By Jamie McGeever

(Reuters) – A look at the day ahead in Asian markets. 

Day two of the second Donald Trump administration, and exchange rates are in the global market crosshairs as investors nervously try to figure out how to trade the immediate fog shrouding the U.S. president’s trade policy.

That Trump will impose tariffs on imports from many of America’s major trading partners seems almost certain. On what products and countries, and to what degree, are unknown right now, leaving the dollar and other currencies vulnerable to choppy and volatile trading.

The same applies to other asset classes too, although the immediate impact is being felt more acutely in FX. Implied volatility across G10 currencies as measured by Deutsche Bank (ETR:DBKGn)’s ‘DBCVIX’ index remains relatively high, although it did pull back late on Tuesday.

Investors will be relieved that Trump chose not to hit major trading partners with tariffs on his first day in office. They will be hoping his approach to tariffs follows the path SocGen analysts sketched out last week – “talk tough, aim high, but act gradually.” 

But the president’s off-the-cuff remarks to reporters late on Monday that some tariffs could come on Feb. 1 triggered an immediate reversal in the dollar, and served a timely reminder of how difficult the market terrain will be for investors to navigate in the coming weeks and months.

The dollar looks stretched on positioning, sentiment and valuation metrics – hedge funds last week held the biggest net long dollar position in nine years; ‘long dollar’ is one of investors’ most crowded trades, according to Bank of America’s latest fund manager survey; and Citi analysts reckon the currency is overvalued by 3%.

But that doesn’t mean it can’t go even higher, which is likely if Trump follows through with his more extreme protectionist measures and fiscal policies, Citi analysts warn. Rising Treasury yields and term premiums have tended to be dollar positive in recent years, they note.

Meanwhile, the outlook for markets in Asia on Wednesday is fairly positive following a day of calm on global FX markets, falling Treasury yields and solid gains on Wall Street. Nikkei futures are pointing to a rise of around 0.75% for Japanese stocks at the open in Tokyo.

China’s markets will be under scrutiny following their decent start to the week on the back of Trump’s initial ‘go slow’ signals on tariffs. The yuan on Tuesday rose the most since early November, as per the central bank’s daily fixing, and on Monday registered its best day in spot market trading since August. 

The main economic events in Asia on Wednesday are the release of New Zealand’s latest consumer inflation figures and an interest rate decision and guidance from Malaysia’s central bank. 

Here are key developments that could provide more direction to markets on Wednesday:

– New Zealand inflation (December)

– Malaysia interest rate decision

– World Economic Forum in Davos 

By Michelle Nichols

UNITED NATIONS (Reuters) – U.S. President Donald Trump “sees great promise in the United Nations if it focuses on its founding mission of international peace and security,” his nominee to be ambassador told the U.S. Senate Foreign Relations Committee on Tuesday.

Elise Stefanik, a member of the House of Representatives, is expected to be confirmed by the Senate as ambassador to the 193-member world body, a position that will be part of Trump’s cabinet for his second term in office, which began on Monday.

“If confirmed, I will work to ensure that our mission to the United Nations serves the interests of the American people and represents President Trump’s America First peace-through-strength foreign policy,” she said.

Stefanik took a traditional U.S. approach to the U.N. role, pledging to seek reform of the world body and its agencies and combat what Washington describes as anti-Israel bias and growing Chinese influence within the United Nations and globally.

“This is a long-term strategy that they have at the United Nations, and we need to have strong American leadership working with our allies to push back on this,” she said of China.

The Senate committee’s questioning of Stefanik came after Trump ordered a 90-day pause in foreign development assistance pending assessments of efficiencies and consistency with his foreign policy. The move raised questions because the U.S. Congress sets the federal government budget.

U.S. foreign assistance can range from military and economic to humanitarian aid.

Democratic Senator Chris Coons voiced concern with Stefanik, noting that the order doesn’t clarify the scope of development assistance. He asked whether it would include contributions to the U.N. World Food Program, U.N. children’s agency UNICEF or support for countries like Ukraine and Jordan.

