Individual Economists

NonFarm Payrolls, Confirmation Bias edition

The Big Picture -

 

 

Today’s (belated) nonfarm payroll report had a little something for everyone. Whether you are bullish or bearish, recession or expansion, MAGA or Never Trump, there were nuggets of data in the report for you.

My charge is to put this into a broader context minus the bias.

Let’s jump into the specifics: The Bureau of Labor Statistics saw upside surprises in Jobs, Wages, and Unemployment Rate, and downside surprises to hiring breadth1 and annual revisions.

– Total nonfarm payroll rose 130,000 in January (double consensus)

– Unemployment rate down to 4.3 percent to 7.4 million

– Average hourly earnings rose by 15 cents (0.4%) to $37.17

These figures are all higher than they were a year ago: the U3 jobless rate was 4.0%; the number of unemployed people was 6.9 million. Wages were also lower – $35.87 in January 2025.

The biggest surprise was the annual benchmark revision. 2025 was far worse than anyone previously thought. Total job creation for the year was slashed from 584,000 to just 181,000. That downward revision of 898,000 jobs (seasonally adjusted) was the second-largest negative adjustment on record, trailing only the 2009 financial crisis.

Here is what annual job revisions look like:

Average monthly revisions:
2025: -86k
2024: -94k
2023: -52k
2022: -8k
2021: +161k
2020: -29k

Totally revisions
2025: 1,208k to 181k (-1,027k overall)
2024: 2,589k to 1,459k (-1,130k)
2023: 3,140k to 2,515k (-625k)
2022: 4,619k to 4,526k (-93k)
2021: 5,331k to 7,268k (+1,973k)
2020: -8,893k to -9,246k (-353k)

The benchmark revisions also revealed that the labor market contracted in 2025 in four separate months—January, June, August, and October.

My confirmation bias?  It’s all about tariffs. They are the underlying reason the 2025 labor market is so weak.

If the chart at the top doesn’t seem to confirm that view, it only shows monthly changes in NFP — not the annual.My confirmation bias? The Tariffs are the underlying reason the 2025 labor market is so poor. If the chart at top does not seem to confirm that view, it only shows monthly changes in NFP — not the annual net gains. While 2025 and 2024 saw similar revisions, it was 2025 that was the had a weaker leabor economy.

Have a look at this chart via the Hiring Lab:

This chart inform us the further we get away from the giant 2020-21 fiscal stimulus, the more the economy softened. Not coincidentally, the weakening jobs market coincided with a decline in CPI inflation from its June 2022 peak.

While we have seen substantial revisions in each of the past 5 years, it’s telling that those were from much higher levels. This data confirms we are in a “low-hire, low-fire” environment; perhaps this is what’s contributing to the falling level of consumer sentiment.

But I am not in the recession camp (yet); I’d put the odds of a first-half 2026 contraction at about 25% and in the second-half of 2026 closer to 40%. Not a high probability of recession, but if we see further economic missteps, a recession might be the result. (I know, pretty wishy-washy).

