geopolitical meetings and opportunities for commentary today mean a return of premia is a real possibility. As it stands, XAU is holding at USD 4822/oz, having recovered from the USD 4772/oz overnight low but pushed lower once again in recent trade after the PBoC commentary that they will be increasing their supervision of the gold market.
• US Energy Secretary Wright said global oil production would need to more than double to meet rising demand and prevent energy poverty.
• US President Trump is reportedly personally controlling the release of funds generated from Venezuela’s oil, Semafor reported citing an official.
• PBoC to reportedly strengthen supervision of the gold market, via Xinhua.
• Japanese copper smelters reportedly remain in discussions over charges for 2026 with miners.
• China’s UBS SDIC silver futures fund will be suspended form market open until 10:30 am local time (2:30am GM) on the 23rd January.
• MMG (1208 HK) reported Q4 copper production of 108.6k/T of output, -7% Y/Y.
• Goldman Sachs raises its year-end gold price target to USD 5,400/oz (prev. USD 4,900/oz).
• US Private Inventory Data (bbls): Crude +3.0mln (exp. +1.8mln), Distillate -0.03mln (exp. -0.2mln), Gasoline +6.2mln (exp. +2.5mln), Cushing +1.2mln.

Geopolitics: Ukraine

• Russia’s Kremlin said meeting between US envoy Witkoff and Russian President Putin will be after 7-8pm Moscow time.
• US President Trump and Ukrainian President Zelensky are set to meet at 12:00 GMT, via a Spokesman.
• US envoy Witkoff said a lot of progress has been made on Ukraine, getting to the end. Believes tariff free zone would be a gamechanger.
• Ukraine’s top negotiator Umerov said he met with US envoys Witkoff and Kushner, discussed security guarantees and post-war reconstruction.

Geopolitics: Middle East

• A Palestinian source said there is an understanding between Hamas and the US administration that the organization will hand over its weapons and tunnel maps in exchange for recognition as a political organisation, via Sky news.
• US ambassador said all options are on the table [on Iran] and President Trump will keep his promise.
• Israeli military source quoted by local press: “The US military is mobilizing large capabilities in the region in preparation for the possibility of a large-scale confrontation with Iran”, Sky News Arabia reported. “Concern in Tel Aviv that Washington will strike Iran hard at first and then withdraw its forces quickly and leave Israel facing a new reality on the ground”. “Tel Aviv doubts the ability of the United States to find a real alternative to the Iranian regime in the event of its overthrow”.

Geopolitics: Others

• The Trump administration is actively seeking regime change in Cuba by the end of 2026, the WSJ reported citing sources; the administration assess Cuba’s economy as weak following the capture of Venezuela’s Maduro.
• The proposal by NATO’s Rutte does not include the transfer of overall sovereignty, Axios reported citing sources; the plan includes the increase of security in Greenland and NATO activity in the Arctic.
• NATO’s Secretary General Rutte said the issue of Greenland remaining with Denmark did not come up in his conversation with President Trump.
• NATO’s Rutte said there is still a lot of work to be done for the Greenland deal, AFP reported.
• US President Trump’s deal for Greenland is said to involve small pockets of land, according to NYT.
• Greenland deal is reportedly to involve small pockets of land, the NYT reported.
• German Finance Minister, on US President Trump’s Greenland deal, said have to wait and not get hopes up too soon.

US Event Calendar

• 8:30 am: 3Q T GDP Annualized QoQ, est. 4.3%, prior 4.3%
• 8:30 am: 3Q T Personal Consumption, est. 3.5%, prior 3.5%
• 8:30 am: 3Q T GDP Price Index, est. 3.8%, prior 3.8%
• 8:30 am: 3Q T Core PCE Price Index QoQ, est. 2.9%, prior 2.9%
• 8:30 am: Jan 17 Initial Jobless Claims, est. 209k, prior 198k
• 8:30 am: Jan 10 Continuing Claims, est. 1890k, prior 1884k
• 10:00 am: Nov Personal Income, est. 0.4%
• 10:00 am: Nov Personal Spending, est. 0.5%
• 10:00 am: Nov Real Personal Spending, est. 0.3%
• 10:00 am: Nov PCE Price Index MoM, est. 0.2%
• 10:00 am: Nov PCE Price Index YoY, est. 2.79%
• 10:00 am: Nov Core PCE Price Index MoM, est. 0.2%
• 10:00 am: Nov Core PCE Price Index YoY, est. 2.8%

DB’s Jim Reid concludes the overnight wrap

Now where were we before the weekend news? We’ve seen a big recovery over the last 18 hours after Mr Trump has seemingly agreed a deal on Greenland with the tariff threat for February 1st being withdrawn.

