Research by the European Central Bank found that the rerouting of trade flows away from the US because of tariffs was "modest" and affected only a narrow range of goods. The main drivers of China's export expansion were weak domestic demand, government support, and a fall in export prices amid a weak yuan.

In 2025, China's total exports grew by 5.5%. Shipments to the US fell by 20%, while exports to the euro area increased by 8%. Growth was also recorded in Asia, Africa, and Latin America. The influx of cheap Chinese goods into Europe produced a "strong disinflationary effect" in the second half of 2025, ECB Governing Council member François Villeroy de Galhau noted. He warned that the trend could prevent inflation from reaching the 2% target.

The ECB also cautioned that the full picture of the trade war's consequences has not yet emerged due to delays in logistics and customs clearance.

German Chancellor Friedrich Merz has announced plans to pursue a strategic partnership with China during his visit next week. This move signals Germany’s shift toward diversifying its international relationships amid mounting tariff pressures from Washington.

Speaking in Passau, the chancellor emphasized the inseparability of foreign and economic policy. “We have a strategic interest in finding partners in the world who think and act like us, and who are willing to shape the future together,” Merz said, outlining Germany’s aim to strengthen alternative alliances.

Commenting on US tariff policy under President Donald Trump, Merz took a firm stance: “If the Americans believe that, with their tariff policy, they should exert influence around the world, if they believe that tariffs are more important than taxes at home, then that is something that the Americans, of course, can decide for themselves. But it is not our policy.” He warned that the European Union is prepared to defend itself against any unwanted measures, citing the Greenland situation as an example of European unity.

According to Merz, Germany is following a “dual strategy”: remaining open to partnerships while maintaining enough cohesion within the EU to protect its own interests.

Asset management firm WisdomTree has detected a structural shift in the crypto market: the euphoria of retail investors is now replaced by the logic of institutional asset management. Analysts say the crypto industry has entered a mature phase of development.

The discussion has moved from 'Should we own cryptocurrency?' to 'How do we responsibly integrate it?', WisdomTree notes. Bitcoin's volatility is waning as funds and corporations add it to their balance sheets as a strategic portfolio component.

Analysts say the crypto industry's further development will depend on the quality of regulation and the depth of digital asset integration into the traditional financial system. If a balance between oversight and innovation is maintained, cryptocurrencies can assert themselves as a standalone asset class. Meanwhile, Bitcoin's MVRV ratio has fallen to 1.1, bringing the asset closer to undervalued territory, according to data from CryptoQuant. 

US Vice President J.D. Vance said China’s stance on Bitcoin should be a message to the United States. If the Communist Party of China is avoiding Bitcoin, maybe Washington should do the opposite and embrace it, he said.

Economist Peter Schiff offered a different interpretation: he argued that China’s authorities are deliberately steering clear of cryptocurrencies and instead investing in gold and manufacturing. In his view, the US is wasting capital on buying and mining BTC, while the People’s Bank of China has been increasing its gold reserves for 15 months in a row.

Analysts underscore a divergence in strategies: China is focused on long‑term investments with stable returns, whereas the US is betting on short‑term capitalization. Interestingly, federal US authorities are not building gold reserves, focusing instead on developing the blockchain industry.

While the broader cryptocurrency market is experiencing gains driven by positive inflation data from the United States, Dogecoin (DOGE) is testing support at the $0.09 level. Analysts note that the token has entered a rare accumulation zone that has historically preceded significant cyclical lows.

A crypto analyst at Cryptollica has identified this zone on the long-term DOGE chart in relation to the US dollar index (DXY). The current correction has brought the price back to its historical “launch pad,” a level that served as resistance in early 2021 and as support during the bear markets of 2022 and 2023.

Following a full market cycle, such zones provide an optimal risk-reward ratio for entry. In previous cycles, including those in 2015, March 2020, and mid-2022, reaching this “red zone” signaled capitulation among sellers before a sustained rally.

Starting in the third quarter of 2026, the European Central Bank will introduce a permanent mechanism for providing liquidity in euros to central banks outside the European Union. This decision aims to bolster the international standing of the single currency.

"We must avoid a situation where that stress triggers fire sales of euro-denominated securities in global funding markets," ECB President Christine Lagarde stated. She emphasized that having a "lender of last resort" would provide partner central banks with confidence in liquidity availability during critical moments.

This move fits into the ECB’s consistent strategy to enhance the international role of the euro. In 2025, the currency’s share in global transactions exceeded 25%, fueled by a decline in the dollar's dominance. Meanwhile, China is ramping up efforts to internationalize the yuan. President Xi Jinping has announced the goal of making it a global reserve currency.