“I hope where there are obvious partnerships that do advance American national interests that they will move forward quickly,” Coons said.

DO PROGRAMS “MAKE AMERICA STRONGER?”

Stefanik earlier referred to the order “regarding all of foreign aid.” She said she was committed to ensuring all U.S. funding for programs at the United Nations was reviewed.

“We need to look at all of our programs, do an assessment of: Do they answer the questions of does it make America stronger, safer, more prosperous? That should be our guiding light and America First peace through strength,” she said.

Deputy U.N. spokesperson Farhan Haq said on Tuesday it was unclear what effect a pause in U.S. assistance would have on U.N. agencies.

Foreign assistance accounts for only about 1% of the total U.S. budget, with Israel long the country that receives the most and Ukraine a major recipient more recently as it combats a Russian invasion.

It was not immediately clear how much money would be affected by Trump’s executive order. For the fiscal year ended on Sept. 30, 2022 – the most recent data available – the U.S. obligated about $70.3 billion in foreign assistance.

The executive order echoes a return to the approach Trump took during his first term in office between 2017 and 2021.

He first came to power proposing to cut about a third off U.S. diplomacy and aid budgets, which included steep reductions in funding for U.N. peacekeeping and international organizations. But Congress pushed back on Trump’s proposals.

During his first day in office on Monday, Trump withdrew the U.S. from the World Health Organization and from the Paris climate deal, for a second time.

Once confirmed, Stefanik will succeed former President Joe Biden’s U.N. ambassador, Linda Thomas-Greenfield, a 35-year veteran of the U.S. Foreign Service who served on four continents, most notably in Africa.

Stefanik will arrive at U.N. headquarters in New York with a large U.S. debt. Washington is the U.N.’s largest contributor – followed by China – accounting for 22% of the core U.N. budget and 27% of the peacekeeping budget.

Haq said the U.S. currently owes a total of $2.8 billion, of which $1.5 billion is for the regular budget. These payments are not voluntary.

A country can be up to two years in arrears before facing the possible repercussion of losing its General Assembly vote. Haq said Washington was “not especially close right now” to losing its vote.

BERLIN (Reuters) – German opposition leader Friedrich Merz, tipped to become chancellor in next month’s election, said on Tuesday U.S. President Donald Trump could prove an interesting partner for Europe provided the region had a strong common negotiating position.

“He is a dealmaker, so let’s think about what we can offer,” Merz said in a discussion at the World Economic Forum’s annual meeting a day after Trump’s inauguration.

“For example …, if we have to take military equipment from the U.S., why don’t we combine our purchases on the European level?” said the chancellor candidate for the conservatives, speaking in fluent English.

Merz could run up against opposition however from Europe’s other major power, France, which has a large defence industry and has often complained when other European Union members have opted to buy U.S. weapons when there are French or European alternatives.

“(Trump) will be an interesting partner for us, provided we are on the European side knowing what we want in common,” said Merz, who like Trump has considerable private sector experience in addition to his political career.

Asked about his policy proposals for ending the war in Ukraine, Merz said he was convinced that the war could have been over already had the West supported Kyiv against Russia’s full-scale invasion more decisively.

When he met with Ukrainian President Volodymyr Zelenskiy later on Tuesday, however, Merz said he would tell him he could rely on Germany – even if it was unclear what the new U.S. administration would do in this critical phase.

(Reuters) – Porsche confirmed its earnings outlook for 2024 of a 14-15% profit margin in a call with investors on Tuesday and said it expected 2025 to remain challenging, according to a note by Bernstein Research analysts.

The investor call was held before a closed period on company information before annual results scheduled for March 12.

Porsche was not immediately available for comment.

The carmaker said that it expects sales volume to decline this year because of the withdrawal of the combustion-engine Macan and 718 from the European Union from the end of June, as well as possible further supply chain issues for the 911 model, according to the note.

Porsche is working to reduce its footprint in China and will provide more detail in its results call on March 12, the note said.

By Carey L Biron

WASHINGTON( Thomson Reuters (NYSE:TRI) Foundation) -The devastation of the Los Angeles wildfires has resonated far beyond Southern California, as local officials and residents across the United States have watched the flames, started among dry vegetation, rapidly jumping from house to house.