My main takeaway is the labor market is increasingly showing cracks and signs of stress; it looks increasingly fragile, even as equity markets hit all-time highs.

~~~

These revisions to 2025 are legitimately alarming. Hiring breadth remains way too narrow. And the data itself is arguably less reliable than it used to be. Interpreting NFP reports has become more challenging than ever…

 

 

 

Previously:
IEEPA Tariffs Update (January 27, 2026)

Where is the Tipping Point? (September 22, 2025)

NFP Disappoint; Revisions Worse (August 1, 2025)

7 Increasing Probabilities of Error (February 24, 2025)

Risks & Opportunities of the New Administration (February 3, 2025)

 

 

__________

1. Beneath the headlines, the breadth of hiring was very alarmingly narrow. Of those 130,000 new jobs, health care and social assistance accounted for 95% of the total.

 

 

The post NonFarm Payrolls, Confirmation Bias edition appeared first on The Big Picture.

Elon Musk Vows To Establish A Moon City Within 10 Years

Zero Hedge -

Elon Musk Vows To Establish A Moon City Within 10 Years

Authored by Steve Watson via Modernity.news,

Elon Musk and SpaceX are charting a bold new course for American space dominance, prioritizing a thriving city on the Moon to shield civilization from earthly perils like natural disasters or geopolitical chaos. 

With frequent launches and rapid iteration cycles, the Moon offers a practical launchpad for multi-planetary life, free from the constraints of overregulated space agencies that have stalled progress for decades. 

SpaceX’s announcement comes amid a renewed push for lunar exploration, where private enterprise is outpacing sluggish international efforts. 

According to reports, the company aims to establish a “self-growing city” on the Moon within a decade, leveraging the proximity for hundreds of test cycles that Mars’ distant orbit simply can’t match. 

Musk elaborated on X, stating, “SpaceX has already shifted focus to building a self-growing city on the Moon, as we can potentially achieve that in less than 10 years, whereas Mars would take 20+ years.” 

He emphasized the logistical edge: launches to the Moon every 10 days with a two-day trip, versus Mars’ 26-month windows and six-month journeys. 

This allows for swift advancements in life support, construction, and energy systems—key to breaking free from Earth’s vulnerabilities.

The shift doesn’t abandon Mars entirely. Musk noted that SpaceX will still pursue a long term plan for a Red Planet city, but the Moon takes precedence as a faster safeguard for civilization. 

“The overriding priority is securing the future of civilization and the Moon is faster,” Musk posted. 

This pragmatic approach exposes the folly of pie-in-the-sky promises that have dominated space policy, often mired in wasteful spending and political gamesmanship.

Musk also teased democratized space travel:

This development echoes broader frustrations with establishment space programs. NASA’s Artemis missions, while ambitious, are bogged down by delays and ballooning costs.

SpaceX, unencumbered by such bureaucracy, is poised to deliver tangible wins, potentially including lunar data centers powered by constant solar energy, boosting U.S. tech supremacy.

By prioritizing the lunar city, SpaceX advances an independent, resilient humanity—free from reliance on fragile international alliances that often prioritize control over innovation.

Your support is crucial in helping us defeat mass censorship. Please consider donating via Locals or check out our unique merch. Follow us on X @ModernityNews.

Tyler Durden Wed, 02/11/2026 - 14:00

Democratic Governors Threaten Boycott Of White House Gathering

Zero Hedge -

Democratic Governors Threaten Boycott Of White House Gathering

Authored by Savannah Hulsey Pointer via The Epoch Times,

Democratic governors are threatening to boycott an anticipated meeting at the White House amid news that the administration was not inviting at least some of their party’s governors.

In a Feb. 10 letter, a group of 18 Democratic governors said:

“If the reports are true that not all governors are invited to these events, which have historically been productive and bipartisan opportunities for collaboration, we will not be attending the White House dinner this year.”

“Democratic governors remain united and will never stop fighting to protect and make life better for people in our states,” read the letter, obtained by the Associated Press.

The governors were set to meet at the White House on Feb. 20 as part of an annual gathering, which coincided with the National Governor Association’s Winter Meeting this year. The letter followed a statement from Oklahoma Gov. Kevin Stitt, who chairs the association, that the White House intended to limit invitations to only Republican governors.

The association said on Feb. 6  that it would no longer endorse the meeting, citing concerns about limited invitations. It’s unclear exactly how many Democratic governors were uninvited by the White House.

“These are White House events and the President reserves the right to invite whomever he wants,” a White House official said in an email to The Epoch Times.

“Many Democrats were invited to dinner at the White House, and others were not.”

When asked about the association’s decision, White House press secretary Karoline Leavitt said in a Feb. 10 press briefing that the president “can invite whomever he wants to dinner and events here at the White House.”

“He welcomes all those who received an invitation to come and if they don’t want to, that’s their loss,” Leavitt said.

Her comments came after Maryland Gov. Wes Moore announced that he had been “uninvited” from the association dinner at the White House.

Moore voiced his frustration in a Feb. 8 statement, but said:

“As Governor of Maryland and Vice Chair of the [National Governors Association], my approach will never change: I’m ready to work with the administration anywhere we can deliver results.”

“Yet, I promised the people of my state I will work with anybody but will bow down to nobody. And I guess the President doesn’t like that,” he said.

Illinois Gov. JB Pritzker announced on Feb. 10 that he was standing with Moore and Colorado’s Gov. Jared Polis and would not attend the dinner. He also called on his Republican colleagues to do the same.

Historically a bipartisan event, the yearly meeting has been labeled “an important tradition” by the governor’s association.

“NGA leadership has decided that this will not be an NGA event, and no NGA resources will be used to support this activity,” Brandon Tatum, the CEO of the National Governors Association (NGA).

“We have also learned that the President may not to [sic] invite all Governors to the White House dinner. To disinvite individual Governors to the White House sessions undermines the meaning behind this critical tradition.”

Tyler Durden Wed, 02/11/2026 - 13:25

Dreadful 10Y Auction Sees Biggest Tail Since 2024, Foreign Demand Slides

Zero Hedge -

Dreadful 10Y Auction Sees Biggest Tail Since 2024, Foreign Demand Slides

After yesterday's mediocre 3Y auction (which saw a drop in foreign demand offset by record direct bid), moments ago the Treasury concluded the sale of 10Y benchmark paper, and despite a cheerful preview by the Bloomberg MLIV team (which appears to be wrong every time it tries to handicap the outcome), today's auction was absolutely dreadful.

Starting at the top, the high yield of 4.177% was almost unchanged from last month's 4.173% and the 4.175% the month before. More importantly, it tailed the When Issued 4.163% by 1.4bps, the biggest tail since August 2024.

The bid to cover dropped to 2.388, the lowest since August 2025. It would have been even worse had the Fed's SOMA not tendered for $11.9BN of the issue (up from $11.35BN in January).

The internals were also ugly, as Indirects slumped to just 64.5%, the lowest since August 2025 (and clearly well below the six month average of 70.2%). And with Directs also sliding to 22.1% from 24.5% in January (a far cray from yesterday's record Directs), Dealers were left holding 13.54%, the most since - you guessed it - August 2025.

Overall, this was a very disappointing 10Y auction, easily the worst refunding in over a year, and subjectively the ugliest sale of benchmark paper since 2024. And that explains why despite today's latest slam in momentum which is crushing bitcoin and high beta names, the 10Y has since rebounded and rose 2bps from 4.15% to 4.17% after the ugly auction. 

Tyler Durden Wed, 02/11/2026 - 13:24

Mama's Boy? Sam Bankman-Fried, Represented By His Mother, Files For New Trial In FTX Implosion Case

Zero Hedge -

Mama's Boy? Sam Bankman-Fried, Represented By His Mother, Files For New Trial In FTX Implosion Case

Sam Bankman-Fried has renewed his effort to overturn his FTX fraud conviction, filing a request for a new trial in federal court through a motion submitted by his mother in New York, according to Coindesk and Yahoo News. 

The former crypto exchange chief, now serving a 25-year prison sentence, argues that recently uncovered evidence and missing testimony from earlier proceedings justify reopening his case. The filing points in part to the absence of former FTX executive Ryan Salame, who later faced his own criminal charges. Salame had previously said he believed his cooperation with prosecutors would protect his wife, Michelle Bond, who was later charged over alleged illegal campaign donations.

The 35-page request was submitted as a “pro se” motion, meaning Bankman-Fried is currently acting as his own attorney.

At the same time, he has launched a renewed public campaign on X, using posts to support his push for a retrial. In those messages, he portrays himself as a victim of politically driven “lawfare,” accusing prosecutors and judges of bias and retaliation against FTX executives. Independent reviews, however, have found that several of his claims conflict with court records.

Among them, Bankman-Fried has suggested that both he and former President Donald Trump were placed under comparable gag orders. Court documents show the situations were different: Trump’s restrictions stemmed from separate cases, while Bankman-Fried’s order followed repeated violations of pretrial conditions.

He has also revived his long-standing argument that FTX “was always solvent” and that customer funds were never stolen. That position was rejected at trial, where jurors concluded that client assets were misused and misrepresented. Federal courts have since ruled that later asset recoveries do not prove the company was solvent at the time of the misconduct.

In another claim, Bankman-Fried said Trump “fired” one of his prosecutors, Danielle Sassoon. Public records indicate she resigned over an unrelated Justice Department dispute and was not dismissed in connection with the FTX case.

Earlier appeals alleging an unfair trial were met with skepticism from judges last November, who said solvency was not the central issue in the verdict.

“Part of the government's theory of the case is that the defendant misrepresented to investors that their money was safe, was not being used in the way that it was the government claims and the jury convicted it was, in fact, used,” said Circuit Judge Maria Araújo Kahn.

Bankman-Fried has also claimed he was targeted for his political views, crypto lobbying, and donations to Republicans. Courts have found no evidence supporting that argument, noting that the case relied on documents, internal messages, and witness testimony. Records also show he personally donated to Joe Biden’s campaign.

Meanwhile, President Donald Trump has said he would not consider clemency for Bankman-Fried. Despite this, the former executive continues to argue online that his conviction was politically motivated as he presses for another chance in court.

Tyler Durden Wed, 02/11/2026 - 13:05

The Trump Admin Just Won The Mask Decision... Now It Should Appeal

Zero Hedge -

The Trump Admin Just Won The Mask Decision... Now It Should Appeal

Authored by Jonathan Turley,

California Gov. Gavin Newsom has become increasingly Orwellian in his declarations of success.

Last week, Newsom was proclaiming the great success of his high-speed train to nowhere – a project delayed by decades, reduced to a fraction of the original plan, and set to cost tens of billions over budget.

This week, he is proclaiming victory after a court struck down his signature law requiring federal agents to unmask.  The preliminary injunction issued Monday by Senior status Judge Christine Snyder against California’s No Secret Police Act was a victory for the Trump Administration.

However, it should still appeal Judge Snyder’s flawed decision. In other words, the Administration won for the wrong reason.

Snyder, an Obama appointee, faced two laws passed in September 2025 with great fanfare in California: the Secret Police Act and the No Vigilante Act. As their titles indicate, they are not serious efforts at legislating but unconstitutional acts designed to pander to the politics of the moment.

In the oral argument, some of us were concerned over the curious position staked out by Judge Synder.

DOJ counsel Tiberius Davis tried to explain how such state laws usurp federal authority and violate the Supremacy Clause.

He drove that point home by asking “Why couldn’t California say every immigration officer needs to wear pink, so it’s super obvious who they are? The idea that all 50 states can regulate the conduct and uniforms of officers … flips the Constitution on its head.”

That would seem an unassailable point, but not to Judge Synder. 

She asked, “Why can’t they perform their duties without a mask? They did that until 2025, did they not? How in the world do those who don’t mask manage to operate?”

I remarked at the time that the court seemed to miss the central point.

The question is not whether the federal government can continue to function under limitations imposed by various states, but whether those states have the authority to impose such conditions.

I do not believe that they do.

Nevertheless, Judge Synder came to the right conclusion for the wrong reason.

She enjoined the mask requirement, but did so on the basis that California exempted its own officers.

“Even though the United States has failed to demonstrate that the facial covering prohibition of the No Secret Police Act unduly interferes with federal functions, the court acknowledges that it is nonetheless an incidental regulation on law enforcement officers. The intergovernmental immunity doctrine prohibits imposing such a regulatory burden, albeit minimal and incidental to operations, in a discriminatory manner against the federal government.”

By adopting this narrow basis, the court was able to enjoin the No Secret Police Act while rejecting an injunction against the No Vigilantes Act and certain other provisions of the No Secret Police Act.

I think the court is wrong and should be reversed.

Snyder rejected the rationale of the federal government that these masks are being used to protect ICE agents from “doxing,” even though various agents have been targeted and threatened. Synder waved off the concern and said that the government had not shown by such masking is essential to carrying out such functions. Her opinion relies on broad, unsupported assumptions. Because officers are facing these security concerns, she concludes that they will continue regardless: “Security concerns exist for federal law enforcement officers with or without masks. If anything, the court finds that the presence of masked and unidentifiable individuals, including law enforcement, is more likely to heighten the sense of insecurity for all.”

It is a bizarre rationalization. The court is simply imposing its judgment on what will make officers safer, rather than emphasizing whether these agencies have the discretion to make such judgments in the execution of federal law. Yet the court still enjoins the law because it discriminates between federal and state officers. (Not surprisingly, Democratic state Sen. Scott Wiener, the author of the mask ban, immediately declared that they would amend the law to add  state law enforcement).

The Court then upheld a state requirement that federal officers cannot conceal their identities in a discussion more befitting a legislative committee than a court:

“The Court finds that these Acts serve the public interest by promoting transparency, which is essential for accountability and public trust. Moreover, the Court finds no cognizable justification for law enforcement officers to conceal their identities during their performance of routine, non-exempted law enforcement functions and interactions with the general public.”

In my view, Judge Snyder twists the analysis into knots to try to preserve as much of these laws as possible while giving the Administration the minimum level of deference.

Under the intergovernmental immunity doctrine, the Supreme Court has mandated in cases such as McCulloch v. Maryland, 17 U.S. 316, 317 (1819), that “the states have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control, the operations of the constitutional law enacted by congress to carrying into execution the powers vested in the general government.” A state cannot intrude into this authority absent a “clear and unambiguous” authorization from Congress, Goodyear Atomic Corp. v. Miller, 486, U.S. 174, 180 (1988).

Snyder finds that the California laws discriminate but do not constitute direct regulation of the federal government. She does so through a “functionalist” approach that avoids bright lines of supremacy. She simply dismisses the objections, saying the federal government has not shown that wearing masks is “essential” to carrying out these functions. Consider that approach for a second. A wide range of state regulations on federal officers could be deemed permissible, since federal officers can still functionally carry out arrests. States could dictate everything from uniform requirements, such as masks, to vehicle conditions to verbal commands or warnings.

The opinion is spotty in its analysis and sweeping in its implications. It is, in my view, ripe for reversal either before the United States Court of Appeals for the Ninth Circuit or the Supreme Court.

Here is the opinion: a 30-page decision: United States v. California

Tyler Durden Wed, 02/11/2026 - 12:45

Russia Will Stick To Nuclear Arms Limits If US Does The Same

Zero Hedge -

Russia Will Stick To Nuclear Arms Limits If US Does The Same

One of the globe's biggest developing stories this month, but which has been largely underreported in mainstream TV networks and other press, is the collapse of New START - the last major nuclear arms control treaty between Russia and the United States.

Russian Foreign Minister Sergei Lavrov said Wednesday that Moscow will in good faith stick to the nuclear limits outlined in the now-expired arms control treaty, provided Washington does the same.

via Kremlin/Brookings

It expired earlier this month after Washington declined to respond to President Vladimir Putin’s proposal for a one-year extension capping both sides' nuclear arsenals.

The Trump admin has long wanted a more comprehensive agreement which brings China's arsenal into the scope; however, there's been no formal process on this front with Beijing or Moscow.

Lavrov said Russia has no intention of rapidly expanding or deploying additional weapons, clarifying remarks from his ministry last week that suggested Moscow no longer considered itself bound by the treaty.

"We proceed from the fact that this moratorium, which was announced by our president, remains in effect, but only while the United States does not exceed the outlined limits," Lavrov told Russia's parliament.

Some key aspects to the treaty have gone unobserved for some time, especially the regimen of mutual nuclear site inspections.

President Trump has in the recent past called New START "badly negotiated" and said it "is being grossly violated. He has in mind Russia having blocked inspections of its nuclear facilities under the treaty framework in 2023, as tensions with Washington escalated over the proxy war in Ukraine.

Moscow has in turn complained that Washington is the chief violator, and that it now refuses to respond to Putin's overture to extend it by one year, while a more comprehensive and extended deal is negotiated.

Last week, Secretary of State Marco Rubio gave insight into why the White House has let New START expire: "Obviously, the president's been clear in the past that in order to have true arms control in the 21st century, it's impossible to do something that doesn't include China because of their vast and rapidly growing stockpile," he explained.

Tyler Durden Wed, 02/11/2026 - 12:25

Data Centers Are A Repeat Of History In PA's Coal Region

Zero Hedge -

Data Centers Are A Repeat Of History In PA's Coal Region

Authored by Jake Wynn via RealClearPennsylvania,

By the 1920s, Pennsylvania’s anthracite coal region was already living with the consequences of decisions made far from its towns and patch villages. The industry that had built the coal towns and cities of eastern Pennsylvania was no longer organized around mineworkers or the communities they lived in, but around efficiency, scale, and centralized control. Mechanization, electrification, and consolidation were already reshaping daily life above and below ground.

Coal companies framed these changes as modern necessities. In 1929, the president of the Philadelphia & Reading Coal & Iron Company (P&RC&I) explained declining production not as a crisis of employment, but as a problem of outdated infrastructure. The solution, Andrew J. Maloney argued, lay in “more flexibility in our producing units,” achieved through “the construction of two modern centralized breakers to electrify the mines tributary thereto.”

The new Locust Summit and St. Nicholas district breakers, authorized just before the stock market crash of 1929, embodied that logic. Electricity would streamline production, while centralization would reduce costs. Smaller collieries – especially those farther from rail lines or markets – would simply disappear under this scheme.

They did. As mammoth central breakers came online, operations of the P&RC&I in places like Tower City, at the western edge of Schuylkill County, and other outlying communities were shuttered. Instead of work migrating slowly and evenly toward the centralized facilities, jobs vanished completely in many communities.

According to historians Thomas L. Dublin and Walter Licht in their 2005 book, Face of Decline, about this topic, Mahanoy City saw six of seven collieries closed. In Shamokin, four of five mines stood idle.

They also noted that in Lykens, the town’s lone mine, the Short Mountain Colliery, was shut down entirely. The promise of “efficiency” translated into widespread unemployment across the anthracite coal counties. The coming of the Great Depression worsened the matter, as companies like the P&RC&I had overleveraged themselves constructing the massive centralized breakers, forcing more closures to cut costs to meet payments on their debt.

Strip mining deepened the rupture. It required fewer workers and moved relentlessly across landscapes that had once supported deep mines and densely packed communities. Combined with centralization, it ensured that even when coal was extracted, it no longer sustained local labor at the scale needed for deep mining operations. By the early years of the Great Depression, the anthracite economy had collapsed into something unrecognizable just a decade earlier.

This situation started a pattern that saw the sudden collapse of the economy in communities all over the coal region. In the decades that followed, attempts at revitalization and to find new investment largely failed to replace what coal had done to build these communities. People began to leave the region. Some found new purpose: Mauch Chunk for example re-invented itself as Jim Thorpe, Pennsylvania in the 1950s and leaned into tourism to replace the industries that once built the town.

But for most communities, that struggle for purpose and a stable economy went on into the late 20th and early 21st centuries. New investment did come from companies and corporations seeking cheap land and ready access to interstate highway corridors with easy access to metropolitan areas like Philadelphia and New York. Since the early 2000s, warehouses and fulfillment centers have become essential to the coal region’s economy.

Yet now, a century after the beginning of the end of the namesake industry in the coal region, there are some unsettling parallels to the past.

The warehouses and fulfillment centers sitting on reclaimed mine land are often the largest employers in many coal region communities. Once again, outside capital has arrived with promises of stability and modernity. As happened 100 years ago, efficiency is the guiding principle. Automation and artificial intelligence already threaten to reduce these jobs, just as electrified mines, strip mining, and centralized breakers once did. Proposed data centers – vast, energy-intensive, and labor-light – signal another shift toward consolidation without community security.

History offers no easy answers nor perfect comparison, but it can offer some past examples in strange new times.

When jobs disappear suddenly and at scale, the consequences echo for generations. The collapse of large-scale mining in the 1920s and 1930s reshaped the coal region for the next hundred years. The choices made today – about automation, land use, and whose interests are prioritized – will shape the next century just as profoundly.

Tyler Durden Wed, 02/11/2026 - 12:05

Duffy: FAA And Military "Acted Swiftly" To Combat "Cartel Drone Incursion" On US Border

Zero Hedge -

Duffy: FAA And Military "Acted Swiftly" To Combat "Cartel Drone Incursion" On US Border

Update (0950ET):

Transportation Secretary Sean Duffy confirmed on X that the Federal Aviation Administration and the Department of War "acted swiftly to address a cartel drone incursion" at or near the border town of El Paso.

"The threat has been neutralized, and there is no danger to commercial travel in the region. The restrictions have been lifted, and normal flights are resuming," Duffy said.

Our assessment this year is that next-gen counter-drone security will be an emerging theme for guarding high-value assets such as stadiums, government buildings, data centers, and, increasingly, parts of the border (see the report).

*   *   * 

Update (0925ET):

The Federal Aviation Administration announced moments ago that the Notice to Airmen (NOTAM) across the border town of El Paso and a large area of southern New Mexico west of Santa Teresa has been lifted.

The NOTAM that halted all commercial, cargo, and general aviation flights across the region was issued overnight.

CNN reporter Pete Muntean cited an FAA source who "tells me the El Paso flight ban was driven by military operations from Biggs Army Air Field at Fort Bliss. The FAA acted after the Defense Department could not assure civilian flight safety."

Another reporter, this one with Reuters, said, "Airline sources told Reuters the grounding of flights in El Paso was believed to be tied to the Pentagon's use of counterdrone technology to address Mexican drug cartels' use of drones on the U.S.-Mexico border."

At this point, what exactly happened in the border town or nearby remains unclear.

What has our attention is the alleged use of counter-drone technology along the border, reportedly aimed at disrupting Mexican drug cartels' growing reliance on drones.

*   *   * 

The Federal Aviation Administration issued a Notice to Airmen (NOTAM) late Tuesday, closing the airspace above the U.S. border town of El Paso and a large area of southern New Mexico west of Santa Teresa for 10 days. The notice suspends all commercial, cargo, and general aviation flights in the affected area.

The reason for the NOTAM is listed on the FAA website as "Special Security Reasons." No further explanation was provided, but given that El Paso sits on the U.S. border with Mexico and the Trump administration is targeting drug cartels across the Western Hemisphere, the closure could be tied to a new perceived threat - or impending US military operation. 

The NOTAM took effect at 11:30 p.m. Mountain Time Tuesday, and expires at 11:30 p.m. Feb. 20, or next Friday.

The El Paso city government issued an advisory earlier that read, "The FAA, on short notice, issued a temporary flight restriction halting all flights to and from El Paso and our neighboring community, Santa Teresa, NM. The restriction prohibits all aircraft operations (including commercial, cargo and general aviation) and is effective from February 10 at 11:30 PM (MST) to February 20 at 11:30 PM (MST)."

Local newspaper El Paso Matters points out:

Closing off airspace over a major U.S. city is a rare action, and officials with the Federal Aviation Administration didn't immediately respond to questions from El Paso Matters on the reasons for the action.

A person familiar with the notices, who asked not to be identified because they weren't authorized to speak publicly, said the action to close airspace over a major U.S. city for security reasons over an extended period hasn't happened since immediately after the terror attacks of Sept. 11, 2001.

Our assessment is that this unusually broad NOTAM over the border town reflects a time-bound, high-issue security concern rather than routine airspace management. It comes as the Trump administration repostures the military to secure the Western Hemisphere, including the early January capture of Nicolas Maduro and ongoing kinetic strikes against suspected narco trafficking vessels.

One of the consequences of the Trump administration blowing up narco boats and dismantling cartel command-and-control nodes is an increased risk of retaliatory threats against the U.S. 

Tyler Durden Wed, 02/11/2026 - 12:00

Somali Fraud: Three Key Takeaways From Tuesday's Senate Hearing

Zero Hedge -

Somali Fraud: Three Key Takeaways From Tuesday's Senate Hearing

Authored by Janice Hisle via The Epoch Times (emphasis ours),

The magnitude of Minnesota’s Somali welfare-fraud problem has only begun to surface - and it is tied to other fraud in ways that many Americans do not realize, according to statements made during a Feb. 10 Senate hearing in Washington.

Sen. John Cornyn speaks on Capitol Hill on Oct. 14, 2020. Susan Walsh-Pool/Getty Images

A subcommittee focused on immigration and border security held a two-hour hearing titled, “Somali Fraud in Minnesota—The Tip of the Iceberg.” Both houses of Congress are exploring the problem and its possible remedies.

Two witnesses who testified are former State Department employees who worked abroad as foreign service officers. Both men reported seeing weaknesses in America’s systems for verifying backgrounds and identities of foreigners who apply for U.S. immigration benefits.

Committee chair Sen. John Cornyn (R-Texas), announced he is preparing legislation to stop fraudsters from sending stolen U.S. taxpayer dollars overseas with no meaningful scrutiny.

The committee’s ranking member, Sen. Alex Padilla (D-Calif.) said, “No one is here to defend fraud.” But he accused Senate Republicans of “choosing to point to a few isolated incidents and using them to cast suspicion on entire communities.”

1. The ‘Tip of the Iceberg’

Prosecutors estimated that fraudsters bilked $9 billion or more from 14 of the state’s Medicaid programs since 2018—and “credible reports” indicate some Minnesota officials knew about fraud dating to 2011 yet allowed it to persist, Cornyn said.

The Justice Department has charged 98 defendants, 85 of whom are of Somali descent, in Minnesota fraud cases; 64 have been convicted. Prosecutors have issued more than 1,750 subpoenas, executed more than 130 search warrants and conducted more than 1,000 witness interviews, he said.

Despite those large numbers, Cornyn said, “This recent episode, unfortunately, appears to be just the tip of the iceberg.”

The depth of Minnesota fraud is still being uncovered—and more schemes are now coming to light in states such as California.

Sen. Amy Klobuchar (D-Minn.) said she has previously asked for more resources for the U.S. Attorney’s Office in Minnesota, which has brought the federal fraud charges.

Recently, 14 assistant U.S. attorneys left that office, Klobuchar said, citing news accounts indicating those prosecutors resigned over a controversy related to investigating the death of 37-year-old Renee Good, who was fatally shot by an Immigration and Customs Enforcement agent on Jan. 7.

“If we’re going to go after fraud, losing that talent is a huge problem,” she said.

Nationally, the Government Accountability Office estimates that between $233 billion and $521 billion are lost each year to “fraud and improper payments of federal benefits and other public funds,” Cornyn noted, repeating the numbers twice for emphasis.

Besides inflicting financial damage, fraud “directly affects the safety and security of Americans,” Cornyn said, adding that “much of the fraud is committed by aliens—many of them criminal aliens—and we don’t know what they’re doing with those stolen funds.”

