Key Information Commentary The Federal Reserve maintained the benchmark interest rate unchanged at 3.50%-3.75%, pausing action after three consecutive 25-basis-point rate cuts, which aligned with market expectations. Fed Chair candidate Waller supported a 25-basis-point rate cut, a stance consistent with Trump's appointed Governor Milan. The Fed's statement indicated preliminary signs of stabilization in the unemployment rate, while inflation remains relatively high and economic outlook uncertainty persists. During the press conference, Chair Powell stated that a rate hike is not the baseline assumption for the next move for anyone, expressed confidence that the Fed would not lose its independence, and would advise the next Fed Chair to remain apolitical.

President Trump formally nominated former Fed Governor Kevin Warsh as the next Federal Reserve Chair, succeeding Powell whose term ends in May. This nomination requires Senate approval. However, Senate Democratic Leader Schumer and Republican Senator Tillis have stated they will block Warsh's nomination unless the investigation into Powell is dropped. Democratic Senator Warren also commented that Warsh is not an ideal candidate for Fed Chair. During his tenure at the Fed, Warsh held a hawkish monetary policy stance but has recently shifted to support Trump's tariff policies and faster rate cuts. Analysis suggests that if Warsh ultimately leads the Fed, markets might witness significant adjustments to the Fed's policy framework. Deutsche Bank believes Warsh's policy approach could present a unique combination of "rate cuts proceeding alongside balance sheet reduction."

Warsh's nomination for Fed Chair ignited hawkish expectations, triggering an historic plunge in global precious metals markets. Spot silver plummeted over 35%, breaching the $75/ounce level. Spot gold fell nearly 13%, dropping below $4700/ounce. Additionally, spot platinum declined over 24%, and spot palladium dropped over 22%. At the close, spot silver was down 26.42% at $85.26/ounce, spot gold fell 9.25% to $4880.3/ounce, platinum dropped nearly 17%, and palladium declined nearly 15%. COMEX gold fell 8.35%, while COMEX silver dropped 25.5%.

China's official January Manufacturing PMI was 49.3%, down 0.8 percentage points month-on-month; the Non-Manufacturing PMI was 49.4%, down 0.8 percentage points; the Composite PMI Output Index was 49.8%, down 0.9 percentage points. The National Bureau of Statistics noted that in January, some manufacturing industries entered their traditional off-season, coupled with still insufficient effective market demand, leading to a decline in manufacturing prosperity. Influenced by factors including decreased activity in sectors like construction, the Non-Manufacturing Business Activity Index retreated, although financial market activity remained relatively high.

US November 2025 Durable Goods Orders increased 5.3% month-on-month, the largest gain in six months, significantly exceeding the market expectation of 3.7% growth. Core Durable Goods Orders rose 0.5% month-on-month, marking the eighth consecutive month of growth.

US President Trump stated the US dollar is performing well and he is not worried about its decline; he can let the dollar fluctuate like a yo-yo; he does not believe the dollar has fallen too much; the dollar is returning to its appropriate level, which is reasonable; Japan has always wanted its currency to depreciate. Following these comments, the US Dollar Index fell over 1% to 95.7905, hitting a near four-year low.

Market Review Futures Market

Data source: Wind, Sino-Canada Fund; as of January 30, 2026. Futures gains/losses calculated based on settlement prices. Regarding futures prices Last week, various futures prices experienced volatility, with oil posting the largest gain and gold suffering the steepest decline. ICE Brent crude closed at $69.83, up 7.32%, while COMEX gold closed at $4907.5, down 2.12%.

The US Dollar Index fell 39.01 basis points last week, as Trump's comments and the renewed threat of a US government shutdown weakened dollar confidence, leading to a softer dollar. Against this backdrop, the Renminbi depreciated 102 basis points last week, while the Yen appreciated 94.3 basis points.

Stock Market

Data source: Wind, Sino-Canada Fund; as of January 30, 2026. Performance of A-shares Major sectors trended downwards last week, with the SME Board falling 3.78%, the worst performer; the SSE 50 rose 1.13%, the best performer. The spring rally entered its final stages, and market sentiment moderated. The Equity Fund Index declined 0.76%.

Data source: Wind, Sino-Canada Fund; as of January 30, 2026. Hong Kong Stock Market The Hang Seng Index rose 2.38%, while the Hang Seng Tech Index fell 1.38%. The Hong Kong market experienced fluctuations against the backdrop of a weaker US dollar but disappointing domestic economic data.

Data source: Wind, Sino-Canada Fund; as of January 30, 2026. US Stock Market US stocks were volatile last week. Among the three major indices, the Dow Jones Industrial Average fell 0.42%, performing the worst; the S&P 500 rose 0.34%, performing the best. Strong durable goods order data bolstered market sentiment, but Trump's nomination of Warsh as the new Fed Chair heightened hawkish expectations, leading to a mixed performance for US stocks. It is noteworthy that as US policy again employs tariffs, initiating a new round of trade wars, the global economy will face impacts, raising concerns about whether the US can achieve a soft landing amidst high interest rates.

Bond Market

Data source: Wind, Sino-Canada Fund; as of January 30, 2026. Percentile refers to the past five-year percentile. Regarding the bond market Among major bonds last week, credit bonds generally declined, with 3Y AA and AA- down 7BP, the largest drop. Government bonds experienced slight volatility with a downward trend, with 3Y, 5Y, and 10Y government bonds down 2BP, the largest decline. Bond yields trended lower amid weaker economic data and eased real estate debt risks. Looking ahead, although US tariff policies pose some pressure on domestic exports, recent domestic anti-involution policies have significantly boosted inflation expectations; subsequent focus will be on the duration and intensity of the inflation rebound.

Data source: Wind, Sino-Canada Fund; as of January 30, 2026. US Treasury Market Yields were volatile last week, with short-end yields falling and long-end yields rising. On one hand, Trump's nomination of Warsh as Fed Chair increased hawkish expectations, pushing yields higher; on the other hand, post-January FOMC comments from Fed Governors supporting rate cuts led yields lower. Simultaneously, with the widespread implementation of tariff policies, subsequent attention will be on whether the US economy can achieve a smooth landing amidst international political disturbances.

Asset Allocation Views Domestic PMI Data Weakens, Fed Holds Steady in January Last week, China released its January 2026 PMI data. The Manufacturing PMI fell noticeably from 50.1 in December to 49.3, indicating ongoing insufficient domestic demand in the economy. Looking forward, recent Sino-US trade tensions have eased somewhat, but deglobalization trends persist. On the domestic demand front, continued relaxation of property policies coupled with increased birth subsidies should provide some support for economic growth. Against a backdrop of significant overseas uncertainty, the economic fundamentals are expected to experience some volatile recovery. Overseas, the January FOMC meeting held rates steady, meeting expectations, while Trump announced the nomination of Warsh as the new Fed Chair. Given Warsh's previous monetary policy stance, markets anticipate the Fed's policy will shift towards rate cuts concurrent with balance sheet reduction in the near future. Regarding rate cut expectations, as current Chair Powell's term nears its end, markets expect no further cuts under his leadership, anticipating a new round of cuts after the June transition. The current market-implied probability of a rate cut at the March 2026 FOMC meeting is 13%.

Data source: Wind, Sino-Canada Fund; as of January 30, 2026. Risk Disclosure: The information in this material is sourced from publicly available information, and no warranty is made regarding its accuracy, completeness, or reliability. The views and analysis herein represent only the research team's opinions and do not constitute actual investment results or any investment advice or guarantee to investors under any circumstances. No media, website, or individual may reproduce this material without authorization.

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