Austan Goolsbee, president of the Federal Reserve Bank of Chicago, said the latest consumer price index (CPI) presents a mixed picture. Despite a slowdown in the headline measure, services inflation remains “untamed,” calling into question a quick return to the 2% target.

In an interview with Yahoo News, Austan Goolsbee emphasized that inflation has effectively settled near 3%. The main worry is the services sector, where inflationary pressure remains stubbornly high. The annual CPI for January came in at 2.4%, the lowest since May 2025, but the index’s structural components give the Federal Reserve no reason for premature optimism.

The policymaker acknowledged he does not know exactly to what extent the current Federal Reserve policy is restraining economic activity, but he left the door open to future rate cuts. At the same time, he stressed that the central bank will need irrefutable evidence of further slowing inflation before easing monetary policy.

Austan Goolsbee identified the American consumer as the main pillar of economic resilience, with spending supported by a steady labor market. He also expressed hope that the impact of import tariffs on consumer inflation has already peaked and will ease going forward. 

Artificial intelligence has emerged as a key driver of volatility and a “defining factor” in the dynamics of the European stock market. According to a recent report by UBS, the performance gap between AI developers and companies whose business models are vulnerable to automation has reached critical levels: +85% for AI developers versus -50% for traditional firms over the past three years.

UBS analysts highlight a group of high-risk service providers whose revenues are directly tied to the amount of labor time spent. Giants like Capgemini, Adecco, and Teleperformance now face the threat of being “replaced by AI labor.”

1. Coding and support: Automation of routine tasks reduces clients’ willingness to pay for human resources.

2. Margin pressure: If companies cannot transition to a pay-for-performance model or implement their own AI solutions, their “economic engine” risks stalling.

The MSCI Europe Software & Services Index has underperformed the broader market by 17% over the past month, highlighting investor concerns regarding the future of outsourcing.

Pressure has not only affected service companies but also aggregator platforms such as Rightmove and Auto Trader. AI tools capable of collecting data directly from websites undermine the value of paid placements, forcing these platforms to seek new ways to demonstrate the uniqueness of their data.

The advertising sector is witnessing a radical decline in content production costs, with traditional TV formats and agencies at risk of losing contracts. Clients are increasingly shifting creative processes in-house by utilizing automated tools.

At the other end of the spectrum are the “structural winners” — companies with deep integration into corporate architecture. SAP stands out as a benchmark: the company has reported a 30% increase in its cloud segment and expects to save about €2 billion through AI implementation.

UBS emphasizes that the market has entered a phase of “indiscriminate asset sales” for those at risk. Analysts believe that the next stage of the investment cycle will shift from acquiring pure AI infrastructure to seeking out user companies that can convert technologies into measurable growth in net profits.

Choosing stocks now requires a clear distinction between the “victims of progress” and those leveraging AI to defend their market positions.

Brazil, which holds nearly a quarter of the world’s rare earth metal (REM) resources, remains only a nominal player on the global market. Despite an estimated 21 million tonnes of rare-earth oxides in the ground, the country’s actual contribution to global supply is still below 1%.

Brazil’s main advantage is ion adsorption clays. Unlike hard-rock deposits, the rare-earth elements in these clays are weakly bound, which in theory promises lower CapEx and simpler extraction. The Serra Verde project has already showcased the commercial viability of this idea and has become a driver of national exports.

However, a technological monopoly in Beijing stands in the way of Brazil becoming a “rare earth superpower.” Meanwhile, China controls:

* 69% of unseparated oxide production;

* 100% of heavy rare earth separation capacity;

* The overwhelming share of high‑tech magnet and alloy manufacturing.

The structural trap for Brazilian firms lies in how value is distributed along the supply chain. Mining concentrate typically captures only 10–20% of the final product price. The main margins sit in separation and refining (40–50%), and in magnet manufacture (30–40%).

Without its own processing capacity, Brazil is forced to remain a supplier of cheap feedstock, effectively subsidizing Chinese refining.

Beyond the lack of processing technology, the industry faces a severe credit shortage. Unlike many Western jurisdictions, Brazilian law does not allow mining licenses to be used as collateral. That makes local players critically dependent on foreign capital.

State institutions such as BNDES and Finep have launched support programs for strategic minerals, but high entry barriers exclude most junior companies.

Brazil’s geological potential is undeniable, but experts warn that resources alone do not guarantee the status of an alternative supplier. Until the country presents an integrated national strategy that links mines to downstream metallization plants, the “rare earth breakthrough” will remain a statistical anomaly in US Geological Survey reports. 

A February survey by Bank of America reveals that investor sentiment toward the US dollar has fallen to the most bearish level recorded since tracking began.