The crisis underscores efforts to look beyond the forests and public lands that have been the traditional focus of wildfire risk to more community-based mitigation efforts involving homeowners, private landowners, city planners and other experts.

“For a long time, fire has been communicated as a land management problem,” said Andy McEvoy, a faculty research assistant at Oregon State University’s College of Forestry. “It’s not just land management. There’s a community aspect to it as well. We’re certainly seeing that play out in LA. 

“It’s increasingly evident with these disasters that all sides of the boundary – public and private, municipal and otherwise – all have some part to play in this process,” he told Context/the Thomson Reuters Foundation.

In Oregon, similarly wind-driven fires in 2020 prompted new work on community-wide wildfire mitigation efforts.

McEvoy was involved in a state-wide wildfire risk mapping released this month, which eventually will be the basis for new codes in home and property risk mitigation in some areas.

Yet the draft Oregon maps in 2022 ran into public opposition, including property owners concerned that the new requirements could mean additional costs. The opposition illustrated the challenges in getting residents to recognize the collective importance of measures such as putting fire-resistant siding on a house or clearing out nearby vegetation.

While California has some of the strictest home building codes in the country, many of the homes hit by the recent fires appear to have been older and not retrofitted.

The fires in the LA region have burned more than 40,000 acres, killing at least 27 people and destroying more than 15,000 structures.

“These policies can benefit not just the homeowner that obeys them but can also benefit their neighbors,” said Matthew Wibbenmeyer, a fellow with think tank Resources for the Future who has studied wildfires for 15 years.

A report from the think tank last year found that as the climate changes, parts of the United States such as the Southeast will see most of their wildfire risk coming from private lands.

But reaching residents and private landowners remains tricky, said Wibbenmeyer, noting they may be concerned about cost or simply resistant to removing a favorite bush to tamp down risk.

“But with the event we’re seeing this week (in LA) and in recent years, I think that’s definitely changing.”

NEW URBAN FOCUS

For decades, wildfire in the United States was seen as related to forests.

That began to change in 1985, when major wildfires affected urban areas primarily in Florida, said Michele Steinberg, wildfire division director for the non-profit National Fire Protection Association (NFPA).

As experts looked more towards urban areas, they have come to recognize that key steps could reduce risks but that both individual and community-wide actions were needed.

“We could tell each individual, ‘Do this to your house,’ but if your neighbor doesn’t do it, that’s a huge fuel package burning for hours and hours,” Steinberg said.

“Unless we get the whole community working across adjacent parcels, we can’t make a difference.”

One result is the association’s Firewise program, which pushes communities to create a local body for risk reduction, do a hazard evaluation and run education activities.

Firewise communities also must come up with a three-year plan – perhaps agreeing to attend to overgrown common areas or help elderly residents maintain their properties.

Today there are more than 2,800 active Firewise sites across 35 states, with 473 added in 2024.

Firefighters have recognized these efforts to make homes and communities more fire-resistant and safer for first responders, according to testimonials provided by NFPA.

Insurers have noticed, too, with some offering discounts to homeowners in Firewise communities.

The key is getting residents to take responsibility for mitigation work, experts say.

“When people see someone from the government, from the fire department, doing this work, they think, ‘They’ll do it, I don’t have to do anything,’” Steinberg said.

“We have to help people understand: Nobody can come on your property and do this for you…. You have to figure it out.”

‘BATHED IN SMOKE’

As climate change increases the frequency and severity of extreme weather, from floods to fires, some locations are seeking to broaden their efforts and expand cooperation on wildfire risk reduction across communities.

“If we expect everyone to participate in saving our community from the ravages of wildfire, … the plan has to come from the whole community,” said Chris Chambers, a forestry officer with the fire and rescue department in Ashland (NYSE:ASH), Oregon.

The picturesque city in the state’s southwestern mountains experienced a devastating wildfire in 2020 and is currently updating its wildfire protection plan.

