Daily Update:

• Headline PPI in the US increased in January to 3.5% year-over-year, and 0.4% from December to January, above economist expectations of 0.3%. The monthly figure for December was also upwardly revised from 0.2% to 0.5%.
• The core PPI also rose 3.6% YoY and 0.3% MoM respectively, higher than in December and above market expectations.
• There was some good news in the report for the Fed – several PPI components that are passed into the Fed’s preferred PCE inflation measure did decline, such as health care, and airfares – domestic airline passenger services fell 0.3% on the month, following a 5% increase in December.
• The totality of both this week’s CPI and PPI report have once again pushed back market expectations for a further interest rate cut by the Federal Reserve even later in the year – now to September.

• President Trump signed his ‘Fair and Reciprocal’ plan yesterday directing Howard Lutnick, the US Commerce secretary, to propose a round of reciprocal tariffs on a country-by-country basis (bilateral trade), as opposed to a universal levy on all imports.
• Lutnick told reporters that all studies should be complete by April 1 after which Trump could act.
• Trump told reporters “I’ve decided, for purposes of fairness, that I will charge a reciprocal tariff, meaning whatever countries charge the United States of America”. He also said that he will impose import taxes on cars, semiconductors and pharmaceuticals “beyond” that of the reciprocal tariffs.

• Bloomberg has launched the ‘Bloomberg Bitcoin & Gold Blend Indices’, a set of multi-asset indices designed to help investors develop an investment strategy that complements volatile assets with more stable ones. Some of the indices that have been announced include the Bloomberg Bitcoin and Gold Equal-Weighted Index (BBIG), and the Bloomberg Dollar, Bitcoin and Gold Equal-Weighted Index (BBUG).
• Head of Commodities & Crypto Index Products at Bloomberg cited one reason for the new indices is that Bloomberg sees “a fundamental case for using Bitcoin and Gold, not Bitcoin versus Gold.”

• Yesterday, the Ethereum Foundation deployed 10,000 ETH into Spark, 10,000 ETH into Aave Prime, 20,800 ETH into Aave Core, and 4,200 ETH into Compound totalling approximately $120M, to boost the security and usability of DeFi applications on Ethereum.
• Trump-backed World Liberty Financial bought more crypto yesterday, trading its USDC holdings for $1.4M of MOVE tokens and $5M of wBTC. Additionally, WLF has staked 2,221 ETH with Lido Finance and deposited a further 5M USDC into Aave’s lending protocol.

This Week’s Calendar:

Charts Of The Day: