- Newt Gingrich achieved an upset win over Romney in South Carolina, winning >40% of the vote and beating the former Massachusetts Governor by more than 13 points.
- The NYT claims Obama will emphasize measures designed to help housing and stem foreclosures, will reiterate his desire to raise upper-income tax rates, offer tax incentives for creating American jobs, new tax breaks for manufacturing, support for clean-energy incentives, and new education initiatives. Obama will also ratchet up the rhetoric against China, reiterating his call for a stronger yuan. The President will address the nation tomorrow night
- The US, UK, and France sent a series of warships through the Strait of Hormuz w/o incident (Iran had threatened to shut the Strait if the West sent more military assets through it). The fleet was led by a US aircraft carrier. Bloomberg/London Telegraph
- EU Consumer Confidence improved to -21 in Jan vs -21.4 exp and -21.1 prev
- French Business Confidence declined to 91 in Jan vs 95 exp and 94 prev.
- The widely expected PBoC RRR cut ahead of Chinese New Year appears to be postponed.
GS advised shorting 10y Treasuries this morning, targeting 126 with a 132 stop. TYH2 closed Friday at 130-08+. They note that the vast majority of market participants expect the FOMC meeting on Wed to ease financial conditions, suggesting that it has all been priced in.