The Swiss franc is trading near a 15-year high against the dollar. The Chinese yuan strengthened to 6.9 per dollar

On Monday, trading on the US stock market closed higher. The Dow Jones Index (US30) gained 0.04%. The S&P 500 Index (US500) rose by 0.47%. The Nasdaq Technology Index (US100) closed higher by 0.90%. The market was primarily supported by shares of large technology companies and AI-related issuers, which offset investor caution ahead of the publication of key US macroeconomic data. The growth leaders were Nvidia (+2.5%), Broadcom (+3.4%), and Oracle (+9.6%) following analyst upgrades amid steady demand for AI infrastructure. At the same time, software developers lagged, reflecting concerns regarding generative AI’s pressure on margins and the outlook for the cloud business. Market focus is shifting to the delayed employment report and upcoming US inflation data.

The Canadian dollar (CAD) strengthened to 1.356 per USD, approaching a 16-month high, amid strong labor market data and rising commodity prices. In January, unemployment fell to 6.5%, the lowest since September 2024, while growth in full-time employment and wages weakened expectations for an early policy easing by the Bank of Canada and supported foreign capital inflows. The CAD received additional support from the general weakening of the US dollar following weak US labor data and rising oil prices, which improved Canada’s terms of trade.

The Mexican peso (MXN) strengthened to 17.20 per dollar, hitting a new high since mid-2024 amid USD weakening and the market’s reaction to January inflation data. Banxico’s decision to maintain the rate at 7% and its emphasis on inflationary risks reduced expectations of rapid policy easing, supporting the peso’s real yield. Inflation in January accelerated to 3.79% y/y, slightly missing projections, with moderate monthly price growth, allowing the regulator to maintain a cautious approach.

Equity markets in Europe mostly rose yesterday. The German DAX (DE40) rose by 1.19%, the French CAC 40 (FR40) closed up 0.60%, the Spanish IBEX 35 (ES35) gained 1.40%, and the British FTSE 100 (UK100) closed positive 0.16%. European stock indices closed with sharp gains on Monday, supported by banks, industrial giants, and the technology sector amid a series of positive corporate news and a steady view of relatively favorable macroeconomic conditions for equities this year.

The Swiss franc (CHF) strengthened to 0.770 per dollar, approaching its highest levels since 2011 amid demand for safe-haven assets and USD weakness. Investors remain cautious due to risks surrounding AI and recommendations from Chinese regulators to reduce holdings in US Treasuries, which is intensifying capital outflows from the dollar. The market focus this week is on Swiss inflation data for January (February 13), where prices are expected to rise by only 0.1% y/y. SNB Chairman Martin Schlegel noted the challenges of low inflation with a 0% rate, emphasizing the bank’s readiness to intervene in the currency market if necessary, rather than rushing to cut rates, maintaining a course toward price stability.

On Tuesday, WTI oil prices declined toward $64.2 per barrel but retained most of the gains recorded on Monday amid ongoing geopolitical tensions between the US and Iran. Prices were supported by Washington’s warning to US-flagged vessels to avoid Iranian waters when passing through the Strait of Hormuz, despite reports of progress in negotiations held in Oman. At the same time, uncertainty surrounding a possible agreement persists as Iran continues to insist on uranium enrichment. An additional risk factor for the market remains the situation with Indian imports of Russian oil: a possible freeze on purchases as part of a new trade agreement with the US could significantly support oil quotes.

Asian markets rose confidently on Monday. The Japanese Nikkei 225 (JP225) jumped 3.89% after the weekend elections, the Chinese FTSE China A50 (CHA50) rose by 1.24%, the Hong Kong Hang Seng (HK50) gained 1.76%, and the Australian ASX 200 (AU200) showed a positive result of 1.85%. Sentiment in Asia improved after Japan’s ruling party won a convincing election victory, but investors are still grappling with an uncertain economic outlook and concerns over the impact of artificial intelligence on various sectors.
On Tuesday, the offshore yuan (CNH) strengthened to 6.9 per dollar, approaching a 34-month high following reports that Chinese regulators recommended banks reduce excessive exposure to US Treasuries. The measure is aimed at reducing concentration risks amid uncertain US economic policy and has strengthened expectations of a broader global shift away from dollar assets, as well as a gradual structural shift in China’s currency strategy. The yuan received additional support from increased corporate demand ahead of the Lunar New Year, when companies traditionally convert dollars for payroll, supplier settlements, and bonuses.