Indeed, the lows for the week came pretty much just before Mr Trump spoke at Davos. The first sense of relief for markets came after Trump’s suggestion that the US wouldn’t use force to acquire Greenland. This then strengthened after the European close, as Trump posted that he would not be imposing the threatened tariffs starting February 1st, citing agreement on “the framework of a future deal with respect to Greenland”. So that led to a big relief rally as investors priced out escalatory scenarios, with financial stress easing across multiple asset classes. The S&P (+1.16%) rose, and the return to US assets meant 10yr Treasury yields rallied by -5.0bps, and US HY spreads (-7bps) also tightened. That said, gold prices (+1.43%) hit another record of $4,832/oz, taking its YTD gain up to +11.86% already, even as they briefly fell to flat on the day after Trump’s post.

The framework deal over Greenland was apparently reached in Trump’s meeting with NATO Secretary General Rutte. Trump did not offer specific details but called the deal “a little bit complex” in a CNBC interview, suggesting that it would cover issues like mineral rights and the planned Golden Dome missile-defence shield and would last “forever”. The New York Times reported that a compromise option discussed within NATO earlier in the day would see the US taking control over small pockets of Greenland for military bases, with Axios reporting that the proposal will respect Denmark’s overall sovereignty over the island. So, while it’s not yet clear exactly what concessions the US will be getting, these appear to have been markedly scaled back compared to Trump’s recent demands for “complete and total control” of Greenland.

Earlier in the session, markets had rallied after Trump said in his Davos speech that “People thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force”, which eased fears about a military escalation. However, there was still lingering uncertainty as Trump also said he was “seeking immediate negotiations to once again, discuss the acquisition of Greenland by the United States”. Indeed, markets gave up much of their initial gain after Denmark’s foreign minister Lars Lokke Rasmussen said “We will not enter into any negotiations on the basis of giving up fundamental principles. That is something we will never do”. His tone changed after Trump’s announcement of a framework deal, with Rasmussen saying “The day is ending on a better note than it began”.

Risk assets similarly breathed a big sigh of relief after Trump’s post, with the S&P 500 rising by as much as +1.67% intra-day before closing +1.16%. This was a broad rally with all 11 of the index’s sector groups higher on the day, with tariff-sensitive sectors outperforming. Indeed, the Philadelphia Semiconductor Index (+3.18%) hit an all-time high, while the pharma & biotech industry group (+2.34%) was one of the biggest advancers in the S&P 500. Still, the relief rally left the S&P nearly one percent below Friday’s close.  Another US asset that struggled to fully recover was the dollar. The greenback rose +0.34% against the euro, erasing about a third of its decline since Friday. 

Whilst the Greenland news was main the driver boosting markets, another supportive factor was the start of the Supreme Court case into Lisa Cook’s removal from the Fed’s Board of Governors. We don’t have a verdict yet, but the start of arguments showed that some of the conservative justices were questioning some of the Trump administration’s arguments. For example, Justice Brett Kavanaugh said that it would “weaken if not shatter the independence of the Federal Reserve.” So that was viewed as favouring the chances the court would rule against Cook’s removal, which in turn would make it harder for Trump to refashion the Board with his own appointees.

Together with the Greenland news, this helped drive a bull flattening in Treasuries. At the long-end of the curve, which has been most sensitive to concerns around Fed independence, 30yr yields were down -5.7bps on the day to 4.86%, whilst the 10yr yield fell -5.0bps to 4.24%. By contrast, 2yr yields fell by a marginal -1.1bps on the day, having been down -3bps intra-day shortly before Trump spoke in Davos. Yields are flat to a basis point higher across the curve this morning.

Over in Europe, markets had a relatively weaker performance, with bonds and equities struggling to gain traction but rallying from the day’s lows after the Trump speech with futures higher this morning. The STOXX 600 (-0.02%) was basically flat on the day, with losses for Germany’s DAX (-0.58%) set against gains for the UK’s FTSE 100 (+0.11%) and France’s CAC 40 (+0.08%). Notably, we also saw European defence stocks underperform as fears eased about a military escalation, with Rheinmetall down -2.91%. However, Stoxx (+1.17%) and Dax (+1.27%) futures are higher this morning.

Then for sovereign bonds, there was also a fresh bout of losses, with yields on 10yr bunds (+2.4bps), OATs (+1.7bps) and BTPs (+2.8bps) all moving higher. That comes as concerns around energy inflation have continued to gain traction, with European natural gas futures touching €40/MWh for the first time since June amid recent cold weather and declining gas storage.

Here in the UK, 10yr gilts (0.0bps) were a relative outperformer after the latest inflation print for December. It showed headline CPI picking up a bit more than expected to +3.4% (vs. +3.3% expected), but core CPI surprised on the downside at +3.2% (vs. +3.3% expected) which helped to offset the headline beat.

In Asia, the Nikkei (+2.01%) is leading the gains driven by bank stocks with the KOSPI (+0.87%) supported by chipmakers and autos. The S&P/ASX 200 (+0.75%) is also firm following unexpectedly robust jobs data for December (details below). Conversely, Chinese stocks are flattish. S&P 500 (+0.20%) and Nasdaq (+0.30%) futures are edging up further. 10 and 30yr JGB yields are -4.0bps and -5.0bps lower respectively.  