Across America, illegal immigrants reap $8 billion in Medicaid fraud and $3 billion in earned-income tax credits per year, according to 2023 estimates from the Federation for American Immigration Reform (FAIR), Cornyn said.

2. Illegal Immigration Tied to Less-Obvious Fraud

Matt O’Brien, a former immigration judge who serves as FAIR’s deputy executive director, testified that many Americans do not realize that “immigration-related fraud represents a large and largely unacknowledged share” of the nation’s fraud losses.

That type of fraud includes “crimes committed to maintain life in the United States when someone lacks lawful status,” he said. Examples include identity theft, false U.S. citizenship claims, Social Security fraud, and tax fraud.

Migrants, facing pressure to succeed, “recognize opportunities created by weak oversight,” O’Brien said.

They also “may rationalize fraudulent conduct based on ideological narratives common in their home countries.”

“The result is widespread, repeated fraud that touches nearly every part of our government systems,” he said.

Yet data about immigration-related fraud is “remarkably scarce,” O’Brien said, noting the best figures are probably two decades old.

In addition, there is no “coordinated federal strategy” for detecting and prosecuting immigration fraud. Those responsibilities are “scattered across” state agencies and at least seven federal agencies.

Simon Hankinson, a senior research fellow who focuses on immigration issues for The Heritage Foundation, testified that in his former work as a foreign service officer, he was “lied to many times a day about every aspect of applicants’ cases.”

A U.S. consulate officer who interviews applicants serves as “the first line of vetting;” the next step involves checking U.S. databases for records about the person. But, he said, if the applicant comes from a nation that lacks accurate records or is unwilling to share the data, the records check is useless.

“Typically, the more corrupt and poor a country is, the more visa fraud,” he said, adding, “Somalia is as poor and corrupt as countries get.”

His former duties included supervising consular operations in Somalia. There, he routinely saw fraudulent marriage claims and unauthorized letters of support from the Somali government, among other falsifications.

Crime and corruption “seem to follow immigrant populations into host countries, at least in the first generation,” Hankinson said.

3. Low-Tech and High-Tech Solutions

Another former foreign service officer, Phillip Linderman, a board member of the Center for Immigration Studies, said it is a “supreme challenge” for consular officers to properly vet documents. And, he said, “there were always powerful voices in Washington constantly insisting that all visas be issued—and fast.”

A simple policy change could be effective, he said. “U.S. policy should curtail visa services in those countries that tolerate or are complicit in high levels of fraud,” Linderman said.

The State Department already tracks which countries have high visa fraud rates. But officials in that agency keep those records to themselves and “do almost nothing with them,” he said. “This is a big mistake.’

He urged the State Department to use that information in diplomatic relations with those countries.

Linderman also encouraged agencies to “apply the growing power of artificial intelligence and to look at fraud patterns in all immigration benefits—from visas all the way through to naturalization.”

In general, immigration benefits should be denied for people “whose identities we cannot verify and whose documents are unreliable and whose criminal records cannot be checked adequately,” he said.

Cornyn suggested both high-tech and low-tech measures.

“We can invest in fraud prevention and detection mechanisms ... [and] require agencies to require biometric identification,” Cornyn said, before any applicant receives government money or benefits.

“Furthermore, we can require automated and recurrent identity verification, random audits and in-person identity verification” for programs that receive public funds, he said.

As a low-tech measure, Cornyn said he will propose the “Stop Somali Cash Fraud Act,” which addresses a problem that Homeland Security highlighted recently.

During the past two years, $700 million in cash—packed in suitcases—“has been flown out of the Minneapolis airport,” Cornyn said, noting many of those funds were “tied to Somali couriers.” Homeland Security officials said that practice has occurred for nearly a decade, Cornyn said.

That money “could be used to fund Somali terrorist organizations like al-Shabaab,” Cornyn said. The Treasury Department began investigating that possibility in December.

Under Cornyn’s proposal, noncitizens would be required to  disclose the source of large sums of cash they intend to transport overseas. They also would need to give additional background details 72 hours prior to scheduled air travel, which would give officials time to investigate.

David Bier, director of immigration studies at the Cato Institute and a former policy adviser for a Republican congressman, agreed with Democrats who said Somalis and other immigrants were being unfairly characterized.

After leaving “terrible conditions,” many immigrants start businesses and otherwise contribute to society, he said.

Bier proposed a sweeping change: “Congress should end the broken welfare systems—namely the oversight-free aid to states that led to all the fraud in Minnesota.”

Tyler Durden Wed, 02/11/2026 - 11:30

Trump Holds Off On Option To Seize Iranian Tankers, Fearing Sharp Oil Rise

Zero Hedge -

Trump Holds Off On Option To Seize Iranian Tankers, Fearing Sharp Oil Rise

Another big piece of leverage that Washington is holding over Tehran is the potential seizure of Iranian oil tankers. The US intercepting and boarding tankers on the high seas has been a trend related to Venezuela of late, as well as Russia's so-called dark fleet, ratcheting tensions with Moscow.

But President Trump is said to be holding off for now when it comes to the Iranians, as the process of indirect negotiations based in Oman plays out, also as Israel's Netanyahu is received at the White House on Wednesday.

Fresh reporting in The Wall Street Journal indicates "Trump administration officials have discussed whether to seize additional tankers involved in transporting Iranian oil but have held off, concerned about Tehran’s near-certain retaliation and the impact on global oil markets, U.S. officials said."

File image via Strauss Center

But there have been US naval interdictions involving Iranian energy related to the Venezuela blockade: "The U.S. has seized several ships that have carried Iranian oil as part of its two-month-old blockade of sanctioned tankers serving Venezuela," continues WSJ. "The tankers, which make up the so-called shadow fleet, help transport illicit oil from numerous sanctioned countries to China and other buyers."

The report notes that "A move by the U.S. to block other sanctioned ships from loading oil in Iran would squeeze Tehran's main source of revenue, expanding the aggressive strategy the White House put in place in December in the Caribbean."

So there remains this big card to play, but Trump is so far hesitant on concerns of rapidly driving up the price of oil.

Sanctions have been slapped on Iranian tankers, but action has yet to follow, as WSJ explains further:

But the option of stopping tankers, one of several the White House has been debating to coerce Tehran to reach a deal restricting its nuclear program, faces many obstacles, some of the officials said.

Iran is likely to respond to a stepped-up U.S. crackdown by seizing tankers carrying oil from U.S. allies in the region or even by mining the Strait of Hormuz, the narrow exit from the Persian Gulf through which as much as 25% of the world’s petroleum supply passes. Either move is likely to drive up oil prices sharply, risking a political firestorm for the White House.

More than 20 ships that transport Iranian oil have been sanctioned by the Treasury Department this year, making them possible seizure targets, officials say.

This would likely be a next big step of escalation Washington has in its pocket, before any potential US military (or Israeli) action targeting Tehran.

Despite the recent weeks of alarming Iran-related headlines, oil prices have by and large not reacted dramatically, given reports that Trump favors negotiated settlement to Iran's nuclear program.

Vice President JD Vance has also clarified the ball is in Iran's court, and that talks are still ongoing:

Iran meanwhile has made clear that its missile program is not up for negotiation, despite Washington's insistence that this be on the table.

Ali Shamkhani, an adviser to Iran’s supreme leader, reiterated Wednesday that missile capabilities are "non-negotiable" but that Tehran is open to nuclear limits in exchange for sanctions relief.

Tyler Durden Wed, 02/11/2026 - 11:00

US Unexpectedly Adds 130K Jobs In January, Most Since 2024, Amid Massive Negative Revisions

Zero Hedge -

US Unexpectedly Adds 130K Jobs In January, Most Since 2024, Amid Massive Negative Revisions

Ahead of today's jobs report, the Trump admin unleashed a full court press to warn markets about what was expected to be a very weak numbers, with Peter Navarro saying "we have to revise our expectations down significantly for what a monthly job number should look like" and Kevin Hassett told CNBC on Monday to "expect slightly smaller job numbers" and that "one shouldn't panic" if the labor data comes in weak. That's also why the whisper number ahead of today's jobs print was well below the consensus, at 35K vs 65K median consensus. 

And so with markets and traders fully expecting a ugly print - with Bloomberg's chief economist looking for a 0 January print - the BLS decided to shock everyone, and reported than in January the US added 130K jobs, double the 65K median estimate and up from a downward revised December print of 48K (vs 50K previously). This was also the highest monthly jobs increase since December 2024.

While today's number was double the median consensus, here is some additional color: at 130K, the forecast was higher than 79 out of 80 forecasts, with just Citigroup's 135K forecast higher.

That said, expect today's number to be revised sharply lower last month: that's because the November report was revised down by 15,000, from +56,000 to +41,000, and the change for December was revised down by 2,000, from +50,000 to +48,000. With these revisions,  employment in November and December combined is 17,000 lower than previously reported. It gets worse though, with 25 of the past 26 jobs reports revised lower. 

There is another reason why today's report will be revised away: while the seasonally adjusted change was a stronger than expected 130K, the unadjusted was a negative 2.649 million. That means that the entire delta in today's "surprise beat" was due to seasonal  adjustments. 

The positive surprise in the payrolls number also translated into improvement in the unemployment rate, which unexpectedly dropped to 4.3%, down from 4.4% in December where it was expected to stay. Among the major worker groups, the unemployment rate for teenagers declined to 13.6 percent in January. The jobless rates for adult men (3.8 percent), adult women (4.0 percent), and people who are White (3.7 percent), Black (7.2 percent), Asian (4.1 percent), or Hispanic (4.7 percent) all posted modest improvements in recent months. 

Tied to this, the labor force participation rate rose to 62.5%, up from 62.4% and fractionally better than the expected unchanged print. 

There was more positive surprises: in January, hourly earnings rose 0.4% MoM, up from a downward revised (of course) 0.1% in January and above the 0.3% estimate. On a YoY basis, this translated to a 3.7% increase in average hourly earnings, in line with estimates and unchanged from the previous month.

Some more details from the report:

  • The number of people employed part time for economic reasons decreased by 453,000 to 4.9 million in January but is up by 410,000 over the year. These individuals would have preferred full-time employment but were working part time because their hours had been reduced or they were unable to find full-time jobs. 
  • In January, the number of people not in the labor force who currently want a job decreased by 399,000 to 5.8 million. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. 
  • Among those not in the labor force who wanted a job, the number of people marginally attached to the labor force changed little at 1.7 million in January. These individuals wanted and were available for work and had looked for a job sometime in the prior 12 months but had not looked for work in the 4 weeks preceding the survey. The number of discouraged workers, a subset of the marginally attached who believed that no jobs were available for them, also changed little at 475,000 in January. 

Taking a closer look at the Establishment survey, we find that job gains occurred in health care, social assistance, and construction, while federal government and financial activities lost jobs. Payroll employment changed little in 2025 (+15,000 per month on average).Here is the breakdown:

  • Health care added 82,000 jobs in January, with gains in ambulatory health care services (+50,000), hospitals (+18,000), and nursing and residential care facilities (+13,000). Job growth in health care averaged 33,000 per month in 2025. 
  • Employment in social assistance increased by 42,000 in January, primarily in individual and family services (+38,000).
  • Construction added 33,000 jobs in January, reflecting an employment gain in nonresidential specialty trade contractors (+25,000). Employment in construction was essentially flat in 2025.
  • In January, federal government employment continued to decline (-34,000) as some federal employees who accepted a deferred resignation offer in 2025 came off federal payrolls. Since reaching a peak in October 2024, federal government employment is down by 327,000, or 10.9
  • percent.
  • Financial activities employment declined by 22,000 in January and is down by 49,000 since reaching a recent peak in May 2025. Within the industry, insurance carriers and related activities lost 11,000 jobs over the month.

And visually:

Of these, the most notable is was the ongoing sharp decline in government workers, which tumbled by 42K, and are down 5 of the past 6 months.

Last but not least, extending last month's move, in January the bulk of job creation was full time jobs which increased by 582K, while part-time jobs rose by only 31K.

And while the January numbers was stellar (at least until it is revised much lower in coming months), the much uglier part to today's jobs report was the dramatic negative benchmark revisions which we highlighted yesterday. 

As we noted, the establishment survey data released today was re-benchmarked to reflect comprehensive counts of payroll jobs for March 2025. These counts are derived principally from the Quarterly Census of Employment and Wages (QCEW), which counts jobs covered by the Unemployment Insurance (UI) tax system. The benchmark process results in revisions to not seasonally adjusted data from April 2024 forward. Seasonally adjusted data from January 2021 forward are subject to revision. In addition, data for some series prior to 2021, both seasonally adjusted and unadjusted, incorporate other revisions.

The seasonally adjusted total nonfarm employment level for March 2025 was revised downward by 898,000. On a not seasonally adjusted basis, the total nonfarm employment level for March 2025 was revised downward by 862,000, or -0.5 percent. 

AS a result, the change in total nonfarm employment for 2025 was revised from +584,000 to +181,000 (seasonally adjusted), which means that the US barely generated any jobs in 2025, and that instead of creating 49K average jobs per month, the US only added 15K jobs. 

We will have more to say on the historic negative revisions shortly, but for now suffice to say, the picture is one of a much weaker jobs market, and the January bounce notwithstanding - and it won't stand once it is revised lower - the Fed will have no choice but to slash rates aggressively to prevent the already precarious labor market from rolling over into contraction. 

Tyler Durden Wed, 02/11/2026 - 11:00

CBO Director Warns US Fiscal Path Is 'Not Sustainable' ; Projects Additional $1.4T Deficit Swell Under Trump Agenda

Zero Hedge -

CBO Director Warns US Fiscal Path Is 'Not Sustainable' ; Projects Additional $1.4T Deficit Swell Under Trump Agenda

The Congressional Budget Office raised its 10-year deficit estimate by $1.4 trillion, citing Trump's 2025 reconciliation act, higher tariffs and lower immigration.

  • Annual deficits are projected to remain historically large, totaling $23.1 trillion from 2026 to 2035 and reaching 6.7% of GDP by 2036.

  • The 2025 tax law is the single largest driver, adding $4.7 trillion to deficits over the decade, partially offset by roughly $3 trillion in tariff revenue.

  • Federal debt held by the public is projected to rise to 120% of GDP by 2036, surpassing the post-World War II record by 2030.

  • Interest costs are expected to double over the next decade, climbing from $1 trillion in 2026 to $2.1 trillion in 2036 as debt and rates rise.

  • Economic growth is projected to strengthen in 2026 but slow to 1.8% thereafter, falling short of the administration’s 3% growth target despite productivity gains from artificial intelligence.

The federal government is barreling toward a decade of historically large budget deficits, according to a new report from the (arguably partisan) Congressional Budget Office (CBO), which said on Wednesday in a new report that recent tax and immigration policies have sharply worsened the long-term outlook. 

The CBO increased its estimate of cumulative deficits for the 2026-35 period by $1.4 trillion, citing President Donald Trump’s 2025 tax law and the cost of stepped-up immigration enforcement. The agency now projects total deficits of $23.1 trillion over the decade, underscoring what it called an “unsustainable fiscal path.”

At the center of the revision is last summer’s tax package, which extended the 2017 tax cuts and added new breaks. The CBO estimates the law will increase deficits by $4.7 trillion over 10 years. Immigration enforcement actions are expected to add another $500 billion. Those costs, the agency said, will more than offset revenue gains from higher tariffs, even as import duties rise to levels not seen since the mid-20th century. The CBO estimates tariff revenue will reduce deficits by about $3 trillion over the period.

Since its last long-term outlook in January 2025, the agency said three developments have materially altered its baseline projections: enactment of the 2025 reconciliation act, a sharp rise in tariffs, and lower immigration. Together, those changes have pushed projected deficits for the coming decade $1.4 trillion higher, to a cumulative $23.1 trillion from 2026 through 2035.

“The budget projections continue to indicate that the fiscal trajectory is not sustainable,” CBO Director Phillip Swagel said in prepared remarks accompanying the report.

For fiscal 2026, the deficit is projected at $1.9 trillion, or 5.8% of gross domestic product, roughly unchanged as a share of the economy from 2025. By 2036, the annual deficit is expected to widen to $3.1 trillion, or 6.7% of GDP - levels the agency described as “historically unusual,” particularly with unemployment projected to remain below 5%.

The latest outlook reflects the effects of President Donald Trump’s 2025 tax law, which extended the 2017 tax cuts and added new provisions. The CBO estimates the reconciliation act will raise deficits by $4.7 trillion over the 2026–35 period, once higher debt-service costs and macroeconomic effects are included. Higher tariffs are projected to reduce deficits by about $3 trillion, while lower immigration adds roughly $500 billion.

Revenues are projected to remain broadly stable as a share of the economy, rising modestly from 17.5% of GDP in 2026 to 17.8% in 2036. Outlays, however, are expected to climb from 23.3% to 24.4% of GDP as spending on Social Security, Medicare and interest costs grows faster than economic output.

Debt held by the public is projected to rise from 99% of GDP at the end of 2025 to 120% by 2036. Under current law, the CBO expects debt to surpass the previous postwar record of 106% of GDP—set in 1946—by 2030. Over a 30-year horizon, debt climbs to an estimated 175% of GDP. The Social Security Old-Age and Survivors Insurance Trust Fund is now projected to be exhausted in 2032, a year earlier than previously forecast.

Rising debt feeds directly into higher interest costs. Net interest outlays are projected to double over the next decade, increasing from $1 trillion in 2026 to $2.1 trillion in 2036 and rising from 3.3% to 4.6% of GDP.

Those projections undercut the administration’s stated goal of reducing the deficit toward 3% of GDP by the end of Mr. Trump’s term, a target repeatedly cited by Treasury Secretary Scott Bessent. The CBO now expects deficits of 5.8% of GDP in 2026 and about 6% in 2028.

On the economic front, the agency projects stronger real GDP growth in 2026, as the pro-growth elements of the tax law outweigh the drag from tariffs and reduced immigration. Growth is then expected to slow to 1.8% from 2027 onward, reflecting offsetting forces: stronger incentives to work and invest on one hand, and larger deficits and slower labor-force growth on the other.

The outlook also incorporates a modest boost from generative artificial intelligence, which the CBO estimates will add roughly 10 basis points a year to productivity growth, raising nonfarm business output by about 1% by 2036.

Even so, the growth dividend is not enough to materially improve the fiscal picture. While stronger growth lifts revenues, it also pushes up interest rates, and the latter effect dominates. “That result highlights how the nation’s large stock of debt influences the way that changes in the economy stemming from legislation affect the federal budget,” Mr. Swagel said.

The forecast also assumes the Federal Reserve cuts its benchmark rate by 25 basis points in 2026, with the yield on 10-year Treasury bonds rising gradually to about 4.3% by late 2027 and then stabilizing. Upward pressure from growing federal debt is expected to be offset by slower labor-force growth.

Federal Reserve Chair Jerome Powell has echoed the CBO’s warning in recent remarks, saying that while today’s debt level is manageable, the long-term path is not. “We’re running a very large deficit at essentially full employment,” Mr. Powell said last month. “The fiscal picture needs to be addressed - and it’s not really being addressed.”

On the other hand...

Perhaps CBO is just talking shit because they're #resistance?

According to some economists, CBO might be understating the deficit-reducing potential of tariffs by assuming sharper declines in import volumes than recent experience suggests. Economist Andrew Rechenberg and analyses by the Coalition for a Prosperous America point to tariff revenues collected since 2018 that remained resilient even as trade patterns shifted. In many cases, imports were rerouted through alternative supply chains rather than eliminated, while demand proved more inelastic than expected in categories such as intermediate goods and energy inputs. Under those conditions, sustained tariff enforcement - particularly with limited exemptions - could generate revenues above baseline projections.

Other analysts contend that the CBO’s long-term outlook may be overly cautious in its assessment of how tax certainty and trade policy interact with domestic investment. Permanent tax provisions and trade barriers that favor domestic production, they argue, can reinforce incentives for reshoring and capital formation in ways that are difficult to fully capture in baseline projections. Former CBO Director Douglas Elmendorf has previously acknowledged that long-run investment and productivity responses to permanent policy changes are inherently uncertain and may unfold gradually, suggesting that modest but persistent gains in domestic output could meaningfully improve fiscal outcomes over time.

Meanwhile, some economists question whether higher projected deficits will translate as directly into rising interest costs as the CBO assumes. They point to continued global demand for U.S. Treasurys, demographic forces that suppress real interest rates, and the dollar’s role as the world’s primary reserve currency as factors that weaken the link between debt levels and borrowing costs. From this perspective, fiscal sustainability is less about historical deficit benchmarks and more about market tolerance - specifically whether rising debt triggers inflation expectations or capital flight - conditions that, thus far, have not materialized.

Tyler Durden Wed, 02/11/2026 - 10:45

WTI Slides On Biggest Crude Build In A Year, Production Rebound; But...

Zero Hedge -

WTI Slides On Biggest Crude Build In A Year, Production Rebound; But...

Oil prices continued their recent rally this morning as traders hiked its risk premium as Israeli PM Netanyahu arrived in Washington to pressure President Trump to take a hard line in talks with Iran, even as the API report overnight showed a huge rise in US inventories last week.

"Oil trades firmer, with Brent back above USD 69 as Middle East tensions sustain a modest risk premium. The US signaled it is considering seizing tankers carrying Iranian oil, while President Trump threatened to deploy another aircraft carrier should nuclear talks with Iran fail," Saxo Bank noted.

The threats of violence in the Persian Gulf - a region that supplies about a fifth of the world's daily oil consumption - comes even as signs supply remains well ahead of demand.

"While rhetoric remains belligerent at times, there are no signs, at least for now, of escalation, and the U.S. President believes that Iran will ultimately want to strike a deal on its nuclear missile programme," PVM Oil Associates analyst Tamas Varga said in a note.

If API's huge build is confirmed by the official data, the battle between geopolitical risk premia and over-supply gets harder (but admittedly this is very much affected by the freezing storms).

Expect another volatile week of EIA data with “significant winter freeze noise,” Macquarie energy strategist Walt Chancellor said referring to last month’s storm.

API

  • Crude +13.4mm

  • Cushing

  • Gasoline +3.3mm

  • Distillates -2.0mm

DOE

  • Crude +8.53mm (-400k exp) - biggest build since Jan 2025

  • Cushing +1.07mm

  • Gasoline +1.16mm

  • Distillates -2.70mm

The official data confirmed a large crude build (largest since Jan 2025), but smaller than feared from API. Gasoline stocks rose for the 13th straight week while Distillates saw stocks fall for the second week...

Source: Bloomberg

This build pushed total crude stocks up to their highest since June...

Source: Bloomberg

Stockpiles at Cushing, Oklahoma, rose to 25.1 million barrels, the highest level since April 2025. The weekly build is the largest in almost a month, and the first increase on inventories since the week ending Jan. 16. 

US Crude production rebounded as expected from its winter storm plunge...

Source: Bloomberg

Crude prices started giving some back before the inventory data as stocks tumbled following the 'good' jobs news. However, WTI remains higher on the day (back near its highest since January)...

Source: Bloomberg

Finally, in its monthly Short-Term Energy Outlook released Tuesday, The EIA again warned global inventories will rise this year and next on high output from OPEC+ and producers in the Americas.

"Despite near-term tightness from disruptions, we assess that strong global oil production growth will continue to outpace oil consumption over our forecast, driving our assessment that global oil inventories will increase. We expect this trend to continue in both 2026 and 2027. We forecast that global oil inventory builds will average 3.1 million b/d in 2026, compared with an average build of 2.7 million b/d in 2025, before decreasing to average of 2.7 million b/d in 2027," the agency said.

In the wider market, OPEC left its supply-demand expectations for the oil market largely unchanged in its monthly report, but highlighted that global oil demand for the wider group's crude will drop by 400,000 bpd in the second quarter compared to the first.

Tyler Durden Wed, 02/11/2026 - 10:35

Bibi Seeks US Muscular Action On Iran In Seventh Meeting With Trump

Zero Hedge -

Bibi Seeks US Muscular Action On Iran In Seventh Meeting With Trump

"I am now leaving for the United States for my seventh trip to meet with President Trump since he was elected for a second term," Prime Minister Benjamin Netanyahu said prior to his departure to Washington. "This, of course, does not include his unforgettable visit to Israel and his speech in the Knesset." (Seven since Trump took office again!)

He and President Trump are expected to begin their meeting at the White House, focused on Iran negotiations and the possibility of military action, by late-morning (11 eastern). Netanyahu's 'welcome' in D.C. last night raised some eyebrows, given an entire major freeway into the beltway area was shut down for security reasons...

Before leaving Israel, Netanyahu told reporters that Iran is the "first and foremost" issue he will raise with Trump. He was originally scheduled to travel to the US for a February 18 meeting, but Israel asked to move it up after the US-Iran talks in Oman.

"I will present the president with our views regarding the essential principles of the negotiations – principles that, in our eyes, are vital not only for Israel but for anyone in the world who desires peace and security in the Middle East," the Israeli leader previewed.

Israel is pressing the US to require that any agreement with Iran include zero nuclear enrichment and limits on its ballistic missile program. Iranian officials have rejected those terms, signaling they would block any deal. On Tuesday, Trump indicated that Iran's missiles should be part of the agreement. 

But if Tehran were to agree with this it would essentially be self-destructing, as it would have no deterrent and be defenseless against any future Israeli attack - or any other enemy aggression for that matter.

One Israeli source told CNN that Tel Aviv is "worried about Iran’s progress in restoring its ballistic missile stockpiles and capabilities to its status before the 12-Day War."

Iranian leaders are meanwhile fully aware of what Netanyahu's D.C. trip represents, and the timing:

Tehran, which resumed talks with Washington last week in Oman, warned Monday of "destructive influences" on diplomacy ahead of the Israeli premier’s visit.

On Wednesday, Iranian president Masoud Pezeshkian said his country would "not yield to excessive demands" on its nuclear program, though he said the country is not seeking an atomic weapon.

Just after Netanyahu's arrival Tuesday evening, he met with US Middle East envoy Steve Witkoff and White House senior adviser Jared Kushner to discuss "regional issues". He was also briefed on how Oman-mediated talks are going, ahead of the proposed second round expected next week.

Tuesday evening meeting at Blair House, via GPO/JNS

President Trump is still threatening to send a second carrier group to the Central Command (CENTCOM) area, which would be a clear signal he intends major military action. He could still order some kind of limited action, also as Congress is once again missing in action on reigning in war powers.

Tyler Durden Wed, 02/11/2026 - 09:25

'Across-The-Board' Strong Jobs Report... But Take It "With A Grain Of Salt"

Zero Hedge -

'Across-The-Board' Strong Jobs Report... But Take It "With A Grain Of Salt"

Via Academy Securities' Peter Tchir,

There is almost nothing to nitpick about this report (though we do have some caveats).

Big beat on jobs 130k vs 65k expected. Private jobs crushed it, adding 172k (yes, public sector jobs shrank).

Downward revision for prior 2 reports was “only” -17k.

The benchmark revisions were -862k.

A big number but -825k was baked in, so kind of a rounding error at this stage on “old” data.

Unemployment rate dropped to 4.3%.

Not only did the household survey add 528k jobs, but we got this drop even while labor participation INCREASED to 62.5% - a very healthy shift in unemployment.

The birth/death model showed job losses of 69k.

Since I do think birth/death had an outsized influence on the revisions it is good to see a negative number here. It gives me more confidence in the print.

What is there to complain about?

  • NSA (not seasonally adjusted) had a drop of 2,649,000 jobs.

    • We have been complaining (for years) that the seasonal adjustments have a lot of issues and this year’s might be worse than usual in that respect

    • We still add a lot of jobs in winter and take them away in summer, because that is how the weather worked (slowing in the Northeast), but we no longer believe that is accurate as so much construction has moved to the South.

    • It adds back a lot of jobs that were added for the holidays. It is unclear how many jobs were really added for the holidays. It does not help that the government shutdown(s) has made the data even less reliable than usual.

  • In 2025 the largest downward revision was in February where they took away 167k from the prior 2 reports.

These two factors are why I will take this payroll data with a “grain of salt”.

The market has immediately priced in a more hawkish Fed with rate-cut expectations tumbling.

Tyler Durden Wed, 02/11/2026 - 09:12

AI 'Disruption' Fears Go Global: France's Dassault Crashes Most On Record After 'Weak Guide'

Zero Hedge -

AI 'Disruption' Fears Go Global: France's Dassault Crashes Most On Record After 'Weak Guide'

Dassault Systemes, which Nvidia has recently described as being at the epicenter of the "next frontier of artificial intelligence," suffered its largest intraday decline on record in Paris trading after issuing weaker-than-expected guidance. The miss reinforced the latest market narrative that some software firms are vulnerable to AI-driven disruption, a fear that has crushed software stocks in recent weeks.

Paris-based Dassault reported unaudited estimated financial results for the fourth quarter and guidance for the new year.

The focus among traders was on the company's guidance for 2026 sales growth of 3% to 5%, well below the 5.9% consensus among Wall Street analysts tracked by Bloomberg. The downgraded outlook was attributed to a softening automotive sector and shrinking life sciences activity.

Dassault also disclosed its annual run rate for the first time, a financial metric used in the software industry, but said growth was about 6% since the fourth quarter of 2023.

"In a software industry that has been accelerating to subscription/ recurring revenues, this is likely to be seen as underwhelming," Jefferies analyst Charles Brennan wrote in a note.

UBS analyst Michael Briest flagged in a note what he characterized as a "weak finish and a weak guide" for the software company.

Briest wrote:

How did the results compare vs expectations?

A: Q4 revenues of €1,682m (cons. €1,750m) grew by 1.2% c/c (guidance 1-8%) and just 0.6% organically to €1,682m, with a weak Auto sector in Europe called out. Within this, total Software was flat at €1,523m (guidance 1-8%) with licences down 7% y/y to €358m and at the lower-end of guidance for (13)-9%, while recurring software grew by just 3% to €1,165m (guidance: +5-8%) with subscription up just 4% (guidance 8-12%) and support 2%. Q4 cloud revenues grew by 9% (Q3 25: +8%) but were up 38% for 3DX as Life Sciences fell by 4% y/y with Medidata impacted by lower study volumes. For the year, Medidata reported 1% growth in Direct Enterprise sales (70% of the total) - and would have been +6% excl. Moderna - but CRO volumes (30% of the total) fell by 5%. Q4's EBIT of €622m/37.0% was 5% below cons. of €652m/37.3% and light of guidance for 37.2-38.0%.

What were the most noteworthy areas in the results?

A: While Asia grew by 6% and the Americas 3%, Europe declined by 5% y/y in Q4. Life Sciences fell by 4% y/y (Q3: -3%). Mainstream 3D grew by 1% (Q3: +4%) despite "good growth" at Solidworks as CentricPLM weighed. 3DExperience revenues fell by 3% y/y (Q3: +16%). FCF for the year grew by 2% to €1,380m but would have been 5% excl. French tax effects albeit overall taxes paid were €32m lower y/y and DSOs rose to 117 vs 109 last year. Contract liabilities movements were also a slight outflow in the year we note. Headcount was down 0.2% y/y at 25,967. In a new KPI, ARR grew 6% y/y to €4,497 in Q4.

Has the company's outlook/guidance changed?

A: 2026 guidance is introduced for 3-5% c/c growth to €6,410m revenues at the high-end (VA cons. +5.8% to €6,561m) and assumes a $1.18 FX rate. This includes Software at 3-5% (cons. +5.5% c/c) and licences at (1)-2% (FY25: -6%). A margin of 32.2-32.6% is expected vs cons. at 32.7% and FY25's 32.0%. EPS should grow just 3-6% c/c to €1.30-1.34 (cons. €1.37). For Q1, total sales are expected to grow 1-5% to €1,541m at the high end (cons. €1,590m), with total software growing 1-5% (Q1 25: +5%), including licences at 0-8% y/y (Q1 25: -10%). Guidance is for a Q1 margin of 29.2-30.7% (cons. 31.9%). DS talks of "aligning the organisation to focus" on execution and a CMD is planned in November. Having set a goal to grow at least 7%pa from 2024-29, the guidance means DS now needs to grow 8.2-8.9% in 2027-29.

Via the UBS analyst: Figure 1: Dassault Q4 25 results summary (€m)

Shares in Paris posted their steepest decline on record, plunging 22%. The bull market peaked in 2021, and the liquidation phase has been ongoing since 2024. The next technical level to watch is the 76.4% Fibonacci retracement, around 15 euros. 

Traders are sorting "AI winners vs. losers," pressuring companies seen as highly exposed, including peers such as Autodesk and Synopsys.

Dassault creates "virtual twins" using Nvidia models of complex machines, a field increasingly threatened by other AI "world models" that help systems navigate the physical world.

Software valuations have crashed.

But as we note in recent trading sessions:

Our Market Ear technicians say:

"Our vision is built on decades of industrial and scientific knowledge and know-how, and we are now building the capabilities to turn that vision into reality," CEO Pascal Daloz said in a statement, adding, "True transformation takes time, for our customers and for ourselves."

Tyler Durden Wed, 02/11/2026 - 09:00

Electricity Demand Is Surging, The Grid Isn't Ready: IEA

Zero Hedge -

Electricity Demand Is Surging, The Grid Isn't Ready: IEA

By Tsvetana Paraskova of OilPrice.com

  • International Energy Agency says global electricity demand is growing at its fastest pace in 15 years, set to rise more than 3.5% annually through 2030.

  • While renewables, nuclear, and natural gas are expanding rapidly, grid infrastructure is becoming the key bottleneck, with over 2,500 GW of power and load projects stuck in connection queues worldwide.

  • Grid investment must rise about 50% above current levels to keep pace, with BloombergNEF and Goldman Sachs warning that persistent grid constraints could trigger power shortages and even undermine the U.S. position in the global AI race

Global electricity demand is rising at the fastest pace in 15 years and will continue to do so at least until the end of the decade as AI infrastructure, advanced manufacturing, and electrification have ushered in The Age of Electricity, the International Energy Agency (IEA) says.

Global power demand is expected to grow by more than 3.5% per year on average through the end of the decade, the agency said in its new Electricity 2026 report.

Renewables, nuclear, and natural gas are the big winners of the electricity demand boom, but the rise in all these power-generating sources would not mean anything if they struggle to connect to the grid.

Power Demand Surge

Global electricity demand increased by 3% annually in 2025, following growth of 4.4% in 2024, the IEA said in the report.

Between 2026 and 2030, the annual average growth rate would be 3.6%, driven by higher consumption from industry, electric vehicles (EVs), air conditioning, and data centers, according to the agency.

While emerging economies, including China, India, and the Southeast Asian region, will drive 80% of the additional power demand by 2030, advanced economies see growth in electricity demand after 15 years of stagnation, the IEA said. Artificial intelligence, data centers, and advanced manufacturing support the return to growth in power demand in advanced economies.

U.S. electricity demand rose by 2.1% in 2025 and is expected to grow by nearly 2% annually through 2030. The rapid expansion of data centers will drive half of the increase, the agency noted.

EU demand is forecast to increase by around 2% per year through 2030, and many other advanced economies – such as Australia, Canada, Japan, and South Korea – are also expected to see faster electricity demand growth through 2030.

Grid Investment Lagging Behind Power Generation Boom

As demand grows, developers of new capacity, especially renewables and natural gas, face constraints in connecting to the grids. Regional and country-specific trends are not the same, but the need for rapid and efficient expansion of grids is a pressing global issue. Without increased system flexibility and rapid grid expansion, the Age of Electricity could roll out slower than expected.

Today, global investments in grids are about $400 billion per year. If the world is to meet the expected growth in power demand through 2030, it would need to boost annual grid investment by about 50% from $400 billion, according to the IEA.

The Age of Electricity will also need “a significant scaling up of grid-related supply chains,” the IEA said.

Currently, more than 2,500 gigawatts (GW) worth of projects – renewables, storage, and projects with large loads such as data centers – are stalled in connection queues worldwide.

A total of 1,600 GW of queued projects could be integrated in the near term through grid-enhancing technologies and regulatory reforms that enable more flexible grid connections and usage, the agency reckons.

But increased flexibility and grid expansion need more investment than the current spending.

Last year, grid investment was on track to top $470 billion for the first time, up by 16% from 2024, a December analysis from BloombergNEF found.

The U.S. accounted for a quarter of global grid spending with the highest investment level in 2025, at $115 billion. China and the EU/UK followed as other major contributors, each with around 20% of the global sum, according to the report.

However, rising equipment costs compounded by high inflation have started to affect overall spending figures, BNEF said, adding that increased spending “will not fully eliminate ongoing grid-infrastructure bottlenecks, meaning delays to new generation and demand connections are likely to continue in the coming years.”

“We’ve seen that even with increased investment, there are significant barriers to meeting the needs of new generation and power demand on time,” Peter Wall, Head of Grids Research at BloombergNEF, said.

“With data centers and industrial electrification driving sharp increases in power demand, investors need to factor in how essential timely grid expansion is for not only connecting new demand but also connecting all of the generation we will need to ensure a secure and reliable supply to this demand after over a decade of stagnation.”

Additional grid investment is hampered by supply chain and labor constraints, BloombergNEF notes.

In the U.S. specifically, the aging grid infrastructure in key regional U.S. markets cannot cope with all requests, with grid investments lagging behind soaring power demand.

At the current rate of interconnection requests and grid capacity, the U.S. could face a power crunch by 2030, Samantha Dart, Goldman Sachs’ co-head of global commodities research, said at a conference last month.

“We aren’t adding enough capacity,” Dart said in January at the Goldman Sachs Energy, CleanTech and Utilities Conference in Miami.

Nearly all power grids in the U.S. may lack critical spare capacity by the end of the decade. If the issue with grid constraints remains unaddressed, China could pull ahead of the U.S. in the AI race, Dart noted.

Tyler Durden Wed, 02/11/2026 - 08:40

Futures Rise Ahead Of Today's Delayed Jobs Report

Zero Hedge -

Futures Rise Ahead Of Today's Delayed Jobs Report

  

US equity futures are flat ahead of today's delayed January payrolls (full preview here) with the market now expecting a weaker print after the Retail Sales miss and weaker high-frequency data. As of 8:00am ET, S&P and Nasdaq 100 futures are both up 0.1%. Pre-market, Mag7 names are mostly lower; Discretionary, Energy, Industrials and Materials are all higher pointing to a potential broad-based cyclical rally while TMT is muted; AI ex-Mag7 is seeing a bid. JPMorgan’s trading desk expects the delayed January data to give a small boost to stocks — something much-needed amid the indiscriminate selling of those on the wrong side of AI. International markets are mixed with trends similar – Japan closed, KOSPI strong up 100bps, HSI not far behind up 30bps. Europe more flat to down with CAC down 13bps and DAX off 24bps. Australia leads the downside off 172bps. 10 TSY yields are at lows 4.13%, while the USD is weaker for the 4th consecutive session, the DXY down below $97 to $96.58 and Bitcoin trades down to $67k. FT reports Ukraine planning presidential elections and a referendum on any peace deal, potentially by mid-May, under US pressure. Timing uncertain given Donbas, Zaporizhzhia and escalation risks. China CPI soft +0.2% vs. 0.4%. Commodities moving higher this morning led by silver but Comex copper back above $6 to $6.07 up 3%, crude quietly moving up with WTI at $65. Today’s macro data focus is on the NFP release but watch the drop in Mortgage Approvals given the strength of the recent Homebuilders bid. McDonald’s and Cisco are due to report.

In premarket trading, Mag 7 stocks are mixed (Nvidia +0.6%, Amazon +0.2%, Microsoft +0.2%, Alphabet +0.07%, Apple -0.04%, Meta -0.4%, Tesla -0.2%)

  • Astera Labs (ALAB) falls 11% after the semiconductor manufacturing company reported its fourth-quarter results. It also announced that its chief financial officer would retire.
  • Beta Technologies (BETA) climbs 18% after Amazon.com Inc. disclosed a stake in the electric-powered aircraft manufacturer.
  • Centrus Energy (LEU) falls 8% after the uranium company’s fourth-quarter earnings per share fell short of analyst estimates, with Citi pointing to higher-than-expected capex spending.
  • Cloudflare (NET) gains 14% after the software company’s fourth-quarter results beat expectations and it gave a bullish revenue forecast.
  • Humana (HUM) falls 6% after forecasting full-year profit that fell short of Wall Street’s expectations, adding to investor concerns about the challenges facing the US health-insurance industry.
  • Kraft Heinz (KHC) falls 6% after pausing work on its planned separation as new Chief Executive Officer Steve Cahillane works to improve results.
  • Lattice Semiconductor (LSCC) rises 11% after the semiconductor device company gave a first-quarter revenue forecast that was much stronger than expected.
  • Lyft (LYFT) falls 17% after issuing a disappointing forecast that missed Wall Street expectations, a sign that its global expansion and new product offerings are not performing as quickly and as well as anticipated.
  • Mattel (MAT) slumps 26% after the toymaker’s 2026 adjusted earnings-per-share forecast missed the average analyst estimate, triggering a downgrade at JPMorgan.
  • Moderna (MRNA) falls 10% after US regulators refused to review its novel mRNA flu vaccine, dealing a major blow to the company as it seeks to expand beyond its Covid shot.
  • Rapid7 (RPD) falls 22% after the software company’s outlook was seen as disappointing. Analysts cited weakness in annual recurring revenue as a concern.
  • Robinhood (HOOD) declines 7% after the fintech company reported net revenue for the fourth quarter that missed the average analyst estimate.
  • Teradata (TDC) gains 15% after the database management company reported fourth-quarter results that beat expectations and gave an outlook for adjusted earnings that is stronger than expected.
  • Vertiv Holdings (VRT) rises 13% after the power equipment company forecast adjusted earnings per share for the first quarter; the guidance beat the average analyst estimate.

 

January’s payrolls report (full preview here) is due after several Trump admin officials, including National Economic Council Director Kevin Hassett and Peter Navarro, recently warned that investors should expect lower jobs numbers going forward. Analysts are also anticipating an annual revision to the jobs count, which is expected to reveal a huge markdown in the year through March 2025, to the tune of 750-900K jobs. Bloomberg’s consensus is for 65k job additions in January vs 50k in December, with a crowd-sourced whisper number of 35k, while scenarios laid out by JPMorgan Market Intelligence suggest a sweet spot between 60k and 110k to boost stocks. With the job market in the midst of a “low-hire, low-fire” environment, expectations are low, which could act as a potential catalyst for equities.

JPMorgan strategists also note that the S&P 500 options market is underpricing payrolls compared to historical swings, with past moves nearly double what is currently being priced. Meanwhile, interest-rate traders are betting on two or three Fed rate cuts this year, becoming slightly more conservative than the dovish bets seen after Warsh’s nomination earlier in the month.

