The bad news twins for non-USD FX and US equities over the weekend were
Trump slamming Colombia with tariffs, and Colombia responding tit-for-tatNVDA (and NASDAQ) was slammed by Chinese AI developments in Deep SeekTrump sent a military plane of shackled deportees to Colombia. Colombia turned the plane back to the US, arguing that migrants should be treated with dignity and respect. The President of Colombia offered to accept deported Colombians on civilian flights. Trump responded by slamming tariffs and other sanctions on Colombia. Colombia then responded in kind, with equivalent sanctions on US products.
The USD opened higher in early trade in Asia and has continued to ratchet up.
Globex opened US equity indexes lower. In addition to the nascent trade war NASDAQ (NQ futures) was hit by Chinese AI DeepSeek developments that will likely weigh on the NVDA share price
the project took only $6 million to trainits open sourceit performs on par with leading AI modelsseems to have navigated U.S. semiconductor restrictions on Chinauses fewer chips, and not necessarily Nvidia’sOf course all of this is good news if you were positioned on the correct side.
There was also news from an unnamed source saying Trump's advisers want tariffs on Canada and Mexico as soon as Saturday, February 1, before talks begin.
Later in the session we had the news that the US will not levy threatened tariffs on Colombia after the South American nation agreed to take illegal migrants back. The USD retraced some of its gains on this reversal of the news. Trade war over, for now.
In the midst of all this we had poor data from China. Official PMIs from the country’s National Bureau of Statistics (NBS) showed manufacturing falling back into contraction, dropping to 49.1 from 50.1 in December. The non-manufacturing sector also showed signs of slowing, with its PMI falling to 50.2 from 52.2 in December, reflecting weaker momentum in services and construction.
This article was written by Eamonn Sheridan at www.forexlive.com. Read More Details
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