Returning to Australia, the unemployment rate has decreased to a seven-month low of 4.1% from 4.3% in November, better than market expectations of 4.4%. Net employment surged by 65,200 in December compared to November, which saw a revised drop of 28,700. This figure significantly exceeded market forecasts of a 27,000 increase, while full-time employment rebounded by 54,800, in contrast to a decline of 56,500 in the preceding month. Against this background, the Australian dollar (+0.62%) is appreciating, trading at 0.6804 against the US dollar, marking its highest level in 15 months, while three-year government bond yields (+7.6bps) have reached a more than two-year high of 4.25% as we go to print. Meanwhile, markets are anticipating a 61% probability of a rate hike from the RBA on February 3rd, an increase from 26% prior to the data release.

Separately, exports in Japan increased for the fourth month in a row, rising by +5.1% year-on-year in December. This marks a decrease from the +6.1% increase observed in November and fell short of the median prediction of a +6.1% gain. Meanwhile, imports grew +5.3% year-on-year, surpassing the anticipated rise of +3.6%. This indicates stronger domestic demand and elevated input costs. Consequently, Japan reported a trade surplus of ¥105.7 billion, which is considerably less than the expected surplus of approximately ¥360.0 billion.

Looking at the day ahead, US data releases include the weekly initial jobless claims, the updated estimate of Q3 GDP and PCE inflation for November. In the Euro Area, we’ll also get the European Commission’s preliminary consumer confidence indicator for January. From central banks, we’ll get the ECB’s account of their December meeting. Finally, today’s earnings include Intel, General Electric, and Procter & Gamble.

Via City AM,

• Data centre planning applications in England and Wales jumped 63% in 2025, driven largely by AI-related demand and investor enthusiasm.

• Developers are increasingly targeting unconventional sites, from abandoned hotels to former coal mines and landfills, to secure planning approval.

• Power availability and grid constraints are likely to limit how many approved projects are ultimately built, encouraging “bring your own power” models.

Data centre planning applications hit an all-time high in the UK in 2025, City AM can reveal, as investors rushed to gain a foothold in the burgeoning AI market.

More than 60 separate planning applications for the construction of new data centres were filed in England and Wales over the course of the year, according to a City AM analysis of more than 300 local authority planning databases, representing an increase of 63 per cent compared to 2024.

The analysis excluded extensions to existing data centre sites, revisions to past applications  and applications for other developments which included a data centre as part of the plans, meaning the true figure for the number of data centres seeking planning approval is likely to be significantly higher.

The surge in applications lays bare the scale of the demand for compute by the nascent AI industry, with large language models requiring more and more power to operate, and property businesses racing to re-invent themselves as data centre developers to cash in on investor appetite.

Dame Dawn Childs, chief executive of Pure Data Centres, told City AM: “With this AI bubble that everyone’s talking about…because of the increased valuations for powered land, everyone’s trying to get a piece of the pie, and that creates a bunch of fizziness.

“We’re seeing lots of people who are sending out on a daily basis: ‘we’ve got this significant plot of land with all of these megawatts of power in the middle of nowhere, it’ll be an AI gigafactory, buy it for a gazillion pounds’ – they’re absolutely trying to get increased valuations for scrappy industrial land.”

The lion’s share of the demand came from AI applications by Magnificent 7 firms, Childs said, but added that even without AI, there would likely have been a significant increase in applications due to increased cloud computing adoption across the British economy.

The analysis found that around half of the planning applications were situated in London and the South East, regions known as a European hotspot for data centres, though there were also signs of a growing number of data centres being constructed across different parts of the UK. Seven different applications were submitted in Wales during the year, along with another seven in the East Midlands, four in the North West and four in Yorkshire.

The analysis also found property firms becoming more and more creative over the sites chosen to redevelop into data centres in a scramble to gain planning approval. In Watford, developers picked the site of an abandoned Mercure hotel to build a data centre, while in Hackney, the old Truman brewery has been earmarked for conversion. In Nottinghamshire, a shuttered coal mine could be turned into a data centre, while in Chesterfield, a former landfill site could find a new lease of life churning out AI content.

These more ambitious developments were being led by technological advances by data centre hyperscalers, Childs said.

“Previously they needed their cloud regions to be within a certain geography, driven by the cost of power, the availability of power and the price of land,” Childs said.

“They’ve extended that margin now and for some of them they’ve actually doubled the circumference within which they’d be happy to have a child data centre site linked back to their central hub in a cloud region.”

The surge in data centre planning applications is also thought to have been propelled by the launch of the government’s AI Opportunities Action Plan just under a year ago, in which it called for the creation of ‘AI Growth Zones’ – areas designed to build AI infrastructure and attract outside investment and expertise. To date more than 200 submissions for AI Growth Zones have been made by local authorities across the UK.

Planning and power challenges

But the total number of AI data centres ultimately built is likely to be substantially lower than the number of planning applications filed, amid competition for investment and a scarcity of power supplies.

