Resilient Investing for Uncertain Times

Period January 25–31, 2026 Key Economic Indicators US monetary policy: Policy rate held at 3.50–3.75% / cuts likely hinge on clearer disinflation. US Consumer Confidence: 84.5 vs 90.9 expected / renewed downside risk to consumption. US PPI (Dec): +0.5% m/m vs +0.3% expected / services-led pickup revives pipeline inflation concerns. Tokyo core CPI (Jan): +2.0% y/y vs +2.2% expected / temporary easing, but underlying stickiness remains. Japan services prices (Dec): +2.6% y/y vs +2.7% prior / labor-cost pass-through stays firm. China manufacturing PMI (Jan): 49.3 vs 50.0 expected / back in contraction; non-manufacturing also fell to 49.4. Major Economic & Geopolitical News The Fed stayed on hold. Cuts are still discussed, but long yields can reprice quickly if inflation re-accelerates or policy uncertainty rises. Key US data releases were pushed back, widening “data gaps.” Thin calendars tend to amplify headline-driven volatility. Japan shows softer ...

Observation Period: 2026/01/25 (Sun) – 2026/01/31 (Sat) 【Overview】 This week felt like a “rates are broadly range-bound, but the market’s interpretation can swing on a single headline” environment. Rather than monetary policy itself, policy-operational uncertainty amplified moves in FX, yields, and risk assets—highlighting fragile sentiment. Earnings from Microsoft and Meta reaffirmed continued AI investment, yet markets became more selective given the scale of spending, so “good news” did not translate into uniform price action. Credit indicators did not signal an imminent break, but a quiet widening bias persisted, while volatility/FX reactions looked faster—tilting the week toward “Caution” on both AI expectations and liquidity. 【Variable Check (①–⑥)】 ① Capital Cost (= Rates + Liquidity): Long-term yields: □ Down ■ Flat □ Up Liquidity: □ Improving ■ Flat □ Worsening Comment: U.S. 10-year yields largely stayed within a range, and the main story was “interpretation d...

United States Sticky inflation remains in focus, keeping downward revisions to rate-cut expectations on the table and increasing sensitivity in rates and growth stocks. Recent wholesale inflation (PPI) was reported to have come in above expectations, reviving “inflation re-acceleration” concerns alongside the soft-landing narrative. Speculation around upcoming Fed appointments is adding policy uncertainty and could feed volatility in Treasuries and the dollar. Market implication: unless wages and services inflation cool decisively, longer-term yields may stay elevated. Europe The economy appears to be slowing without a clear break, but any acceleration in the pace of easing likely requires more confirming data—so yields may not fall in a straight line. With euro-area growth figures released, the more resilient growth looks, the easier it is for the ECB to justify a “not in a hurry” stance on cuts. Defense and security cooperation is becoming more prominent, potentially influencing fisc...

United States Federal Reserve (FRB) is increasingly seen as cautious on “additional cuts,” with debate clustering around a “neutral” policy range near 3.50–3.75%. On inflation, the December U.S. PPI was reported at +0.5% m/m, leaving a lingering “re-acceleration” concern and capping how much the front end can rally. Equities digested policy/personnel headlines and earnings; indices stayed heavy near highs as discount-rate sensitivity remains a constraint. U.S. 10-year yields around ~4.24% keep the backdrop tilted toward a firmer dollar and a higher hurdle for risk assets. Europe The euro area narrative leans toward “muddling through” (recession avoided) but with limited upside catalysts. Inflation is cooling but still sticky enough to temper expectations for rapid/deep easing. European Central Bank (ECB) -related surveys pointing to firmer medium/long-run inflation expectations can push the market toward a more cautious easing path. Bund yields around ~2.85% keep financial conditions ...

United States The Fed outlook remains a tug-of-war between “disinflation hopes” and “growth slowdown signals,” keeping rate expectations volatile. Wage/cost indicators (e.g., productivity and unit labor costs) are key for judging how durable the disinflation trend is. Trade balance and consumer strength can swing the dollar narrative (safe-haven demand in risk-off vs. softer growth capping USD). Market implication: if long-end yields re-accelerate, high-valuation tech (especially AI-linked names) is more exposed to multiple compression. Europe Europe is increasingly priced for an easing cycle, with widening rate differentials depending on each country’s growth/inflation mix. The recovery looks gradual, so markets may favor themes tied to external demand (U.S./China), resources, and defense over pure domestic cyclicals. Bank lending and stable credit costs are key gauges for whether real estate and financials are “bottoming.” Market implication: further rate declines can weigh on the eu...