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Trump outlines the recipricol tariff plan on X

The “Big Balls” from the Trump presidency are being inflated and put in the air:

1. Cut out government waste and make government efficient
2. Get paid back for defense of other nations
3. Get countries to foot their own defense (BTW we have some defense contractors that you might want to do business with to do that)
4. If you tarff, VAT, subsidize we will charge the same
5. Protect our common borders and stop fentanyl
6. China and Russia let’s de-nuclearize – or stop nukes. We each have enough to blow each up anyway
7. China stop fentanyl
8. Bulldoze and rebuild Gaza

This article was written by Greg Michalowski at www.forexlive.com.

, Or about Europe without euro UK PM Starmer:

• Future of Ukraine is an existential issue for Europe
• It is pressing that they now share the burden.
• Europe must play its role
• There much be a US backstop

He concludes by saying it is the only way to deter Russia.

Meanwhlle Danish PM says:

• We must ramp up military preparedness
• Must avoid spread of Ukraine war to more countries
• When asked about troop deployments in Ukraine, says we are open to discussing many things that still need to be clarified
• I see no signs that the Russians want peace.
• Need discussion in EU about fiscal rules..
• This was an informal meeting not for decision-making.
• Russia is threatening all of Europe now, unfortunately
• A fast cease-fire can give Russia the chance to mobilize again and attack Ukraine or another country in Europe

Polish PM Tusk says

• All participants in meeting on Ukraine at similar opinions to Poland on key issues.
• Realize that transatlantic relations are in a new stage.
• European partners realize time is come for greater European defense capabilities and spending.
• Spending on defense will not be considered in excessive deficit procedure
• Europe and US should collaborate closely.
• There should be no discussions about Ukraine without Ukraine, or about Europe without Europe.
• There are billions of euros in EU that can be mobilized for defense.

EU

This article was written by Greg Michalowski at www.forexlive.com.

The USDJPY has completed an up-and-down lap that took the pair from the close on Friday Feb 7 at 151.39 to a high last week at 154.79 and back down to the 151.39 level. The price is stalling at a swing area between 151.20 to 151.40 which is ahead of the double bottom from the February 7 low.

If that double bottom can be broken, and stay broken, the door opens for more selling this week that could take the pair to the 50% of the move up from the September low. That level comes in at 149.22.

On the topside, if the low area for 2025 can stall the fall again, a rotation higher can be restarted. However, it would take a move above, the cluster of MAs including the 200-hour MA at 152.468, the 200 day MA at 152.675, the 100-hour MA at 152.93, and the 100 day MA at 153.126 to ultimately swing the bias back to the upside.

The video above outlines the levels in play and shows why.they are important in trading today.

This article was written by Greg Michalowski at www.forexlive.com.

Reuters is reporting that Taiwan is considering a $7– $10 billion arms purchase from the US.

IN the Trump administration, the theme so far is defense is available for sale, not just given away to maintain democracy.

This article was written by Greg Michalowski at www.forexlive.com.

ECBs Holzmann:

• There is some probability of a March rate cut
• He adds that decisions in favor of more cuts getting harder

The ECB has coverage from 4.4% to the current 2.9%. The ECB cut rates by 25 basis points on January 30.

This article was written by Greg Michalowski at www.forexlive.com.

European indices closed higher to kick off the new trading week, with Germany’s DAX and Italy’s FTSE MIB leading the gains.

The snapshot of the closing levels shows:

• German DAX, +1.26% to a new all-time high closing level
• France’s CAC, +0.03%. Highest close since May 2024.
• UK FTSE 100, +0.41%
• Spain’s Ibex, +0.47%. Highest closing level since June 2008
• Italy’s FTSE MIB, +0.92%. Highest closing level since December 2007

in other markets as European traders head for the exits:

• Crude oil +0.38% at $71
• Gold up $14.97 or 0.52% at $2897.01
• Silver up $0.15 or 0.44% at $32.26
• Bitcoin down -$700 at $95,441

This article was written by Greg Michalowski at www.forexlive.com.

The Daily Telegraph is reporting that US Pres. Trump is looking for payback from supporting Ukraine vs Russia:

• Trump’s $500B Demand on Ukraine: Trump has proposed a $500 billion “payback” from Ukraine, covering minerals, oil, gas, ports, and infrastructure, effectively granting the U.S. near-total economic control over Ukraine’s resources. A draft agreement, leaked from Kyiv, suggests 50% of revenues and new resource licenses would go to the U.S., along with a right of first refusal on exports.

