This week, the global financial markets are entering a critical window, with three major events happening almost simultaneously.

China just released its December trade data, which exceeded expectations. The trade surplus reached $104.84 billion, directly surpassing the market consensus of $100 billion. Exports surged by a hefty 10.7%, the second-highest level since April 2023. Looking at the categories, exports to the US skyrocketed by 15.6%, and to ASEAN even more so, with an 18.9% growth rate. The automotive supply chain and machinery equipment sectors performed particularly well. On the import side, the previous downturn was reversed, rebounding from negative growth to 1.0% positive growth. The import of integrated circuits and improved demand in the construction industry contributed to this resilience, confirming the robustness of foreign trade.

On the US side, December CPI data has not been released yet, but it has already become the market’s most watched focus. Although inflation is trending downward from its peak, it still remains above the 2% target. Coupled with uncertainties around tariffs, the direction of core inflation has become the biggest suspense. If the data exceeds expectations, the Federal Reserve’s "hawkish" signals will strengthen; conversely, if it meets or falls below expectations, the idea of rate cuts will revive, and the US dollar, US stocks, and global capital flows will be re-priced accordingly.

The most challenging part is that Federal Reserve officials will be speaking intensively in the coming days. Every comment on inflation feedback, economic resilience, and interest rate adjustments could become a market indicator. The recent meeting minutes clearly stated that rate cuts depend on inflation cooling further. Whether this statement hints at a slowdown in QT or a window for rate cuts has everyone listening carefully.

These three events are interconnected, and all asset classes will need to reassess their positions.