Google’s first UK owned and operated data centre, which opened last year, suffered a series of setbacks before it was ultimately completed.

When the first planning application for the site was submitted in 2018, Thames Water warned it had “identified an inability of the existing water network infrastructure to accommodate the needs of this development proposal”, while a utilities report found the local power supply was inadequate and a new 6km-long cable would have to be dug underground (including drilling under the M25) to connect up to a second National Grid substation.

As a result of power constraints, the “bring your own power” model is also being seen more and more across Europe, in which data centre developers partner with energy specialists to ensure power demands can be met, Childs said.

“Investors are either cautious and savvy and really understand the market… or they are new entrants who are just throwing their hat in the ring to jump on the bandwagon.”

A bipartisan group of lawmakers has proposed creating a new $2.5 billion agency to accelerate U.S. production of rare earths and other critical minerals, according to AP and MSN. 

The effort comes as the Trump administration has already taken aggressive steps to weaken China’s control over materials vital to high-tech products, electric vehicles, and advanced weapons systems.

While it remains unclear how the legislation would align with White House policy, pressure is growing to cut U.S. dependence on China after Beijing used its dominance in the critical minerals market during the trade war. Presidents Donald Trump and Xi Jinping agreed last October to a one-year truce under which China would continue exports while the U.S. eased some technology restrictions.

The Pentagon has spent nearly $5 billion over the past year to secure access to these materials, highlighting how reliant the U.S. remains on China, which processes more than 90% of the world’s critical minerals. To counter that dominance, Washington has begun taking equity stakes in mining companies and, in some cases, guaranteeing prices—an approach more commonly associated with China’s industrial policy.

The Senate bill, introduced by Sens. Jeanne Shaheen of New Hampshire and Todd Young of Indiana, would establish an independent agency to build mineral stockpiles, stabilize prices, and encourage production in the U.S. and allied countries to support both national defense and the broader economy.

Shaheen called the legislation “a historic investment” to strengthen the U.S. economy against China’s leverage, while Young said the proposal is “a much-needed, aggressive step to protect our national and economic security.” Rep. Rob Wittman of Virginia introduced a companion bill in the House.

The AP report says that the urgency escalated after China imposed export restrictions last spring in response to U.S. tariffs, forcing Washington to seek a truce. Defense Secretary Pete Hegseth said the Pentagon has recently “deployed over $4.5 billion in capital commitments” to close deals that will “help free the United States from market manipulation.”

Those efforts include investments in domestic alumina, gallium, and rare earth production, as well as partnerships to strengthen the supply chain for rare earth magnets. Trump reinforced the strategy this week, declaring the U.S. is “too reliant” on foreign critical minerals and ordering negotiations for stronger supply terms.

“Reshoring manufacturing that’s critical to our national and economic security is a top priority for the Trump administration,” a White House spokesperson said.

Some analysts view the strategy as a shift toward state-backed industrial policy. “Despite the dangers of political interference, the strategic logic is compelling,” wrote Elly Rostoum, adding that it could be “a prudent way for the U.S. to ensure strategic autonomy and industrial sovereignty.”

Industry leaders have largely welcomed the approach. “He is playing three-dimensional chess on critical minerals like no previous president has done. It’s about time too, given the military and strategic vulnerability we face,” said Jim Sims of NioCorp.

Alongside domestic investment, the administration is also working with allies, including major mining agreements with Australia and coordinated discussions among G7 finance ministers on supply chain resilience.

Via Remix News,

Despite sparking global news coverage documenting violence, sexual assaults, and drug-related crimes in the shared living integration project “Stek Oost,” the city of Amsterdam refuses to shut the project down.

According to public broadcaster BNNVARA, the municipality has rejected calls to shutter the facility early and plans to run the project until its scheduled end in April 2028.

The project, which launched in 2018, was the subject of a recent NPO 2 report where residents detailed an environment of frequent violence. Records indicate that the housing association responsible for the site, Stadgenoot, had requested an intervention plan from police and city officials as early as 2019 to address sexual abuse.

The news report highlighted serious cases and interviewed the victims in some instances, which has been translated by Remix News.

A Syrian resident was linked to a rape in 2019, but the case was initially closed due to insufficient evidence. However, the individual remained at the dormitory until March 2022, when a second sexual offense led to his expulsion and a subsequent prison sentence.

The former resident said that a Syrian raped her after she went to his room to watch a film and he would not let her leave.

He then raped her.

The woman, Amanda, said: “He wanted to learn Dutch, to get an education. I wanted to help him.”

In addition, students living in the shared spaces reported being threatened with kitchen knives. One student described a 20-centimeter-long blade.

Stadgenoot reportedly considered pulling out of the project in 2023 after its own employees faced threats.

“Stek Oost” was designed to foster social cohesion by housing asylum seekers and Dutch students together.

Initially, the 250 apartments were split in half between the two groups, so 125 places for each group. However, the ratio of asylum seekers was later reduced to 30 percent.