“I have seen from a boots-on-the-ground perspective how valuable mitigation around homes, businesses and in the wildland contributes to potentially saving a property – or whole neighborhoods,” said Kelly Burns, a longtime firefighter and now the city’s emergency management coordinator.

In recent months, the process of updating the wildfire plan has included community surveys, knocking on residents’ doors and holding personal conversations.

The approach is unique, seeking to not only minimize fire damage but increase the possibilities that people can return to their homes and recover afterward, said Erica Fischer, an Oregon State University engineering professor.

She and colleagues are trying to design models of where the city should place its fire trucks during wildfires, with an eye to typical priorities such as homes or power infrastructure but also cultural or other assets whose damage could slow post-fire recovery.

That could include a community center or a feature like Ashland’s popular trail system, damage to which could make residents hesitant to move back, she said.

“It’s not just about your home on this isolated property but about every home in three to five miles of your home. So it becomes this community-wide, systematic issue,” Fischer said.

In Ashland, the community is responding.

“We’re bathed in smoke each summer from regional fires. By and large, Ashland understands that we’re at significant risk, and people are engaged and want to help avoid a disaster,” Chambers said.

“Taking advantage of that energy is a key component of success for an issue that depends on both collective and individual action.”

By Stine Jacobsen

COPENHAGEN (Reuters) – European wind shares fell on Tuesday after U.S. President Donald Trump axed support for new offshore wind power on his first day in office, adding to pain in an industry that had turned to the United States to help revive its fortunes.

The biggest decliner, Denmark’s Orsted (CSE:ORSTED), which plunged 17%, came under further strain from impairments on its U.S. ventures.

The global offshore wind industry, which initially boomed, has been struggling to deliver the carbon reductions pursued by many governments as escalating costs, supply chain issues and planning issues have slowed development.

U.S. prospects for wind had looked more favourable because of former president Joe Biden’s green investment policy.

But Trump, long known to favour fossil fuels, on Monday suspended new federal offshore wind leasing pending an environmental and economic review, saying wind turbines are ugly, expensive and harm wildlife.

Orsted on Tuesday reported 12.1 billion Danish crowns ($1.69 billion) in impairment charges related to the U.S. offshore market, triggering a selloff that dragged its share price to some 84% below a peak in 2021.

A delay and higher costs for Orsted’s Sunrise Wind project, which is expected to be the largest U.S. offshore wind farm once completed, were the main reason for the plunge, analysts said.

But the company also flagged impairments on seabed leases that could be directly linked to Trump, Sydbank analyst Jacob Pedersen told Reuters.

“Orsted now has some assets in the U.S. that are worthless. If there is nothing to be built because of Trump, Orsted can neither sell nor use the leases,” he said.

Other companies, including wind development companies, fell by smaller percentages.

Portugal’s EDP Renovaveis (ELI:EDPR) shares fell by around 1.6%, Germany’s RWE (LON:0HA0) shed around 0.5%, Norway’s Equinor dropped by 2.2% and wind turbine manufacturer Vestas fell by nearly 3% in afternoon trade.

Italy’s Prysmian (BIT:PRY), the world’s biggest cable maker and a major player in offshore wind transmission, on Tuesday said it would abandon a plan to build a plant in the United States to make cables for offshore wind parks.

Its shares, which closed at a record high on Monday, lost around 1% on Tuesday.

RWE SAYS NO IMPAIRMENT

Germany’s RWE, the world’s second-largest offshore wind project developer after Orsted, said there was no need for impairments on a 2.8 gigawatt U.S. offshore wind project it is jointly developing with Britain’s National Grid (LON:NG).

“The Executive memorandum on offshore wind did not come as a surprise,” the company said. “We currently see no need for impairments as the seabed lease is valid for at least until the 2060s, so it’s a long time to go to realise the project at a later stage.”

EDPR and Vestas declined to comment.

Vestas secured an order from Equinor last year to power New York’s Empire Wind 1 offshore wind project, while EDPR has a 50-50 offshore wind JV with Engie called Ocean Winds that is developing the Southcoast Wind project off the coast of Massachusetts, due to begin construction late this year.

