2: Trump has angered a number of allies after playing down their efforts, including in Afghanistan. There was recognition of the UK’s efforts over the weekend, but no direct apology and no recognition of other countries, such as Denmark, which, on a relative basis, lost more soldiers than the US in Afghanistan. The White House and Trump are also continuing their provocations towards the Danish Kingdom.
3: There are also new tariff threats from Trump. This time it is Canada that is facing a 100 percent tariff following its trade agreement with China. But it may well go the same way as the announced 25 percent tariffs on countries trading with Iran, which were never implemented.
4: The Financial Times wrote last week that the US has attempted to destabilise Iraq economically. Iraq is the world’s fourth-largest oil producer.
5: Direct negotiations between Ukraine and Russia took place in the UAE over the weekend. Progress has been reported, and the parties will meet again on 1 February. Russia continues, however, to send large volumes of missiles and attack drones into Ukraine. According to the Financial Times, the US has now indicated that US security guarantees are conditional on Ukraine handing over to Russia the part of Donbas that Ukraine has controlled and defended throughout the war. Donbas is a central part of Ukraine’s defensive line against Russia.
7: In Japan, there is discussion about whether the Bank of Japan will intervene to strengthen the yen in a situation where the US dollar is already under pressure. The dollar weakness has accelerated this week, and today, EUR/USD is trading above 1.19. Normally, a weaker dollar is seen as positive for USD-denominated commodities. Gold and copper continued to rise, while the impact on oil has so far been limited. But on the margin, a weaker US dollar tends to push oil prices higher.
8: The serious situation in Minneapolis could have political implications. Democrats are now threatening to trigger a government shutdown on 30 January unless funding for ICE is halted. Some Republicans are also beginning to speak out against Trump.
9: Arctic cold in the US could affect both oil production and refineries. The impact is expected to be short-lived. Cold weather increases demand for heating oil. By contrast, consumption of, for example, jet fuel and petrol is lower.
10: The US Federal Reserve meets tomorrow. Rates are expected to be left unchanged at 3.50 to 3.75 percent. Unchanged rates could create renewed pressure on the central bank’s independence from the White House.