A “buddy system” was implemented to connect the groups and promote integration.

Despite the controversies, the City of Amsterdam has blocked attempts to close the project. District President Carolien de Heer (PvdA) defended the decision to the broadcaster, stating that “250 people could not be put on the streets at once.”

However, what he does not note is that the refugees could simply be removed to another facility, which would not total 250 people.

The project has long been a source of political friction. In 2022, Green Mayor Femke Halsema acknowledged she was aware of the ongoing problems. By 2024, parties including the VVD and JA21 called for the project’s termination.

A scheduled debate on the facility was recently removed from the Municipal Council’s agenda, despite a request for discussion from Anton van Schijndel of the nationalist FvD party (Forum for Democracy).

Now, there are potential political implications to closing the project early, which could be seen as a failure of integration, even when forced and facilitated by the state in a controlled environment.

Read more here…

Tesla’s workforce at its Gigafactory near Berlin has fallen by about 1,700 employees, according to a report by Germany’s Handelsblatt.

An internal document cited by the paper shows the Gruenheide site—Tesla’s only European production hub—now employs 10,703 people, a decline of roughly 14% from staffing levels disclosed ahead of works council elections in 2024. The company did not immediately comment, according to Handelsblatt.

The reduction follows CEO Elon Musk’s April 2024 announcement that Tesla would cut more than 10% of its global workforce to curb costs and boost productivity.

The move also fits a broader pattern in early 2026, as manufacturers and technology firms continue to streamline operations amid slower demand growth, tighter financing conditions, and a push to protect margins after several years of aggressive expansion.

In 2025, Tesla spent much of the year shifting from rapid expansion to consolidation. Management emphasized cost control, factory efficiency, and cash preservation as aggressive price cuts and softer demand compressed automotive margins.

Even as its traditional auto operations lost momentum, Tesla’s stock has been relatively resilient. Investors have increasingly focused on the company’s longer-term ambitions in robotaxi services, autonomous driving software, and artificial intelligence, viewing these as potential high-margin growth engines.

That optimism has helped support the share price despite slowing vehicle sales and a wider backdrop of job cuts across manufacturing and technology in 2026, as companies adjust to weaker growth and higher financing costs.

Authored by Andrew Korybko,

Pakistan’s reported indirect arming of Ukraine through Poland might expand into direct military cooperation between them that could then also elicit concern from Russia…

Top Indian diplomat Dr. Subrahmanyam Jaishankar said during a press conference with his Polish counterpart Radek Sikorski that he wants to discuss the latter’s “recent travels to the region” in an allusion to his trip to Pakistan last fall after spring’s Indo-Pak clashes.

He also said that “Poland should display zero tolerance for terrorism and not help fuel the terrorist infrastructure in our neighbourhood.”

Sikorski later abruptly ended an interview when asked about Pakistani terrorism against India.

India has good reason to be concerned about Poland’s close ties with Pakistan, not just due to Sikorski’s suspicious behavior during the aforesaid interview which hinted at a seemingly inexplicable fear of offending that country, but because of reports that Poland aids Pakistan’s indirect arming of Ukraine.

Although the Russian Ambassador to Pakistan dismissed them as lacking evidence, perhaps in order to not derail their big-ticket energy and infrastructure talks, it’s likely that India believes them.

After all, it wasn’t only Indian media that reported on Pakistan’s indirect arming of Ukraine, but also French media and The Intercept.

The second’s report alleged that “U.S. Helped Pakistan Get IMF Bailout With Secret Arms Deal For Ukraine, Leaked Documents Reveal”, which is believable given Pakistan’s financial problems and the US’ former interest in arming Ukraine to the teeth against Russia.

Pakistan also has a sizeable defense industry and is a “Major Non-NATO Ally” so this alleged deal is reasonable.

Lending credence to this claim was Pakistani Foreign Minister Ishaq Dar declaring after last fall’s talks with Sikorski that “We agreed to expand bilateral cooperation in trade, energy, infrastructure, defence, counter-terrorism, science and technology and education.”

Their defense cooperation might eventually expand beyond Pakistan indirectly arming Ukraine to it directly arming Poland given the latter’s unprecedented military buildup that’s sold to the public on the pretext of defending against Russia.

The lion’s share of its military-technical equipment comes from the US and South Korea due to how embarrassingly underdeveloped its domestic military-industrial complex is, but it would make sense for Poland to pragmatically diversify suppliers by exploring related options with Pakistan.

This is especially so if they’ve already been cooperating on indirectly arming Ukraine and Pakistan took the opportunity to market its other military-technical equipment to Poland. Any such deal would bother Russia and India.

Russia would dislike Pakistan arming Poland amidst their talks on big-ticket deals, which arguably require the US’ approval that Trump might not provide in order for US companies to take advantage of these opportunities instead, while India would object to Poland financing its rival through weapons deals.

Pakistan and Poland are also nowadays the US’ top partners in their home regions so each might lobby their shared US patron in support of the other’s interests as a goodwill gesture for bolstering their ties.