“We’re still in this sort of, not-really-hiring, not-really-firing mode. But we haven’t seen a clear breakout in either direction,” said Graham Secker, head of equity strategy at Pictet Wealth Management. “Everyone’s very aware of the kind of the K-shape dynamic within the US economy, and the US consumer in particular.”

For Nicolas Bickel, group head of investment private banking at Edmond de Rothschild, the jobs report and Friday’s inflation data will offer insight into the impact of January’s extreme weather. A strong jobs report would instill confidence in the consumer outlook and help fuel a broadening of the stock rally.

“I really like that rotation personally, because it’s for me the lifeblood of a bull market,” Bickel said. Investors “are just choosing another horse, and means that they have money to be invested, or are confident in the economy.”

The selloff in software stocks has been overblown, creating buying opportunities for investors, according to Nannette Hechler-Fayd’Herbe, head of investment strategy for EMEA at Lombard Odier.

“There have been a lot of concerns that AI might be disrupting software companies, but we have held the view that actually, it is empowering them, it is shortening the time for coding, it is enabling efficiencies of workflows,” she told Bloomberg TV. “For us it’s actually been an opportunity to take exposure.”

In other assets, Bitcoin fell to its lowest level since last Friday’s selloff, despite support from its largest holders, so-called whale wallets, in their biggest buying spree since November. The dollar also fell for a fourth straight day. In Europe, shares in software firms and wealth managers continued to slide on AI disruption fears.

In politics, House lawmakers are set to vote today on whether to reject some of Trump’s tariff policies, starting with a resolution opposing levies on Canada. Trump is expected to unveil plans to use government funding and Pentagon contracts to sustain coal-fired power plants.

A quick look at earnings: Out of the 326 S&P 500 companies that have reported so far in the earnings season, 78% have managed to beat analyst forecasts, while 17% have missed. T-Mobile, Shopify and Kraft Heinz are among companies expected to report before the market open. T-Mobile’s new CEO is likely to maintain a strategy of promoting aggressively to sustain industry-leading postpaid phone net additions and service growth, according to Bloomberg Intelligence. Earnings from Cisco and McDonald’s follow later.

Stocks in Europe are mixed, the Stoxx 600 is up 0.1%. The FTSE 100 outperforms peers, boosted by energy and materials stocks. European wealth managers tracked their US peers lower amid fears over the disruptive impact of a new AI tool designed to create tax strategies. St James’s Place Plc slumped 12% in London, while investment platforms such as AJ Bell Plc and IntegraFin Holdings Plc were sliding as well. Weak guidance by Dassault Systemes SE played into fears that the French software firm may be vulnerable to AI, sending the stock lower by the most in three decades. Here are some of the biggest movers on Wednesday:

  • Ahold Delhaize shares gain as much as 9.9%, the most since 2020, as the Dutch retail store operator reported margin beats across the board.
  • Siemens Energy shares rally as much as 6.5% to its highest intraday level on record after first-quarter earnings surpassed the average analyst estimate, driven by strong order growth in gas turbines.
  • Heineken shares rise as much as 5.5%, the most in nearly a year, after the Dutch brewer exited 2025 with what analysts consider an uptick in momentum, boosted by a cost-saving program that sees it cut up to 6,000 jobs.
  • Renishaw shares rise as much as 6.4%, the most in five months, as the engineering firm’s order book grows.
  • B&M shares climb as much as 5.4% after Peel Hunt upgraded its recommendation on the discount retailer, arguing that the shares appear undervalued given the prospects for stronger sales and earnings.
  • Gerresheimer shares plunge as much as 35%, hitting their lowest level since 2009, after the German maker of packaging for medicines and cosmetics delayed the publication of its 2025 earnings.
  • Dassault Systemes shares sink as much as 22% the most on record, after the software company gave a weaker-than-expected sales growth guidance for 2026, on top of 4Q results that missed estimates.
  • St James’s Place shares fall as much as 11%, the most in nearly two years, leading a drop in European wealth managers over worries that artificial intelligence will disrupt their businesses.
  • Randstad shares fall as much as 9.3%, touching the lowest level since March 2020, after the staffing and HR services provider reported organic revenue for the fourth quarter that missed the average analyst estimate.
  • Barratt Redrow shares fall as much as 8.4%, the most since July, as pressure increases on the UK homebuilder’s margins.

Earlier in the session, Asian equities climbed to a fresh record, led by technology shares, as investors continued to rotate away from US assets amid a weaker dollar. The MSCI Asia Pacific ex-Japan Index rose as much as 1.3%, set for a third straight daily gain. TSMC, Commonwealth Bank of Australia and Samsung Electronics were among the major contributors. Benchmarks in South Korea, Hong Kong and Australia advanced, while those in mainland China slipped. Japanese markets were shut for a holiday. The strength in Asia’s technology shares and weakness in the greenback continue to drive investors into the developing world. The 30-day correlation between the dollar and MSCI Asia is minus 0.5, around the most severe level since April, Bloomberg-compiled data show.  Bucking the trend, SK Hynix was among the major drags on the index following a report China’s CXMT plans to allocate a chunk of its DRAM capacity to produce superfast HBM3 chips that are used in AI. Samsung reversed earlier losses after a top executive said that the company is back at the top of the memory industry with its new HBM4 technology.  Taiwan’s benchmark Taiex index jumped 1.6% to an all-time high on its last trading day before Lunar New Year holiday. Tech optimism rose after TSMC’s solid January sales data showed a sign of sustained global AI spending. The island’s stock market will resume trading from Feb. 23. 

In FX, the yen has continued its climb against the dollar with USD/JPY briefly slipping below the 153 level. Accordingly the Bloomberg Dollar index is down 0.3%, also hampered by gains in NOK and AUD, with the latter bolstered by hawkish RBA remarks.

In rates, treasury yields are slightly lower on the day ahead of the rescheduled January employment report at 8:30am New York time. Overnight trading bands were narrow amid similarly muted price action European bonds, while S&P 500 futures hold small gain. US session also includes new-issue 10-year note auction for $42 billion, following good demand for 3-year notes Tuesday. US intermediate yields are richer by about 1bp with 10-year steady around 4.135% and curve spreads within 1bp of Tuesday’s close. German and UK peers are equally contained. For the 1pm auction, 10-year notes have when-issued yield near 4.142%, about 3bp richer than last month’s sale, a second and final reopening that stopped through by 0.7bp. IG dollar issuance slate empty so far. Eight names priced $11.3b Tuesday, led by Walt Disney Co. and pharmaceutical distributor Cencora’s multi—tranche trades. Issuers paid about 2bps in new issue concessions on deals that were 4.3 times covered

In commodities, metals prices are broadly firmer, with spot gold and silver up 1.4% and 6.2% respectively. Oil futures have continued to rise amid tensions in the Middle East. Bitcoin has extended this week’s declines, down 2.9%. Nickel has also been boosted by Indonesian output curbs.  Gold hovered above $5,000 an ounce. Bitcoin slid under $67,000, with last week’s reprieve proving short-lived and highlighting investors’ lack of confidence in a sustained recovery.

Today's calendar includes the nonfarm payrolls for January are due at 8.30 a.m., followed by Fed budget balance at 2 p.m. Fed’s Bowman (10:15am), Schmid (10:00am) and Hammack (4pm) are scheduled to speak at events.

Market Snapshot

  • S&P 500 mini little changed
  • Nasdaq 100 mini -0.2%
  • Russell 2000 mini little changed
  • Stoxx Europe 600 -0.2%
  • DAX -0.3%
  • CAC 40 -0.5%
  • 10-year Treasury yield -1 basis point at 4.13%
  • VIX +0.5 points at 18.26
  • Bloomberg Dollar Index -0.3% at 1179.03
  • euro +0.2% at $1.1917
  • WTI crude +1.3% at $64.8/barrel

Top Overnight News

  • Top White House officials have started trying to downplay a highly anticipated jobs report set for release on Wednesday, insisting that the US economy remains strong even if the data may ultimately show a fresh slowdown in hiring. WSJ  
  • Negotiations between US Democrats and the White House are ongoing, but right now, a deal on a stopgap funding measure seems unlikely: Punchbowl 
  • Iran wants to make a deal with the US, Donald Trump told Fox. On the Fed, the president reiterated his call for lower rates, saying employment numbers are “really good.” BBG
  • House lawmakers are set to vote today on whether to reject some of Trump’s tariff policies, starting with a resolution opposing levies on Canada. BBG
  • The White House revised its fact sheet on the US-India trade agreement to adjust language around agricultural goods, adding to confusion about the deal already raised by farmer groups. BBG
  • Ukraine has begun planning presidential elections alongside a referendum on any peace deal with Russia, after the Trump administration pressed Kyiv to hold both votes by May 15 or risk losing proposed US security guarantees. FT
  • China’s consumer inflation eased at the start of 2026 after reaching a near three-year high in December, as food prices declined. China’s PPI for Jan came in at -1.4% (vs. the Street -1.5% and down from -1.9% in Dec) while the CPI was +0.2% (down from +0.8% in Dec and below the Street’s +0.4% forecast). WSJ
  • Euro-area wage growth is poised to pick up in the second half, ECB predictions showed, supporting officials’ view that interest rates can remain steady. BBG
  • The Reserve Bank of Australia sees the country’s inflation rate as too high and will take all necessary measures to bring it under control, a top central bank official said. WSJ
  • China’s latest call to curb Treasuries in its holdings is stoking fear that Trump’s unpredictable policies may encourage traditional lenders like Europe and Japan to follow in its footsteps. BBG

Trade/Tariffs

  • China is reportedly considering probing wine from France; could consider launching anti-dumping duty to French wine, and potentially take counter measures against the EU if it adopt duties.
  • China plans to extend import VAT breaks on cancer and rare disease drugs until the end of 2027.
  • White House revised Fact Sheet on US-India trade deal with reference to pulses dropped and it changed the wording around India's proposed USD 500bln purchase from a firm "commitment" to an "intent".
  • US House Speaker Johnson fails in an effort to block votes on measures to rescind Trump’s tariff policies, according to CNN's Manu Raju.
  • US Treasury Secretary Bessent said US-China ties are stable but competitive, aiming for fair competition and de-risking, not decoupling, while he adds China must rebalance amid persistent USD 1tln trade imbalance.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded higher but with some of the gains in the region capped after the weak handover from the US and with the NFP report on the horizon, while participants also digested earnings and data in thinned conditions, with Japanese markets shut for a holiday. ASX 200 outperformed with the index led higher by the top-weighted financial sector after shares in Australia's largest lender and company by market cap, CBA, rallied following a 5% increase in H1 profits. Hang Seng and Shanghai Comp were kept afloat following the PBoC's liquidity operations and recent pledge to continue implementing an appropriately loose monetary policy in its quarterly implementation report. However, the upside was limited as participants also reflected on the mixed Chinese inflation data in which CPI printed softer-than-expected, while PPI was slightly better-than-feared but remained in deep deflationary territory.

Top Asian News

  • Goldman Sachs revised its 2026 China PPI forecast to -0.5% Y/Y.
  • ByteDance reportedly plans to produce 100k-300k units of AI chips this year, while it is developing the AI chip and is in talks with Samsung (005930 KS) to manufacture it, according to sources.
  • Tencent Cloud (0700 HK) partners with Tesla (TSLA) to upgrade its cockpit experience.
  • NetEase (9999 HK / NTES) Q4 (USD): EPS 1.58 (exp. 2.03), Revenue 3.90bln (exp. 4.10bln).

European Bourses (STOXX 600 -0.3%) opened mixed, but now display a mostly negative picture (ex-FTSE 100, buoyed by strength in oil/mining names).  Sectors hold a negative bias. Energy and Basic Resources are towards the top of the pile, whilst Tech lags. Movers today include; Siemens Energy (+5%, strong Q1 results), Dassault Systemes (-17%, poor results and weak outlook), Lufthansa (-4%, pilots threaten to strike). Elsewhere, some modest pressure was seen in Pernod Ricard (+0.5%) following reports that China could consider an anti-dumping duty on French wine.

Top European News

  • EU's von der Leyen said the EU needs one large, deep and liquid capital market, adding that its currently too fragmented. Completing their own single market also means completing their own energy union, which is crucial when it comes to bringing prices down even further.

FX

  • DXY is slightly lower this morning and trades towards the lower end of a 96.49-96.91 range. Focus for the day lies solely on the US NFP report in the afternoon. The delayed January jobs data is expected to show 70k nonfarm payrolls added in the month (vs a prev. 50k; with the range of forecasts between -10k to +108k); the unemployment rate is expected to remain steady at 4.4%. Recent labour metrics are painting a subdued picture for the labour market, and commentary via WH Economic Adviser Hassett also dampened expectations ahead of the report today. Following his remarks, Bloomberg’s NFP whisper number dropped to 37k (prev. 50k).
  • JPY remains at the top of the pile, continuing to extend on the recent strength seen following PM Takaichi’s landslide victory. As mentioned in the coverage since the election, there are numerous factors helping buoy the JPY; a) BoJ potentially to normalise faster, b) less friction for Japanese officials to conduct intervention, c) hefty flows to Japanese equities, d) FinMin Katayama suggesting that surplus foreign reserves could help to fund the food tax suspension. USD/JPY briefly dipped below the 153.00 mark, and currently holds within a 152.79-154.51 band. The pair is now approaching the touted rate check/intervention lows seen late Jan (152.09).
  • G10s are firmer against the USD to varying degrees. JPY outperforms (mentioned above), whilst the Aussie follows closely behind. AUD/USD has now breached above the 0.70 mark, to now trade at levels not seen since Feb’23. The pair currently trades around 0.7113, and further upside could see a test of the high from 2nd Feb 2023 at 0.7157. Recent strength comes amidst the continued strength in underlying metals prices, and after commentary from RBA’s Hauser. He noted that inflation is too high, which they can't let persist and will do what is needed to bring inflation back to the target band.
  • Elsewhere, EUR is slightly firmer and trades around the 1.19 mark, and off recent highs which saw the single currency top 1.2000 in late January. A weak US jobs report could see another bid higher for EUR/USD, which may lead to ECB doves to push for an FX-led rate cut. No move was seen after the ECB Wage Tracker, where the 2026 annual estimate was increased to 2.388% (prev. 2.316%).
  • The NOK continues to strengthen against the EUR in the aftermath of Tuesday’s hotter-than-expected Norwegian inflation data; a report which led some banks to push back calls for Spring cuts. EUR/NOK is currently at session lows, in a 11.2638-11.3300 range.

Fixed Income

  • In brief, benchmarks are contained into today's NFP report (delayed due to the brief shutdown), which includes benchmark revisions. US labour data during the window has been on the softer side of things, with claims steady, continuing easing, ADP weak and Revelio posting job losses. Furthermore, Challenger cuts were the highest for January since 2009, and JOLTS were at the lowest since September 2020.