• Kyiv’s Reaction & Concerns: The sweeping economic demands have caused panic in Ukraine, as they resemble war reparations imposed on defeated nations, surpassing those from WWII’s post-Versailles agreements. Ukrainian officials, while open to deals on rare earth minerals, were reportedly caught off guard by the harsh and binding nature of the contract.

• Strategic & Political Ramifications: Trump argues the U.S. has already spent $300B on Ukraine, though official numbers suggest $175B, with much spent domestically. He has warned Ukraine to accept the deal or risk being abandoned to Russia. Some see the move as a political ploy to reframe Ukraine as a financial asset rather than a burden, potentially ensuring future U.S. commitment.

• Feasibility of Ukraine’s Resource Wealth: While Ukraine is rich in lithium, rare earths, and shale gas, its actual economic potential is overestimated. Lithium prices have crashed, alternative battery technologies are emerging, and Ukraine’s shale fields face high extraction costs, limiting their strategic value.

• Ukraine’s Dilemma: Facing both Russian aggression and U.S. economic pressure, Zelensky is in a precarious position. With limited ability to meet Trump’s financial demands, he must choose between economic subjugation by an ally or continued military threats from Russia.

Sen. Lindsey Graham Munich at the Security Conference in Munich over the weekend that Ukraine should accept the deal saying: “If we sign this minerals agreement, Putin is screwed, because Trump will defend the deal,”

The revenue hunt is global and in full-court press mode.

Trump also wants Europe to foot the bill for their own defense which could be beneficial to US defense contractors. Meanwhile, at the same time US defense will go through its own rethink on defense spending.

His opening gambit to Russia and China is for a full de-nuclearization, arguing that the nations already have enough nuclear arsenal to destroy each other. Why spend more when the money can be used for other more important things.

There are big balls in the air, but the Trump theme will be “payback time”.

This article was written by Greg Michalowski at www.forexlive.com.

Keith Kellogg, the US special envoy to Ukraine says:

• Trip to Ukraine still being finalized
• When asked if US would provide backstop for European support, says “You take no options off the table”
• We are going to your discussion points from everyone
• No one will impose peace deal on Zelenskiy
• He and people of Ukraine will make that call.
• Our job is to facilitate security guarantees for Ukraine
• It is not reasonable to have everybody sitting at the table for Ukraine peace deal

Ukraine’s Zelenskiy criticized the US for speaking with Russia’s Putin before speaking with him.

This article was written by Greg Michalowski at www.forexlive.com.

Russia’s foreign policy aide Ushakov:

• Talks with US: Ushakov says Russian delegation has been businesslike mood
• US and Russia have yet to agree how to start Ukraine talks.
• US has yet to appoint its chief negotiator for the Ukraine talks.
• Says for now Russia and US are talking about bilateral talks

This will obviously take some time, but expect multiple moments whre headlines can be influential market moving events.

This article was written by Greg Michalowski at www.forexlive.com.

France’s finance minister Lombard:

• France is doing its job on different spending.
• The effort should be shared more equally among EU member states

This article was written by Greg Michalowski at www.forexlive.com.

• Securities Canadians C$ 3.77 billion versus C$17.65 billion last month
• Securities foreigners C$ 14.37 billion versus C$13.84 billion last month

Foreign investors increased their exposure to Canadian securities by $14.37 billion in December, mainly in debt securities. Meanwhile, Canadian investors acquired $3.77 billion of foreign securities, down from a $17.65 billion investment in November.

As a result, international transactions in securities generated a net inflow of funds of $10.6 billion in the Canadian economy in December. For the whole year of 2024, cross-border portfolio investment resulted in a net inflow of funds in the Canadian economy of $81.1 billion.

This article was written by Greg Michalowski at www.forexlive.com.

• Prior month 232.5K revised from 231.5K
• Housing starts for January 239.7K vs 252.5K annualized.
• Urban housing starts (pop. 10,000+): ↑ 3% to 220,643 units (seasonally adjusted annual rate).
• Rural housing starts: Estimated at 19,096 units (seasonally adjusted annual rate).

Other details:

• Housing starts trend (6-month avg): ↓ 2.5% to 236,892 units in January.
• Year-over-year actual housing starts (pop. 10,000+): +7% (15,930 units in Jan 2025 vs. 14,883 in Jan 2024).
• Montréal: +112% YoY in actual starts, driven by multi-unit projects.
• Vancouver: +37% YoY, also driven by multi-unit starts.
• Toronto: -41% YoY, due to a decline in multi-unit starts.

This article was written by Greg Michalowski at www.forexlive.com.