It’s therefore not just India which has good reason to be concerned about Poland’s close ties with Pakistan but also Russia, whose associated concerns could be exacerbated if India shares any intelligence with Russia that it might have obtained about their planned defense cooperation.

In that scenario, Russia would still be unlikely to end its energy and infrastructure talks with Pakistan since that’s not its diplomatic style, but it might become reluctant to further expand bilateral ties in other spheres.

Authored by Judge Glock & Christopher F. Rufo via City Journal,

On the campaign trail, President Donald Trump promised to end federal spending on diversity, equity, and inclusion (DEI) programs. Yet the government has continued to award contracts based on race and sex. Despite rampant fraud and multiple court rulings against the practice, the Small Business Administration (SBA) has used “disadvantage” essays from business owners to skirt the rules and continue discriminatory programs that dole out billions in government contracts.

For decades, the federal government has awarded certain special contracts exclusively to so-called disadvantaged businesses and women-owned small businesses. Until 2023, SBA presumed that racial minorities were “disadvantaged.” The resulting discrimination was absolute: according to an analysis conducted between 2020 and 2023, these programs made not a single award to white men.

Though the second Trump administration has taken steps to limit these contracts, the largest disadvantaged-business initiative—the SBA’s 8(a) program—is thriving. The program “is still one of the most lucrative and sought after” SBA certificates, one contracting lawyer said in November. In fact, fiscal year 2025 saw the largest 8(a) spending on record, totaling $26 billion.

President Trump signed an executive order forbidding federal DEI discrimination, and a federal district court struck down the SBA’s presumption that minorities are disadvantaged. How, then, has 8(a) survived?

Much as colleges have used personal essays to evade affirmative-action bans, the Small Business Administration has asked companies to submit “social disadvantage narratives” to qualify for the 8(a) program. These allow business owners to establish minority status through descriptions of racial taunts or alleged discrimination. Applicants might not check a racial box, but the implication is clear: no white men need apply.

The SBA’s “Guide for Demonstrating Social Disadvantage” reveals how the shell game works. The guide teaches applicants how to play the system, featuring examples of potential “disadvantage.” It gives minorities and women the magic words: “I believe my application [for a bank loan] was denied due to bias toward my race” and “I believe my request [to declare a business major] was denied based on sex bias.” Once the agency approves the application, the contracts can start flowing—no real evidence required.

Are these applicants always disadvantaged? No. Consider Earl Stafford Jr., a black contractor who wrote an essay to apply for the 8(a) program. The Washington Business Journal reported on Stafford’s “painstaking” ordeal of writing the essay, in which he described unspecified acts of discrimination that made him think that he did not have “what it took to be in business.” Yet his father, Earl Stafford Sr., founded a successful defense firm and started his own private foundation—hardly the background of a disadvantaged person.

As with any racialized initiative, the 8(a) program is ripe for fraud. White business owners can find a minority front man or a woman to head a nominally disadvantaged or woman-owned firm, which the white man continues to run behind the scenes. Another option is for minority-owned firms to receive the government contract but act as “pass through,” taking a cut off the top and paying another firm to do the contracted work. The Supreme Court ruled last year against a “disadvantaged” company that provided none of the required paint for a Philadelphia bridge and train station and passed the work to other firms.

Out-and-out dishonesty is also common. In 2023, Margarita Howard and her companies HX5 and HX5 Sierra were forced to pay the government almost $8 million for lying about Howard’s assets in order to participate in 8(a). At the time she claimed to be disadvantaged, Howard was living in a 14,000-square-foot waterside Florida mansion featured on HGTV’s Extreme Homes, the complaint against her alleges. Howard is still the CEO of HX5 (a “woman-owned small business”) and applies for federal money. The Trump administration awarded her company millions last year.

Other aspiring federal contractors have pretended to be Native American or embezzled funds intended for Natives. ProPublica recently highlighted the case of Charles Dawson, a contractor whose companies won hundreds of millions of dollars on a promise to use his profits to help “Native Hawaiians.” He funneled some of the money into private jets, Porsches, and polo. Even after a federal raid on Dawson’s house, the companies continued to win federal support.

Everyone within the system knows such fraud is rampant. A 2018 government audit reviewed 25 8(a) recipient firms which together received more than $100 million. Of these, 20 “should have been removed from the . . . program” due to ineligibility.

The Trump administration has taken important steps to address these problems. Late Friday, Secretary of War Pete Hegseth announced he was ordering a “line by line” investigation of 8(a) contracts. President Biden’s SBA sought to award 15 percent of all federal contracts to disadvantaged firms. Trump SBA administrator Kelly Loeffler has reduced the goal to the law’s actual standard of 5 percent. Her administration has also demanded financial records from 8(a) businesses to weed out fraud.

But the core problem with these programs is not fraud. It is that they systematically discriminate against one group: white men.

