This week's key agenda: Trump tariffs may escalate, Powell testifies before Congress, key economic data from China and the U.S., BYD's intelligent strategy press conference

A summary of major financial events from February 10 to February 14, all in Beijing time:

Key focus for the week: Trump hints at announcing "reciprocal tariffs," Powell testifies before Congress, the timing of interest rate cuts becomes a key focus, China's January financial data may achieve a "good start," and the U.S. January CPI data is expected to remain stubborn.

In addition, BYD held a smart strategy press conference, the Artificial Intelligence Action Summit will be held in Paris, and the U.S. may announce plans to end the Russia-Ukraine conflict at the Munich conference in Germany.

"Tariff War" Escalation? Foreign Media: Trump Hints at Announcing "Reciprocal Tariffs" Next Week

According to Global Times, citing reports from the U.S. political news site "Politico" and Reuters, U.S. President Trump stated on February 7 local time that he would announce the implementation of reciprocal tariffs next week. Reuters commented that Trump's "offensive" represents a "significant escalation" in tearing up and reshaping global trade relations in favor of the U.S.

Trump announced this news during a meeting with visiting Japanese Prime Minister Shigeru Ishiba on February 7, stating, "I will announce next week the implementation of reciprocal trade so that we are treated equally with other countries. We are asking for neither more nor less."

Trump also mentioned that the relevant tariff measures would apply to all countries, with the announcement possibly coming on "next Monday or Tuesday."

The report also noted that previously, Trump had threatened to impose a uniform 10% or 20% tariff on all imported goods and tasked the government to study this possibility. On February 2, Trump stated that he planned to impose tariffs on EU products soon and reiterated his dissatisfaction with the U.S.-EU trade deficit and the EU's insufficient imports of U.S. automobiles and agricultural products.

Powell Testifies Before Congress, Timing of Interest Rate Cuts Becomes Key Focus

Federal Reserve Chairman Powell will attend a congressional hearing next week. According to an announcement from the Federal Reserve on Thursday, Powell will testify before the Senate Banking Committee and the House Financial Services Committee on Tuesday and Wednesday, respectively.

Statements regarding the timing of interest rate cuts have become a market focus, with analysts predicting that Powell may emphasize that economic resilience is a key reason the Federal Reserve is not in a hurry to cut rates further. Given the good economic conditions, Federal Reserve officials also have time to assess the impact of the new Trump administration's changes in trade, immigration, and tax policies.

In a January press conference, Powell stated that the Federal Reserve is not in a hurry to cut rates further. Tim Duy, chief U.S. economist at SGH Macro Advisors, pointed out that this week, Federal Reserve officials have reached a consensus on Powell's cautious stance and hinted that no action would be taken before the second half of this year.

Powell's congressional "speech draft"—the Federal Reserve's semi-annual monetary policy report—indicates that the overall U.S. economy is robust, the labor market is stabilizing, inflation is further easing, and when considering future interest rate adjustments, data, outlook changes, and risk balance will be assessed "cautiously"; valuations in the stock market, corporate bonds, and residential real estate market remain high, with increased valuation pressure at these high levels; the report mentions tariffs only twice, stating that the outlook for taxation has driven the recent rise of the dollar

China's January Financial Data, US January CPI Data

• China's January social financing and credit data will be released irregularly from the 9th to the 15th.

The financial data for January 2025 is about to be released, and January is usually a big month for credit. Analysts believe that multiple factors will support a strong start for credit issuance, with the new credit scale expected to rise significantly month-on-month and slightly less year-on-year.

CICC analyst Lin Yingqi predicts that the new credit scale in January may reach 4.5 trillion to 5 trillion yuan, close to the level at the beginning of 2024. The new credit will mainly be directed towards public loans for infrastructure, high-tech manufacturing, and green loans.

Combining the forecast for new credit scale, Lu Zhengwei, chief economist of Industrial Bank, stated that the incremental social financing scale in January is expected to be around 6.4 trillion yuan. From the perspective of government bonds, the issuance pace of government bonds in the first quarter of 2025 is expected to accelerate significantly compared to the same period last year, with the financing scale of government bonds in January expected to increase year-on-year.