  • USTs approach this, and then data and Fed speak afterwards, firmer by a tick or two in a thin 112-15 to 112-18 band; note, trade was quiet overnight with no cash trade due to Japan's market holiday. For the Fed, markets currently fully price a cut in June (-25.2bps implied), with around a 20% chance of one occurring earlier in March and c. 40% in April.
  • EGBs in-fitting with the above, Bunds firmer but only marginally so in a 128.60-74 band. ECB speak this morning once again sticking to the script. Interestingly, the latest ECB wage tracker was hot across the board and factors in favour of those who think the next move will be a hike rather than a cut. Adding to the hawkish narrative from/affecting some global central banks in recent sessions, i.e. the RBA and Norges Bank.
  • Gilts are contained in a 90.71-90 band. UK specifics are much quieter thus far vs the last few sessions, with a busy docket of data scheduled for next week. Much of the UK press is focused on Angela Rayner after it was revealed that a "Rayner for leader" site briefly went live in January; a Bloomberg write-up on the subject characterises the discussion/view of insiders neatly as "Buy Rayner and Sell Streeting".
  • Germany sells EUR 750mln vs exp. EUR 1bln 2.90% 2056 and EUR 1.16bln vs exp. EUR 1.5bln 2.50% 2054 Bund.
  • UK sells GBP 300mln 4.25% 2049 Gilt via Tender: b/c 4.32x, average yield 5.256%.
  • China's Ministry of Finance issues CNY 14 bln of treasury bonds in Hong Kong.
  • Australia sold AUD 700mln 3.75% April 2037 bonds, b/c 4.14, avg. yield 4.8342%.
  • JPMorgan launches USD 1.5bln tender offer for EA bonds ahead of USD 20bln buyout financing; buyback includes USD 750mln each of 2031 and 2051 maturities, expiring March 11th.

Commodities

  • Crude benchmarks have steadily moved higher as the European session gets underway, with traders digesting a report by Axios quoting President Trump saying that he might send a second carrier to strike Iran if talks fail, pushing aside the larger-than-expected US private inventory build. WTI and Brent rebounded from a trough of USD 63.65/bbl and USD 68.49/bbl respectively in the later hours of Tuesday's trading session, and oscillated in a tight c. USD 0.50/bbl range during the APAC session, with WTI nearing USD 65/bbl to the upside.
  • Spot gold remains contained in a USD 4965-5086/oz band that has been formed so far this week, ahead of a busy week of tier-1 US data.
  • Base metals have been steadily bidding higher with 3M LME Copper reaching USD 13.25k/t. The broad-based move seems to have been driven by nickel prices. Weda Bay, the world's largest nickel mine, has been told by Indonesian authorities to cut its output by 70% in an effort to boost global prices. Indeed, LME nickel futures prices did lift higher following the report, rising from USD 17.75k/t to USD 17.95k/t, but have since pared back slightly.
  • Indian state-owned refiners are to consider buying more US and Venezuelan crude after the trade deal with the US, Bloomberg reported.
  • SHFE is adjusting the automatic conversion standard for hedging position limits in silver futures. "...starting from the last trading day of February 2026, the hedging transaction position limits for all silver contracts that have not obtained hedging transaction position limits for the near-delivery month will be temporarily adjusted to 0 lots for both buy and sell hedging transactions in the near-delivery month (the month preceding the delivery month and the delivery month itself).".
  • Russia to complete building two ice-class LNG tankers in 2026, according to IFX.
  • World's biggest nickel mine in Indonesia, Weda Bay, has been told to slash output by 70% to 12mln tonnes, Bloomberg reported.
  • Syria taps energy majors to explore for trillions of cubic meters of gas with the state oil chief noting that Chevron (CVX) , ConocoPhillips (COP) and TotalEnergies (TTE FP) and Eni (ENI IM) are interested in exploration, according to FT.
  • US Private Energy Inventory Data (bbls): Crude +13.4mln (exp. +0.8mln), Distillates -2.0mln (exp. -1.3mln), Gasoline +3.3mln (exp. -0.4mln), Cushing +1.4mln.
  • US issues Venezuela related license authorizing certain transactions necessary to ports and airport operations, also authorising certain activities involving Venezuelan-origin oil.
  • Wells Fargo raises its 2026 gold target to USD 6,100-6,300/oz citing geopolitical risks, market volatility, and strong central-bank demand.

Central Banks

  • ECB Wage Tracker: 2026 Annual 2.388% (prev. 2.316%).
  • ECB’s Makhlouf said uncertainty means the ECB should take a meeting-by-meeting approach.
  • RBA Deputy Governor Hauser said Australia's economy is not just 'dig it and ship it', many parts of the economy are doing quite well, adds inflation is too high which they can't let persist and will do what is needed to return it to the band.
  • Westpac anticipates RBNZ hiking rates more quickly in 2027.

Geopolitics: Ukraine

  • Russia's Kremlin said that the US has prohibited Russia and China from dealing with Venezuelan oil and are looking to discuss with the US about the restriction.
  • Russia to complete building two ice-class LNG tankers in 2026, according to IFX.
  • Ukrainian President Zelensky plans spring elections alongside a referendum on the peace deal after US push, according to FT.

Geopolitics: Middle East

  • Iranian Supreme leader Khamenei's advisor says that Iranian negotiators have no authority to discuss missiles.
  • Iran's Foreign Minister Araqchi said the date for the next round of US negotiations have not been set.
  • Iranian Foreign Ministry said they are ready to negotiate on the percentage of uranium enrichment and the size of its enriched stockpile.
  • Iran's President said that the country is not seeking nuclear weapons and are ready for any kind of verification.
  • US President Trump said Iran wants to make a deal and it would be foolish if they didn't.

Geopolitics: Others

  • Australia charges two Chinese nationals with foreign interference.
  • Taiwan's President Lai said Indo-Pacific nations are raising defense budgets and Taiwan must do the same, while he thanks US for its support of Taiwan's defence.
  • UK expands settlement visa for Hong Kongers following Jimmy Lai's sentence.

US Event Calendar

  • 7:00 am: United States Feb 6 MBA Mortgage Applications, prior -8.9%
  • 8:30 am: United States Jan Change in Nonfarm Payrolls, est. 65k, prior 50k
  • 8:30 am: United States Jan Change in Manufact. Payrolls, est. -6.8k, prior -8k
  • 8:30 am: United States Jan Unemployment Rate, est. 4.4%, prior 4.4%
  • 2:00 pm: United States Jan Federal Budget Balance, est. -94.35b, prior -144.7b
  • 10:00 am: United States Fed’s Schmid Speaks on Monetary Policy and Economic Outlook
  • 10:15 am: United States Fed’s Bowman in Moderated Conversation
  • 4:00 pm: United States Fed’s Hammack Speaks on Leadership at Ohio State University

DB's Jim Reid concludes the overnight wrap

The last 24 hours have seen a modest risk-off move in markets, with the S&P 500 (-0.33%) and STOXX 600 (-0.07%) both falling back. In part, that was thanks to a weak batch of US data, which added a little bit more doubt on the near-term growth outlook, and pushed Treasury yields down across the curve. So in turn, that cemented expectations the Fed would keep cutting rates under a new Chair this year, and the 10yr Treasury yield (-5.9bps) fell back to 4.14%. But matters also weren’t helped by ongoing concerns in the tech space, whilst fresh geopolitical risks around Iran have seen Brent crude oil move up to a 1-week high this morning of $69.17/bbl. To be fair, US equity futures are back up again this morning, with those on the S&P 500 up +0.29%, but so far the index has been unable to get back up to its record high from a couple of weeks ago.

That weak US data was the biggest market driver yesterday, with a succession of prints that all leant on the softer side. Most notably, retail sales were unchanged in December (vs. +0.4% expected), which added to the sense the economy had stumbled into year-end, particularly after last week’s data where job openings were at their weakest since 2020. Meanwhile, the dovish narrative got even more fuel from the latest Employment Cost Index for Q4, which came in at just +0.7%. That’s a measure of labour costs that’s closely followed by the Fed, and it was the weakest it’s been since the current inflation surge got going in Q2 2021. Moreover, with the data coming in a bit weaker than expected, the Atlanta Fed’s GDPNow estimate for Q4 also came down, now showing an annualised growth rate of +3.7%.

Collectively, those releases helped to validate the dovish arguments pushing for more rate cuts this year. So investors priced in more Fed easing in 2026, and there was even a growing sense that Powell might deliver another cut before departing as Chair if the data continued in that direction. For instance, the probability of a cut by the April FOMC (Powell’s last as Chair) was up to 47% by the close. And looking further out, the amount of cuts priced in by December was up +3.3bps on the day to 60bps. In turn, that brought Treasury yields down across the curve, with the 2yr yield (-3.3bps) closing at 3.45%, whilst the 10yr yield (-5.9bps) fell to 4.14%.

That dovish repricing came as Trump continued to call for lower rates, saying in an interview with Fox Business that the US “should have the lowest interest rates in the world”, and that interest rates should be 2 points lower right now. However, commentary from Fed officials was more cautious, with Cleveland Fed President Hammack saying that “we could be on hold for quite some time”, whilst Dallas Fed President Logan said that it would take “further material cooling” in the labour market for more rate cuts to be appropriate.

Over on the geopolitical side, we also had some fresh headlines on Iran yesterday which put upward pressure on oil prices. First, President Trump told Axios in an interview that he was “thinking” about sending a second aircraft carrier strike group to the Middle East, and said that “Either we will make a deal or we will have to do something very tough like last time”. Separately, the WSJ reported that Trump administration officials had considered whether to seize tankers transporting Iranian oil, but have held off because of concerns about retaliation and the oil market impact. So oil prices moved higher after those headlines, and this morning Brent crude is currently around a 1-week high of $69.17/bbl.

Looking forward, US data will stay in the spotlight today, as we’ll get the January jobs report that was delayed from last Friday because of the partial government shutdown. In terms of what to expect, our US economists see nonfarm payrolls coming in at +75k, with the unemployment rate staying at 4.4%. Remember as well that today’s report will include the annual benchmark revisions to payrolls, which could rewrite some of the trends over recent history. We already got the preliminary number in September, which said that payrolls were -911k lower as of March 2025. However, that number can be different from the preliminary release, and last year’s preliminary benchmark revision was -818k but the final number was a smaller -589k, so not as negative as first thought. For more details, click here for our US econ team’s preview and their subsequent webinar.

Ahead of that, US equities fell back, with the S&P 500 (-0.33%) initially on course for a new record before reversing course later in the session. That came amidst a turnaround in software stocks, which were up over 2% in early trading, before paring that back to close just +0.09% higher. That tech drag was seen more broadly, with the Mag 7 (-0.60%) falling back as every member except Tesla lost ground, whilst the small-cap Russell 2000 (-0.34%) performed in-line with large caps as investors grew more cautious ahead of today’s jobs report.
Earlier in Europe, markets had also put in a steady performance, with sovereign bonds rallying after the US data. So that meant yields on 10yr bunds (-3.2bps), OATs (-3.7bps) and BTPs (-3.8bps) all moved lower. And similarly, 10yr gilt yields (-2.1bps) were also subdued as the political uncertainty over Prime Minister Starmer’s position eased back again. Meanwhile for equities, it was a quiet day as well, with the STOXX 600 (-0.07%) modestly declining from its record high the previous day.

Staying on Europe, tomorrow will also see EU leaders gather for a meeting on how to strengthen the single market and reduce their  economic dependencies. They’ll also be joined by former ECB President Mario Draghi, who wrote a report on boosting EU competitiveness back in 2024. Our European economists have a preview of that summit (link here), where they also look at the progress so far in implementing Draghi’s recommendations.

Overnight in Asia, most equity markets have put in a decent performance, with gains for the KOSPI (+0.9%), the Hang Seng (+0.41%) and the Shanghai Comp (+0.20%), although the CSI 300 (-0.08%) is down slightly. Meanwhile in Japan, markets are closed for a public holiday, but futures on the Nikkei (+0.68%) are also pointing higher this morning, with those on the S&P 500 (+0.24%) rising as well. Otherwise, we also have the latest Chinese inflation data overnight, which showed that CPI decelerated by more than expected to +0.2% in January (vs. +0.4% expected). By contrast however, the PPI reading rose by more than expected, with a deflation rate of -1.4% (vs. -1.5% expected). So that’s actually the highest PPI reading in 18 months, even though it’s still in deflationary territory.

Looking at the day ahead, data releases include the US jobs report for January, and Italy’s industrial production for December. Central bank speakers include the Fed’s Schmid, Bowman and Hammack, along with the ECB’s Cipollone and Schnabel.

Tyler Durden Wed, 02/11/2026 - 08:29

MrBeast Buys Gen Z Bank Just Weeks After BitMine's $200M Bet

Zero Hedge -

MrBeast Buys Gen Z Bank Just Weeks After BitMine's $200M Bet

Authored by Brayden Lindrea via CoinTelegraph.com,

Beast Industries, the entertainment company founded by YouTuber Jimmy “MrBeast” Donaldson, is acquiring Step, a mobile banking app focused on teenagers and young adults, marking its most significant push into finance to date.

In a post to X on Monday, Donaldson said the motivation behind the acquisition was to equip young people with the tools and guidance needed to navigate personal finance from an early age.

Source: MrBeast

Beast Industries CEO Jeff Housenbold said, "Financial health is fundamental to overall wellbeing, yet too many people lack access to the tools and knowledge they need to build financial security.”

The acquisition cost was not disclosed.

The YouTube channel’s expansion into finance comes after it received a $200 million investment from Ethereum treasury firm BitMine Immersion Technologies in January and a separate trademark filing for “MrBeast Financial” in October.

That trademark filing mentioned "cryptocurrency exchange services,” “cryptocurrency payment processing,” and “cryptocurrency via decentralized exchanges.”

However, it isn’t clear whether that trademark filing is related to the Step acquisition.

Cointelegraph reached out to Beast Industries for comment, but didn’t receive an immediate response.

Step scales to 6.5 million users in 8 years

The Step app aims to help Gen Z users manage money, build credit, earn rewards, and deepen their financial literacy. Spending accounts are Federal Deposit Insurance Corporation-insured through Evolve Bank & Trust.

The banking app has scaled to 6.5 million users since launching in 2018 and has raised around $500 million from the likes of Steph Curry, Justin Timberlake, Will Smith and Charli D’Amelio.

The MrBeast YouTube channel has 466 million subscribers, the largest channel on the video-streaming platform.

Housenbold said the Step acquisition “positions us to meet our audiences where they are, with practical, technology-driven solutions that can transform their financial futures for the better."

At the time of the strategic $200 million BitMine investment, its chair, Tom Lee, said the company viewed the deal as a long-term bet on the creator economy, stating:

“MrBeast and Beast Industries, in our view, is the leading content creator of our generation, with a reach and engagement unmatched with GenZ, GenAlpha and Millennials.”

Lee said that BitMine’s corporate values were “strongly aligned” with Beast Industries, but didn’t mention anything about integrating crypto at the time.

Tyler Durden Wed, 02/11/2026 - 08:05

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