Instead of trying to reform 8(a), the Trump administration should abolish it. Under the Fourteenth Amendment’s Equal Protection Clause, the administration would be within its rights to stop all contracting based on race and sex, even if such contracting were justified under the fig leaf of a “disadvantage” essay. The White House could also support Senator Joni Ernst’s “Stop 8(a) Contracting Fraud Act,” which would pause 8(a) contracting until a thorough audit is completed, or call on Congress to end the program altogether.

When the administration says, “no DEI,” it should mean it. In federal contracting, that’s also what the Constitution requires.

Judge Glock is director of research at the Manhattan Institute and author of The Dead Pledge: The Origins of the Mortgage Market and Federal Bailouts, 1913–1939. Christopher F. Rufo is a senior fellow at the Manhattan Institute, a contributing editor of City Journal, and the author of America’s Cultural Revolution.

The White Coat Waste Project – which you may remember for exposing Dr. Anthony Fauci’s sick experiments on beagles in 2024 – has obtained a document revealing that the National Institutes of Health’s (NIH) Rocky Mountain Laboratories (RML) in Hamilton, Montana reported a biological incident in November 2025. 

RML, which operates BSL-2, BSL-3, and BSL-4 ‘full suit’ laboratories notably studies viral hemorrhagic fevers such as Ebola, Marburg and Lassa virus, as well as coronaviruses, dangerous bacteria, tuberculosis, tick-borne pathogens (Rocky Mountain spotted fever, for example), West Nile virus, Prion diseases, and others. 

According to a November 2025 biosafety report obtained by WCWP, a ‘Form 3’ was reported to the Federal Select Agent Program on Nov. 13, 2025. Form 3 is a mandatory notification form used to alert the Federal Select Agent Program of any ‘theft, loss, or release’ involving select agents or toxins, Infowars’ Breanna Morello reports after interviewing WCWP’s Justin Goodman – who called Rocky Mountain Laboratories ‘one of the most dangerous biolabs in the country.‘

Watch:

🚨EXCLUSIVE🚨

A Fauci federal bio lab in Montana can’t locate a biological agent.

The biological agent is either stolen, lost or was released, according to documents obtained by The White Coat Waste Project.

SVP @JustinRGoodman joins me to detail the new documents. pic.twitter.com/NmwQ70tod9

— Breanna Morello (@BreannaMorello) January 20, 2026

Partial transcript below: 

Morello: “You’ve recently obtained these documents over at the White Coat Waste Project, which detail specifically the threat that a bio agent, which apparently is classified as potentially posing a severe threat to public health, has been either stolen, lost, or released. What are some of the details behind this concerning story?”

Goodman: “Now, we recently—last week—exposed how Jay Bhattacharya, NIH director, just gave another $2 million to a bat lab being built at Colorado State University to provide animals for infection studies. Both the Colorado State and, as you mentioned, the Rocky Mountain Lab… Now, the Rocky Mountain Laboratory in Montana is run by Fauci’s former NIH division, the National Institute of Allergy and Infectious Diseases.

“It is very infamous. The Rocky Mountain Lab is where ticks were weaponized with NIH and DOD to spread Lyme and other diseases back to the 1960s and ’70s. More recently, White Coat Waste exposed how—a couple years prior to the pandemic—the Rocky Mountain Laboratory was cloning coronaviruses that Peter Daszak and the Wuhan lab were finding out in bat caves in Wuhan. They were cloning those viruses at Rocky Mountain Laboratory.”

“These are the same viruses that the Wuhan Lab was doing gain-of-function with, putting spike proteins around at around the same time. The Rocky Mountain Lab has a very sordid history doing the most dangerous experiments in this country—Ebola, plague, anthrax, lots of different hemorrhagic fevers that have no cure and 90-95% kill rates in people. So we’ve been following the money to the Rocky Mountain Lab because this new Colorado State bat lab is going to be supplying bats to these facilities.

“Now, what we just uncovered is that in November 2025—just a couple months ago—quietly, NIH posted a biosafety test to see if there’s any from Rocky Mountain Lab, indicating that a select agent… Now, select agents are very deadly pathogens—serious health concerns for both humans and livestock. These are things used as bioweapons, things like ricin, anthrax, Ebola, tularemia. The Rocky Mountain Lab report just has a very benign item—if you didn’t know what we were looking for—one of these pathogens was either accidentally released, lost, or stolen from this NIH-funded bioagent lab that participates in dangerous animal experiments with the military.

“So we don’t know exactly what that agent was and what happened, but we do know there’s a serious biosafety breach at one of the most dangerous biolabs in the country, run by the NIH. And we only know about this because we stumbled upon this document when we were digging into what’s currently happening at the Rocky Mountain Lab because of its tie to this very controversial bat lab project at Colorado State, which has gone viral—pun intended—over the last couple weeks.”

Authored by E.J. Antoni via The Epoch Times (emphasis ours),

I’d like to talk today about the recent events in Venezuela, specifically from an economic point of view, and who are the real winners and losers.

Let’s start with the obvious. The Venezuela operation is a win for America and the Venezuelan people. American consumers and businesses will benefit from lower prices while oil companies have a chance for bigger profits.