The study, conducted from February 6 to 11 among 42 fund managers with combined assets of $702 billion, found that net dollar positions have dropped to levels not seen since January 2012, surpassing the lows of April 2025 included in the current sampling.

Bearish sentiment has strengthened despite reduced concerns regarding the independence of the Federal Reserve. Following Kevin Warsh’s nomination to head the Fed, the perceived risks of pressure on the regulator diminished among investors. However, it failed to spark a rebound in demand for the dollar or a reassessment of views on US assets, according to BofA strategists led by Ralph Proysser.

Changes in asset allocation confirm a prevailing trend: the majority of respondents prefer to either increase currency hedging or reduce investments in US assets.

Long-term expectations for the dollar’s role also remain pessimistic. A staggering 87% of respondents predict a further decline in the dollar’s share of global reserves, with an increasing number anticipating that this process will accelerate.

Short dollar positions have become one of the most popular “overcrowded” trades. While long positions in riskier assets are still often dubbed the most overloaded strategy, short positions in the dollar have noticeably increased in recent months.

Strategists note that most responses were collected prior to the release of the latest robust US jobs report. The resilience of macroeconomic data and a reassessment of expectations regarding Federal Reserve interest rates could partially alleviate pessimism and provide short-term support for the dollar.

However, it remains to be seen whether reduced US investments will lead to sustainable outperformance over the euro area. Analysts believe that potential beneficiaries of capital flows are more likely to be found in the debt market.

An increasing number of investors are expecting a shift of funds from the US into euro-denominated bonds. Duration positions in key European countries relative to the US have reached their highest levels not seen since 2013.

Despite the uptick in investments in European duration, overall sentiment towards the region has become more cautious. Investors are building positions, but their optimism has waned a bit.

In emerging markets, sentiment remains constructive. However, signs of cooling are becoming more pronounced. Positions in emerging market currencies and related expectations have reached highs not seen since the COVID-19 pandemic.

At the same time, managers have increased their cash allocations and reduced their previously expressed overweight in local bonds and emerging market debt in hard currency. This move indicates tactical caution rather than a strategic shift in perspective.

The "cockroach theory" in finance suggests that a single visible failure often signals deeper, hidden problems among other players in a sector. Originally applied to corporate scandals around earnings and accounting, the concept also applies to AI companies and crypto projects that depend on trust, access to capital, and the regulator’s stance.

The theory can reshape entire markets: in 2001, the collapse of Enron exposed weaknesses in corporate reporting more broadly; regulators found similar misconduct at other firms, trust in the sector weakened, and capital fled fragile organizations. Crypto markets are now under similar pressure. High‑profile cases involving Changpeng Zhao and Sam Bankman‑Fried damaged confidence in centralized exchanges and raised concerns about compliance and risk management across the industry.

However, cryptocurrencies differ from traditional companies. Tokens cannot file for bankruptcy in the usual sense, and blockchains keep functioning until token values collapse entirely. Bad users can exit a network, but the network itself is able to operate. Cryptocurrencies are increasingly finding practical use in cross-border payments and as stores of value in unstable economies.

The AI sector, which saw explosive growth over the past two years, is also undergoing a correction. Several well-known investors have reduced holdings in major high-tech stocks. Peter Thiel has completely sold his NVIDIA stake and much of his Tesla shares, which may signal a reassessment of risk in the segment. 

According to Federal Reserve Governor Christopher Waller, the crypto market is becoming increasingly intertwined with traditional finance. He said that its recent sell-off was partly driven by financial firms' actions. Following the Trump administration’s arrival, those firms increased their exposure to digital assets but later pared back their positions after Congress failed to swiftly enact market structure legislation for cryptocurrency. The resulting regulatory uncertainty scared off large investors and dampened appetite for digital assets.

Waller noted he was not surprised by the crypto pullback, calling volatility “part of the game” with these assets. Since reaching its October high of roughly $126,000, Bitcoin has plunged by about 45% and is currently trading near $68,500 after briefly dipping to $60,000. The official warned that investors could just as easily reap gains as suffer losses, describing such volatility as simply the nature of the business. “Prices go up. Prices go down. If you don’t like it, don’t get in,” he said.

Waller also pledged that the Fed will introduce simplified, special payment accounts in 2026. These accounts will provide fintech and crypto firms with limited, direct access to the central bank system so they can collaborate with regulators. Crypto firms welcomed the plan, while traditional banks reacted more skeptically. These accounts will come with fewer privileges. Holders will not be able to earn interest, and their balances will be capped. Last year, Waller proposed allowing banks to issue dollar‑pegged stablecoins to broaden global access to the US currency. He also encouraged exploring use cases for tokenization and smart contracts in payments.

