Netanyahu To Meet Trump in Washington | Horizons Middle East & Africa 2/11/2026

Horizons Middle East & Africa - February 7, 2026 - Summary

Key Concepts:

• Federal Reserve (Fed) Rate Cuts: Market expectations regarding potential interest rate reductions by the U.S. Federal Reserve.
• PGM (Platinum Group Metals): A group of metals (platinum, palladium, rhodium, ruthenium, iridium, and osmium) crucial for automotive catalytic converters and industrial applications.
• Geopolitical Risk: The impact of political tensions, particularly in the Middle East and involving Iran, on markets.
• Corporate Bond Issuance (Hyperscalers): The trend of large technology companies issuing bonds to fund data center expansion and other investments.
• Asian Market Performance: Analysis of stock market trends in Asia, particularly China, Taiwan, and South Korea.
• Demerger: The separation of Valterra Platinum from Anglo American, and its subsequent performance.
• Supply/Demand Deficit (PGMs): The imbalance between the supply and demand of Platinum Group Metals, driving price increases.

1. Market Overview & U.S. Economic Data

Asian stocks are experiencing gains following weaker-than-expected U.S. retail sales data, fueling bets on potential Federal Reserve rate cuts later in 2026. Traders are keenly awaiting the release of the U.S. jobs report later today, which was delayed due to a government shutdown. The expectation is for a 65,000 job increase and a steady unemployment rate of 4.1%. A significant deviation from these figures could significantly impact markets. CPI numbers are also due on Friday. The USD is slipping (down 0.2% this morning, 2.5% over the last month), while gold is holding steady above $5,000, approaching its all-time high, benefiting from the prospect of lower interest rates. Brent crude is near $70, up 0.6%, with geopolitical tensions remaining a key focus. A large U.S. inventory buildup was largely dismissed by the market.

2. Geopolitical Tensions & Iran

The upcoming meeting between Israeli Prime Minister Benjamin Netanyahu and U.S. President Trump is a major focus, alongside reports that the U.S. was considering seizing tankers carrying Iranian crude. These developments highlight significant tensions in the Middle East. Donald Trump has indicated Iran is keen on a deal.

3. Corporate Bond Issuance & Tech Sector

Alphabet recently issued $32 billion in bonds (in Sterling and Swiss Francs), alongside issuances from Oracle and Meta. This indicates the tech sector is trading at a slight premium due to the increased supply hitting the market from these "hyperscalers" (large tech companies) funding massive spending on data centers. These bond issuances were heavily oversubscribed, but the increased supply is putting pressure on the investment grade (I.G.) basket.

4. Asian Market Performance (Detailed)

• MXAP: Reached a record high, driven by expectations of Fed rate cuts.
• Taiwan (TAIEX): Up 8.1% following strong January sales from TSMC. Bank of America has raised Taiwan’s GDP forecast to 8%.
• South Korea (KOSPI): Supported by Samsung touting its latest HBM4 chips (High Bandwidth Memory), slated for production this month.
• China (CSI 300): Under pressure due to a miss in inflation expectations. Investors are rotating into safer assets, evidenced by record-high positions in Chinese bond futures. The 10-year yield has broken below 1.8%. While PPI improved, it’s largely attributed to commodity price increases. CPI came in at 0.2%, a significant disappointment, indicating limited price increases in China.

5. Bank of Singapore Chief Economist Interview (Mansoor)

• Jobs Report Importance: The payroll number is crucial. A contraction in jobs or unemployment rising above 4.5% would increase the likelihood of a near-term rate cut. However, Chairman Powell is currently inclined to maintain current interest rates.
• Inflation Outlook: Inflation numbers are likely to complicate matters for the Fed, with core inflation expected to remain above 2.5%.
• U.S. Economy Resilience: The U.S. economy has proven surprisingly resilient, avoiding a recession and achieving growth rates exceeding 4% in the last quarter.
• Labor Market: The labor market has been soft, and potential job cuts due to AI could further impact the Fed’s decision-making.
• China’s Trade Surplus: China’s $1 trillion trade surplus is impressive despite U.S. tariffs. However, domestic demand remains weak, necessitating further easing from the People’s Bank of China, but cautiously to avoid overheating the economy.
• Dollar Weakness: The dollar is in a clear long-term downtrend, reminiscent of the early 2000s, with geopolitical tensions and low interest rates driving investment towards other regions.
• Alternatives to the USD: No real alternative exists for large reserve managers, with Euros and Yen being potential shifts, but the dollar remains dominant.

6. AirAsia Expansion & Bahrain Hub

AirAsia is expanding its global footprint, launching new routes linking Kuala Lumpur to Bahrain and London Gatwick. Bahrain is strategically positioned as a hub for expansion into Africa and Europe. AirAsia is seeking freedom rights to operate in Bahrain and potentially establish an AirAsia Bahrain airline. The company plans to potentially position up to 100 aircraft in Bahrain, with a potential of 45 million passengers. They are also expanding their cargo business (Teleport) and exploring a maintenance hub in Bahrain. Tony Fernandes, CEO of Capital A, emphasized Bahrain’s proactive government and strategic location.

7. Valterra Platinum Demerger & PGM Market

Valterra Platinum is performing well following its demerger from Anglo American. The PGM (Platinum Group Metals) market is structurally in a supply-demand deficit, expected to persist for years. Increased demand from the energy transition (internal combustion engines) and limited supply due to underinvestment are driving prices higher. Geopolitical events have also contributed to supply disruptions. Valterra Platinum is focused on capital allocation and investing in its world-class assets.

8. Regional Economic Updates

• Egypt: Inflation slowed to 11.9% in January, the lowest level since September, but is still impacted by IMF-backed subsidy cuts.
• Zambia: Will begin talks with the IMF about an economic program after its August election.
• Nigeria: Plans to sell state-owned assets to investors this year to drive investment.
• Zimbabwe: Proposed constitutional changes to extend the president’s term until 2030.

Synthesis/Conclusion:

The global economic landscape is characterized by shifting expectations regarding interest rates, geopolitical risks, and evolving market dynamics. Asian markets are benefiting from the prospect of Fed easing, while the Middle East is seeing increased investment and expansion, particularly in aviation and infrastructure. The PGM market is experiencing a structural shift with rising prices driven by supply-demand imbalances. Overall, the outlook is cautiously optimistic, but remains sensitive to geopolitical developments and economic data releases.