Overview
Following the decision of the US President on enforcing sanctions and tariffs on Colombia, stocks in Asian markets surged in the initial trading hours. The reason for implementing sanctions and tariffs on Colombia was due to the country hindering the US immigration goals. Despite the surge in Asian stocks, investors are still vigilant due to global uncertainties prevailing in the market.

Global Market
When the markets open, futures in the Hong Kong market are anticipated to see small gains. Also, the stocks in the Japanese market surged. In contrast to this, the futures in the US market decline. It led to a decline in the improvement made in the previous week. The performance observed in the previous week was considered as the best performance for the presidential tenure after 1985. Due to the Australia Day holiday, the Australian market remains closed.

In the previous week, the international markets recorded an improvement. In the initial period, there was concern prevailing in the markets about the rise of international trade war in the initial days of Trump’s administration. However, these worries were eased due to Trump not immediately imposing tariffs on regions such as China, Mexico, and Canada.

In present times, the worries have appeared again due to Trump implementing sanctions and tariffs on Colombia. The reason for this was Colombia ‘s denial to allow deportation planes of the US.

Asian markets
A strategist working in BNY in Hong Kong, Wee Khoon Chong stated that it is too soon to say that Asian markets will be off the radar from the tariff threats. The markets in Asia continue to be at risk due to unpredictability about tariffs. He further stated that lower or less aggressive tariffs would be a good thing in the short-term period.

Impact of the sanctions on the world
In the initial trading hours of the Asian markets, the dollar was raised slightly due to these sanctions. In contrast to this, the Mexican peso recorded a fall in the value. It helped the US dollar to lower the big loss recorded in the previous week, which it acquired over a period of year. While, currencies such as Australian dollar which are usually affected by Chinese tariffs, registered a surge in the market. In the emerging markets, currencies of Latin America and Eastern Europeans also face rise in the markets.

Impact of China’s activity data
There is a possibility that it will show weak growth in the manufacturing sector of the country for the year 2024 and it will perform the same in the current year as well. Apart from this, the trading in Asian markets are likely to be impacted because important markets will be closed in the mid week due to Lunar New Year.

Impact of the US tech earnings reports
The beginning of the season of the tech companies of the US publishing their earnings reports will be crucial for the international stock markets in the world. Many investors are curious to observe if the demand for artificial intelligence (AI) has surged according to the high projections. In the initial part of the week, the tech industry was strengthened by the joint venture of Open AI, Oracle, and SoftBank Group which accounts for 100 billion dollars. The purpose of this venture is to finance Artificial intelligence infrastructure. These steps were taken with the help of the US President Trump.

Performance of the US economy
In the meeting of the Federal Open Market committee on Wednesday, it is anticipated that the US will not reduce its interest rates. Following the month of September when they started the cycle of reducing interest rates, this will be the first time that the US will not reduce its rates.

The performance in the US is in good state driven by slowdown in reduction in inflation and strong growth in employment levels. This is the reason why there is no need to reduce interest rates at this point of time. Also, the federal open market committee is quite vigilant about cutting rates due to unpredictability prevailing in the market about deregulation, stance on energy policies, US trade related policies, and initiatives taken by the government to improve their functioning.

Impact on commodities market
The oil recorded a fall in its first week of the year. The reason for this is the US’s warning to Russia regarding ending the war with Ukraine or else sanctions will be imposed on Moscow. It also ordered OPEC countries to reduce crude prices. The third biggest producer of Coffee is Colombia. As the sanctions are imposed on Colombia, it is yet to be seen what will happen to prices of coffee in the market.

While the gold in the market recorded a rise for the fourth consecutive week. In the previous week, the US President directed an order to establish a group of key agencies. This group will give recommendations and create policies and regulations related to cryptocurrency. It resulted in Bitcoin recording high in the previous week. Currently, bitcoin is registering a slight decline in the trend.