At a glance:

The Trump administration is preparing to nominate Kevin Warsh as the next Fed chair, lifting the USD on hawkish assumptions.
Tokyo CPI cooled in January, easing near-term pressure on the BoJ to hike again; USD/JPY rose more on Warsh news than Japan data.
Apple forecast a sharp rebound in March-quarter revenue, led by iPhone demand and China.
New Zealand consumer confidence hit a four-year high in January.
Metals were mildly softer, while a Panama court ruling raised fresh risks for Chinese port ownership.

The Trump administration is reportedly preparing to nominate Kevin Warsh as the next Federal Reserve chair, with Donald Trump expected to announce his decision on Friday morning. Warsh is understood to be on a four-person shortlist and visited the White House on Thursday, though sources cautioned that the decision is not final until Trump makes a formal announcement. Other candidates under consideration include Kevin Hassett, Christopher Waller, and Rick Rieder of BlackRock.

The US dollar strengthened broadly on the report, with markets treating Warsh as a hawkish appointment. That assumption is being questioned in some quarters. While Warsh was clearly hawkish prior to aligning himself with Trump, it is less obvious that a Trump-appointed Fed chair would be encouraged to maintain that stance. The question for markets is why Trump would choose a genuinely hawkish central banker.

In Japan, Tokyo inflation data for January came in softer than expected. Headline CPI slowed to 1.5% y/y from 2.0%, while core inflation eased to 2.0% from 2.3%. Underlying measures also cooled, reducing the urgency for further Bank of Japan rate hikes following December’s move to a 30-year high. Labour market conditions remained firm, but USD/JPY gained far more on the Warsh news than on the CPI release.

Elsewhere, Apple forecast revenue growth of up to 16% for the March quarter, comfortably ahead of expectations, driven by strong iPhone demand and a rebound in China. In New Zealand, ANZ-Roy Morgan consumer confidence rose to its highest level since August 2021.

Metals were mildly pressured, with spot gold and silver lower and CME copper futures softer. Trading on the London Metal Exchange was briefly delayed by technical issues. Finally, a Panama court voided port contracts held by CK Hutchison, raising fresh concerns over Chinese infrastructure ownership.

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