Germany’s vice chancellor Robert Habeck told a conference in Berlin that Europe needs to continue expanding low-carbon energy during the Trump presidency, regardless of policies and his planned withdrawal from the Paris climate agreement.

The American Clean Power Association (ACP), a U.S. clean energy industry group, said it strongly opposed Trump’s executive order on wind leasing and permitting.

“States voting for President Trump are eight of the top 10 states in terms of reliance on wind power with many depending on wind for a significant share of their electricity use.  Restricting wind development in these regions is certain to increase consumer energy bills,” it said.

Although opposing wind, Trump issued a flurry of orders intended to boost energy production from other sources, driving up shares of U.S. nuclear power companies.

($1 = 0.9614 euros)

By Jonathan Stempel

(Reuters) -Harvard University will provide additional protections for Jewish students under a settlement announced on Tuesday that resolves two lawsuits accusing the Ivy League school of becoming a hotbed of rampant antisemitism.

Harvard said it will adopt the International Holocaust Remembrance Alliance definition of antisemitism, including specific examples of discrimination and harassment, when evaluating whether conduct violates its non-discrimination and anti-bullying policies.

The university will also address Frequently Asked Questions about its policies online, report annually for five years on its enforcement efforts, and provide training on combating antisemitism to staff who review discrimination complaints.

Harvard’s settlement resolves a lawsuit by Students Against Antisemitism, and a lawsuit by Jewish Americans for Fairness in Education and the Brandeis Center for Human Rights Under Law.

Both lawsuits were among many accusing major universities of encouraging antisemitism after war broke out between Israel and Hamas in October 2023, leading to several months of pro-Palestinian protests on American college campuses.

Marc Kasowitz, a lawyer for Students Against Antisemitism, in an interview said he had “great confidence” that Harvard was committed to protecting its Jewish students, including those targeted simply for supporting Israel.

“Statements about destroying the state of Israel, murdering Israelis, and that sort of thing are antisemitic statements,” he said. “That gives us confidence that these measures are going to be very, very protective of the interests and rights of Jewish students on the Harvard campus.”

HARVARD PLEDGES A ‘WELCOMING’ CAMPUS

Jewish students accused Harvard of selectively enforcing its anti-discrimination policies, including by tolerating their being maligned as “murderers” and subjected to a viral “die-in” where attendees accused Israel of war crimes.

They also accused Harvard of hiring professors who promoted anti-Jewish violence and spread antisemitic propaganda.

Last June, Harvard task forces on antisemitism and anti-Muslim bias each found a Cambridge, Massachusetts campus beset by discrimination and harassment, including toward people with pro-Palestinian as well as pro-Israel views.

Both lawsuits accused Harvard of violating Title VI of the Civil Rights Act of 1964, which bars federal funds recipients from allowing discrimination based on race, religion and national origin.

The FAQ includes a statement recognizing that many Jews consider Zionism part of their identity, and that discrimination or harassment targeting Jewish and Israeli people can also violate Harvard’s policy if directed toward Zionists.

“We are committed to ensuring our Jewish community is embraced, respected and can thrive at Harvard,” a university spokesperson said in a statement.

“We are resolute in our efforts to confront antisemitism and will continue to implement robust steps to maintain a welcoming, open, and safe campus environment where every student feels a sense of belonging,” the spokesperson added.

Both settlements include unspecified monetary terms. Harvard did not admit wrongdoing.

TRUMP’S IMPACT

Alexander Kestenbaum, a Harvard Divinity School student and plaintiff in the Students Against Antisemitism lawsuit, did not settle and will keep seeking compensatory damages. His new lawyers did not immediately respond to requests for comment.

The settlement came after a federal judge in Boston refused to dismiss both lawsuits.

Kasowitz said President Donald Trump’s statements about how his administration would protecting Jewish students’ rights was “certainly helpful” in reaching the settlement.

Students Against Antisemitism settled similar litigation against New York University last July, and Kasowitz said the group was pleased that campus life for Jewish students there has “dramatically improved.”