Everbright Securities predicts that the "strong start" for credit in January and the advance issuance of government bonds will be the main forces supporting the growth of social financing. It is expected that the new social financing in January will be around 7 trillion yuan, an increase compared to 6.5 trillion yuan in the same period last year, maintaining a growth rate of 8%.

• Wednesday 21:30 US January CPI Data

The US Bureau of Labor Statistics will release data on Wednesday, with forecasts indicating that the core CPI in January will rise by 0.3% month-on-month, marking the fifth increase in the past six months. Year-on-year, the core CPI is expected to rise by 3.1%, slightly lower than the previous value, but only down 0.2 percentage points from mid-last year.

After a significant decline in inflation in 2023 and early 2024, the cooling of US inflation has almost stalled, similar to the recovery of the job market at the end of last year. Data from the Labor Department on Friday showed that the average increase in employment over the three months ending in January was 237,000, the highest level since early 2023.

This helps explain why Federal Reserve officials are maintaining interest rates unchanged after a one percentage point cut in 2024, and additionally, policies proposed by the Trump administration may lead to continued high inflation.

Bloomberg economists analyze that Powell stated the Federal Reserve needs to see "significant progress" in inflation or some softness in the labor market before considering adjusting interest rates. The January CPI may be mixed, with both overall and core CPI expected to rise by 0.3% month-on-month.

Additionally, the CPI report will include an annual update on seasonal adjustment factors and a re-weighting adjustment of the index components.

Other Important Data, Meetings, and Events

• BYD Intelligent Strategy Launch Conference

BYD will hold an intelligent strategy launch conference on February 10, introducing the "Eye of God" advanced intelligent driving system. Excitingly for the market, media reports suggest that BYD plans to extend the "Eye of God" to models priced at 100,000 yuan. This will not only drive BYD's own sales growth but also disrupt the entire intelligent driving industry chain.

The "Eye of God" is an advanced intelligent driving assistance system independently developed by BYD, featuring functions such as no-map urban navigation (CNOA), narrow passage navigation, high-speed navigation, and full-scene intelligent parking. Its core advantages lie in multi-sensor fusion, self-developed high-performance computing platforms, and end-to-end large model algorithm architecture, relying on China's largest vehicle cloud database to achieve a high-level intelligent driving experience across high-speed, urban, and parking scenariosAnalysis suggests that BYD's previously exclusive intelligent driving features for high-end models are expected to enter the affordable market, further promoting the concept of "technological equality."

• The Artificial Intelligence Action Summit will be held in Paris

The Artificial Intelligence Action Summit will take place from February 10 to 11 in Paris. According to the Global Times, the summit is co-hosted by France and India, attracting leaders and representatives from over 100 countries and tech giants. Before the official opening of the summit, the "Artificial Intelligence Action Week" activities conducted under the summit framework began on the 6th local time.

Reports indicate that the summit will focus on topics such as open-source technology, clean energy, mitigating labor disruptions in the global AI market, and promoting sovereignty. The meeting will also seek to reach a non-binding communiqué on AI governance principles. Compared to the 2024 summit, where participants focused on security commitments, this summit is more concerned with how to distribute the benefits of AI to developing countries through more economical models produced by French startup Mistral and Chinese company DeepSeek.

• Munich Conference in Germany, the U.S. may announce a plan to end the Russia-Ukraine conflict

According to the Global Times, the U.S. is expected to announce a plan aimed at ending the Russia-Ukraine conflict as early as next week at the Munich Security Conference (Munich Security Conference), which may include a temporary freeze of the conflict.

The Munich Security Conference will be held from February 14 to 16 in Bavaria, Germany, less than 10 days before the third anniversary of the Russia-Ukraine conflict. Reports suggest that recent comments from figures like Kellogg imply that the plan will seek "peace through strength," as stated by Trump allies.

Based on currently disclosed information, the plan may include freezing the conflict and placing territories controlled by Russian troops in a pending status while providing security guarantees to Ukraine to ensure that Russia does not launch another attack.

New Investment Opportunities

During the week (February 10-14), there will be one new stock listed on the Hong Kong stock market. Gu Ming will debut on the Hong Kong main board on February 12, potentially becoming the third stock in the new tea beverage sector. Additionally, the B2B trading platform Redcloud Holdings Ltd (RCT) will go public in the U.S. on February 13, Thursday.

A total of 10 new funds (combined statistics for Class A and Class C) will be issued during the week.