On February 10, the European Parliament endorsed the issuance of a digital euro in both online and offline modes, aligning with the European Central Bank’s approach and increasing the likelihood of solidifying this model ahead of key discussions in the ECON committee. In its statement, the Parliament noted that the digital euro is “essential to strengthening EU monetary sovereignty, reducing fragmentation in retail payments, and supporting the integrity and resilience of the single market.” The Parliament also warned that leaving payment digitization solely to “private and non-European actors” could lead to new forms of exclusion for both users and merchants.

The decision overturns an earlier proposal by Fernando Navarrete from October 2025, who suggested creating only an offline version and allowing online access only in the absence of a private solution. ECB representatives, led by Piero Cipollone, emphasize that the two modes complement each other and bring the digital currency closer to cash. If national governments and the European Parliament agree on the necessary legislation by 2027, the ECB could launch a pilot program, with a full rollout planned for 2029.

This initiative is developing amid growing concerns over Europe’s reliance on American payment systems. In early February, European Payments Initiative CEO Martina Weimert urged for urgent action to reduce dependency on Visa and Mastercard, which control about two-thirds of transactions in the euro area. Thirteen EU countries do not even have national alternatives to international card schemes. The EPI consortium, which includes BNP Paribas and Deutsche Bank, has launched the Wero payment service. It has already attracted tens of millions of users and is expected to expand into the online market by 2027.

The banking sector views the digital euro with caution, fearing that a state-backed digital currency could duplicate the functions of private solutions like Wero and undermine incentives for innovation in the payments business. Nonetheless, the ECB considers the project a structural response to geopolitical risks and potential pressure from Washington due to the dominance of American payment operators.

A large share of investors has shifted attention to services for artificial intelligence operators, triggering capital outflows from cryptocurrencies and amplifying turbulence in digital assets. Wintermute analysts say this capital rotation has constrained bullish potential in crypto, and with low spot trading volumes, price swings are likely to be limited. A sustained recovery in the market quotes of popular cryptocurrencies will require renewed demand from retail and institutional investors, which is not yet evident.

The market is also suffering from a high concentration of coins among a small number of large holders, creating a classic “bottleneck” effect. Even modest selling by these holders can trigger sharp moves and increase volatility. Uncertainty in global financial markets reduces the willingness of new investors to enter the crypto market. Under these conditions, demand recovery has slowed, and digital assets remain highly vulnerable to external shocks.

Earlier, Bitwise adviser Jeff Park said that risk management mechanisms at large institutional investors played a central role in the crypto sell-off. The combination of factors — capital outflows into the AI sector, high asset concentration, and institutional risk controls — creates structural obstacles to a short‑term recovery in the crypto market. 

Ratings agency Moody’s forecasts India’s real economic growth at 6.4% for the fiscal year 2026-2027, which begins in April. According to the agency, India is likely to remain the fastest‑growing economy among G20 nations in the upcoming fiscal year. The country’s banking sector is expected to remain stable over the next 12 to 18 months, bolstered by a favorable economic environment, high asset quality, profitability, liquidity, and government support.

Moody’s forecast is notably more conservative than the projections from India’s Ministry of Finance. In its annual economic review presented to Parliament, the ministry anticipates growth rates between 6.8% and 7.2% for fiscal year 2026-2027. Despite external factors of uncertainty in key trading partner countries, disruptions in global trade due to rising tariffs, and capital market volatility, which could impact Indian exports, the ministry expressed confidence in achieving these figures.

The disparity in forecasts between Moody’s and the Indian government reflects their differing assessments of how global risks will impact the Indian economy. However, both projections affirm India’s status as one of the key drivers of global economic growth.

French President Emmanuel Macron said in interviews with several news agencies that Europe is facing a geopolitical and geo-economic emergency. The policymaker warned that if the EU does not step up investment in the economy and remove barriers to rapid development, American technologies and Chinese imports will “push the continent’s states aside.” “If we do nothing, Europe will be swept away in five years,” Süddeutsche Zeitung quoted the French president as saying.

Emmanuel Macron also acknowledged a strategic mistake by Europe: by turning away from Russian energy resources, the euro zone has become dependent on the United States, whose firms supply roughly 60% of the LNG used by European countries. This challenges energy independence and raises costs for European industry, undermining competitiveness.

The critical situation in France confirms Macron’s concerns. In 2025, the number of plant closures exceeded the number of new openings for the first time since 2013 — there were 63 more shutdowns than start-ups. That occurred despite record industrial investment of €125 billion, half of which was allocated to data center projects rather than to real production.