OIL: Oil Prices on Hold as Tariff Headlines Dominate. 

Since Monday's near fresh record peak of 7.3734, USD/CNH has largely been tracking south. We saw a brief blip higher above 7.3300 as China responded to the 10% tariff imposition with its own tariffs and other measures. However, China's move wasn't seen as an escalation. USD/CNH tracks at 7.2870 in early Wednesday dealings, after a 0.34% gain for Tuesday's session. In US trade, the Golden Dragon equity index rose 2.65%. 

• US President Trump didn't seem concerned by China’s retaliation and will speak to President Xi “at the right time”.
• Intra-session lows on Tuesday came at 7.2746. Current spot levels are close to the 50-day EMA, we are back sub the 20-day EMA, which is near 7.3000. The 100-day EMA remains further south close to 7.2540.
• Onshore markets return today after the LNY break, with eyes on the USD/CNY fixing. The last fixing was 7.1698 (record on Jan 27 last week). Since then, USD indices have gravitated higher, but only marginally. The risk may be for a relatively benign outcome given recent tariff implementations by both countries and China not wanting to inflame tensions any more with fresh sharp yuan depreciation pressures.
• Also benefiting the CNH during US trade was softer US data, including the JOLTS print, which helped drag US yields lower.
• Today on the data front we have the Caixin services PMI for Jan. The market consensus is 52.4, versus 52.2 prior. 

US President Donald Trump and Israeli Prime Minister Benjamin Netanyahu are shortly due to deliver a joint press conference from the White House, following a bilateral meeting. LIVESTREAM

• The presser comes amid concerns about the implementation of phase two of the Gaza ceasefire agreement that went into effect last month. Axios reports: “Netanyahu wants to convince Trump not to force him to implement the deal's second phase, so he can have more time to dismantle Hamas.”
• Trump told reporters at the Oval Office yesterday that there are “no guarantees” the Gaza cease-fire will hold: “We'll see how it all turns out. It's complex, but I think he's going to do very well."
• The Washington Post notes Trump's Middle East envoy, Steve Witkoff and Trump’s national security advisor, Mike Waltz, met yesterday with Netanyahu, whose office described the meeting as “positive and friendly.”
• Today's bilateral meeting is also likely to have touched upon Iran’s nuclear programme and a plan to normalise relations between Israel and Saudi Arabia – a key pillar of Trump’s Middle East policy. 

In local morning trade, NZGBs are 1bp cheaper after the Q4 Labour Market showed the jobless rate rose to a four-year high at the end of last year as hiring fell in the wake of a sharp recession.

• Unemployment climbed to 5.1% from 4.8% in Q3, as expected by economists. Employment dropped 0.1% from the previous three months, less than estimates of a 0.2% decline, while annual wage inflation slowed. 
• Private wages growth was 0.6% q/q, as expected.
• Overnight, US tsys see-sawed off early session yield highs to finish near the bottom end of the session range as concerns over the Trump administration's trade policies moderated, notwithstanding China’s tariff tit-for-tat.
• US tsys richened after JOLTS data, job openings were lower than expected in Dec at 7.6m (cons 8.00m) after an upward revised 8.156m (initial 8.098m) in Nov. Focus turns to Wednesday morning's ADP private employment data.
• Swap rates are 1-2bps higher.
• RBNZ dated OIS pricing is little changed. 50bps of easing is priced for February, with a cumulative 129bps by November 2025.
• On Thursday, the NZ Treasury plans to sell NZ$225mn of the 4.50% Apr-27 bond, NZ$225mn of the 2.00% May-32 bond and NZ$50mn of the 2.75% May-51 bond.