Venezuelans will benefit from increased investment, jobs, and profits in their country as well. This is why their stock market jumped 50, 60, 70, 80 percent after the U.S. takeover.

And if we recall that economic security is national security, then the new order in South America also simultaneously supports U.S. national security while undermining our greatest rival, China. In war, dependable access to oil is as important as dependable access to kinetic arms.

Access to ample, reliable flows of oil represents a key strategic interest. Removing one such flow from the Chinese sphere of influence and bringing it into our own is tremendous progress toward this goal. But the biggest loser of all isn’t China or Russia, it’s Canada.

Western Canada sends over four million barrels a day of heavy crude to American refiners that are equipped to handle this type of oil. But now, with access to the massive flows of Venezuelan crude, which is similar to the Canadian flavor, the United States no longer needs to rely on Canada to keep the refineries on the Gulf of America running at full capacity.

Instead, the oil shipments that previously went to China are already being redirected to American refiners—tens of millions of barrels worth just days after Maduro’s capture. And while the United States is paying full market price for that oil, don’t be surprised if oil prices start coming down because of this redirection.

After all, increasing supply puts downward pressure on prices. As American investment rebuilds Venezuela’s severely neglected oil infrastructure, we can expect production and exports to the United States to only increase, simultaneously benefiting the American and Venezuelan people.

That’s why this is such a massive economic win for American families and businesses who will benefit from lower prices, courtesy of more energy supplies. And since energy affects the price of everything else in an economy, lower prices for products like gasoline will put downward pressure on countless other prices, providing relief after four years of inflation under the Biden administration.

Consider when you go to a grocery store how much of the price of food you’re buying is dependent on energy prices. First off, farmers and ranchers are fueling their tractors and other vehicles with diesel and gas. They’re also using synthetic fertilizers created with natural gas.

But how did the gallon of milk, the carton of eggs, or the bag of bread get to grocery store in the first place? It got there on a trunk. Fueled by oil. What I’m getting at here is that we seriously underestimate just how much the price of energy affects everything we do and everything we buy.

Bring down energy prices, and you put downward pressure on prices throughout the economy. That’s a win for American consumers and businesses alike.

And U.S. control of Venezuela is also a second chance for jilted American oil companies to again profit from nearly one-fifth of the world’s proven oil reserves.

Years ago, those American companies poured investment into Venezuela to essentially modernize the entire industry there. For their troubles, these oil firms had their physical property confiscated and their intellectual property copied as the communists “nationalized” Venezuelan oil.

Of course, communist rule there was a disaster, as it has been everywhere, and the oil industry languished as infrastructure decayed, investment lagged, and production fell well below its potential. Venezuela pumps much less oil today than they did a quarter century ago. But this is poised to reverse.

Venezuela will now assuredly receive billions of dollars of investment from American oil companies, many of whom are champing at the bit to regain access to the largest reserves in the world. That will mean a windfall of jobs and income for the Venezuelan people, all of which could have been Canada’s, bringing us back to the story of the biggest economic loser here.

It didn’t have to be this way for the fifty-first state. But instead of welcoming oil and gas investment from the United States and building valuable infrastructure like pipelines, Canada has preferred to prioritize far-Left causes and an anti-energy agenda.

After recent events, not only is Canada losing its biggest crude customer, but it’s also losing its only real leverage in trade talks with the United States. This is an economic reality that few professional pundits seem to have grasped.

To be clear, the flood of cheap Venezuelan crude will not arrive in the United States overnight. It will take time, years in fact, to rebuild Venezuela’s oil infrastructure and really ramp up production to replace most Canadian crude imports. But the writing is on the wall.

The United States, for a change, is firmly in the driver’s seat and master of its own destiny—and hemisphere.

The economic story here also goes well beyond oil too, although that’s what has gotten most of the attention. Venezuela is a veritable goldmine of other natural resources like rare earth minerals, lumber, bauxite (the primary source of aluminum), natural gas, and more. Canada just lost not only its leverage with oil, but just about every other one of its exports too.

Since the Canadian economy is much more dependent on exports than the U.S. economy is, and since nearly all Canadian exports come to the United States while relative few of ours go to Canada, the slowdown in trade between our two countries has very unequal effects.

In short, this has been very harmful to Canada and will be devastating in the long run. But it’s little more than a speedbump here in America.

President Donald Trump has effectively barred the door on Canada, and the latter will have few alternatives to completely opening every one of its markets to free and fair competition.

Of course, Canada can always choose to fall further into irrelevance and economic impoverishment by stubbornly continuing to snub American manufacturers, farmers, and workers.

Let me close by saying that if the Monroe Doctrine warned Europeans to stay out of the Western Hemisphere and the Roosevelt corollary established American intervention therein, then the Trump corollary has put a finer, and more economic, point on the matter that’s best summed up in two words: America first.

Opinions expressed in this article do not necessarily reflect the opinions of ZeroHedge.