The group is still pursuing Title VI cases against Columbia University and the University of Pennsylvania. Those schools did not immediately respond to requests for comment. Harvard did not immediately respond to a request for additional comment.

DAVOS, Switzerland (Reuters) – German Chancellor Olaf Scholz said on Tuesday he does not support freedom of speech when it is used for extreme-right views, a day after a hand gesture by U.S. billionaire Elon Musk caused uproar during Donald Trump’s inauguration festivities.

“We have the freedom of speech in Europe and in Germany. Everyone can say what he wants, even if he is a billionaire. And what we do not accept is if this is supporting extreme-right positions,” Scholz said in Davos when asked about the incident.

Musk’s hand gesture during a celebration of President Trump’s inauguration drew online comparisons to a Nazi salute.

Musk dismissed the criticism as a “tired” attack.

“Shame on Oaf Schitz,” Musk posted on X, the platform he owns, on Tuesday with a video clip shared by another user that showed Scholz speaking at the annual meeting of the World Economic Forum in the Swiss resort.

“Schitz” has no meaning in German.

Musk has previously attacked Scholz on X, calling him an “incompetent fool” who should resign after a deadly attack at a German Christmas market.

He has also used the platform formerly known as Twitter to signal his support for the far-right Alternative for Germany (AfD) party ahead of elections scheduled for next month.

Musk’s repeated endorsement of the AfD, the party that has embraced the Trump administration most among German parties, has drawn ire in Berlin, but the German government has stopped short of unanimously leaving his platform.

The European Commission said this month that it was stepping up its investigation into whether X breached European Union rules on content moderation.

Musk’s hosting of AfD leader Alice Weidel for a discussion on X this month was watched by the European Commission to check for any spreading of misinformation.

By Julie Zhu and Elisa Martinuzzi

DAVOS, Switzerland (Reuters) – Chinese Vice Premier Ding Xuexiang met with global finance and business leaders including Blackstone (NYSE:BX) CEO Steve Schwarzman, Bridgewater Associates founder Ray Dalio and JPMorgan CEO Jamie Dimon during a private lunch in Davos on Tuesday.

The lunch, hosted by World Economic Forum (WEF) founder Klaus Schwab, was also attended by BlackRock (NYSE:BLK) CEO Larry Fink, Standard Chartered (OTC:SCBFF) CEO Bill Winters and Visa (NYSE:V) CEO Ryan Mclnerney.

Several Chinese government officials who are part of the country’s delegation in Switzerland were also present at the event. U.S. financial firms have been keen to maintain good relations with Beijing, even as Chinese growth has waned.

“All the indicators are positive, but the market is waiting to see how much conviction there is and how much follows through,” an executive who attended the meeting told Reuters.

“There was a determination to complete all the transformations that they (the Chinese) set out,” said the executive, adding the key goals for Beijing include stabilizing the property market and stimulating the domestic demand.

Chinese policymakers are intensifying efforts to stimulate a faltering economy in the face of concerns over potential U.S. tariff hikes following President Donald Trump’s inauguration.

Trump unexpectedly held off from imposing tariffs on China on his first day back in the White House.

Ding on Tuesday welcomed more investment by foreign companies in the country, adding that China was willing to solve problems encountered by domestic and foreign firms.

He is the second-highest-ranking Chinese official to rub shoulders with global business and political leaders at the Davos summit since President Xi Jinping attended in 2017.

(Reuters) – The U.S. Senate Finance Committee on Tuesday voted to send the nomination of billionaire hedge fund manager Scott Bessent as President Donald Trump’s Treasury secretary on to the full Senate for approval.

The committee voted 16-11 to send the nomination on to a final confirmation vote in the Senate. All Republicans voted in favor of the nomination, but Bessent also won approval votes from two Democrats, Mark Warner and Maggie Hassan.

If approved as expected, Bessent, 62, will be one of the new administration’s critical voices in economic policy, with vast influence over fiscal policy, financial regulations, international sanctions and investments from overseas. He would also be the point man for managing the nation’s tax collections and its $28 trillion Treasury debt market.