The IRS is set to send out $2.4 billion in stimulus payments to eligible US taxpayers by late January.

These payments, issued via direct deposit or paper checks, are targeted at individuals who missed claiming the Recovery Rebate Credit on their 2021 tax returns.

Why are these stimulus checks being issued?

The Internal Revenue Service (IRS) announced this initiative after identifying taxpayers who qualified for the Recovery Rebate Credit but did not claim it.

The Recovery Rebate Credit is a refundable credit designed for individuals who did not receive one or more Economic Impact Payments (commonly known as stimulus payments).

“Our internal review showed that nearly one million eligible taxpayers overlooked this complex credit,” stated IRS Commissioner Danny Werfel.

“To simplify the process and ensure these funds reach those who qualify, we are making these payments automatic. Taxpayers will not need to file an amended return to receive the money.”

How to receive the stimulus payment?

The good news for eligible taxpayers is that no additional action is required to receive these payments.

The IRS confirmed that the checks began going out in December and are expected to arrive by the end of January.

Payments will be issued either as direct deposits or mailed paper checks, depending on the taxpayer’s previous refund method.

IRS stimulus checks: determining eligibility

To determine if you’re eligible for the stimulus payment, the IRS will send a notification letter to those who qualify.

Additionally, taxpayers can review their 2021 tax returns to check if they left the Recovery Rebate Credit section blank or listed it as $0.

This could indicate eligibility for the payment.

IRS stimulus checks payment amounts

The amount of the stimulus payment will vary by individual, with the maximum amount being $1,400.

The IRS estimates that the total disbursed payments will reach $2.4 billion nationwide.

What if you didn’t file a 2021 tax return?

If you didn’t file a 2021 tax return, you may still qualify for a stimulus payment.

However, you must file your 2021 return and claim the Recovery Rebate Credit by April 15, 2025, to be eligible.

“Even those with minimal or no income must file a tax return to claim this credit,” the IRS emphasized.

If you’re eligible for this round of stimulus payments, expect to receive your funds automatically.

For those who missed filing a 2021 return, there’s still time to claim the credit and secure your payment.

Keep an eye out for notification letters from the IRS, and review your 2021 tax return to confirm your eligibility.

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Vietnam has surpassed Japan to become China’s third-largest export destination for the first time, marking a significant shift in global trade patterns.

This transformation is largely driven by US tariffs, which are compelling companies to find new suppliers outside of China while still relying on Chinese manufacturers for essential components.

Record exports to Vietnam fuel supply chain diversification

Data released by China’s customs administration on Monday reveals that China’s exports to Vietnam surged almost 18% in 2024, reaching a record $162 billion.

This surpasses the $152 billion in shipments to Japan, which had previously held the third-largest spot.

The growth in exports to Vietnam has largely been fueled by a surge in shipments of parts that are then assembled and exported to the US and other countries.

Eight of the ten fastest-growing exports were electronics components, including screen modules and computer memory, according to Chinese data through November last year.

Vietnam benefits from diversified supply chains

While the rerouting of trade may increase costs for businesses and consumers, it has proved to be beneficial for Vietnam.

The Southeast Asian nation has seen a surge in investment as businesses seek to diversify their supply chains away from China.

Leading electronics manufacturers such as Samsung Electronics Co., Luxshare Precision Industry Co., and Hon Hai Precision Industry Co. have invested billions in Vietnam in recent years to assemble products like AirPods and MacBooks.

“We’ve seen more and more companies moving from China to Vietnam to avoid the future tariff risk,” Bloomberg quoted Nguyen Mai, chairman of Vietnam’s Association of Foreign Invested Enterprises, adding that this has significantly increased exports to the country.

AI boom and export restrictions drive investment

The boom in artificial intelligence (AI) and US export restrictions on AI chips have similarly boosted investment in Vietnam while maintaining China’s relevance in the supply chain.

Hon Hai began manufacturing Nvidia’s AI graphics cards at its Vietnamese subsidiary last year, sourcing key components such as integrated circuits and printed circuit boards from China, according to a Bloomberg report which quoted data from NBD, a private customs data provider.

The majority of the finished products were then shipped to American customers, driving up Vietnam’s trade surplus with the US to record levels in the year through November.

Potential challenges for Vietnam under a Trump administration

This surge in Vietnam’s trade surplus with the US could potentially put the country in the crosshairs of President-elect Donald Trump, who has expressed a need to balance trade with Vietnam and has previously referred to it as a trade “abuser.”

The US has already begun pushing back against this trend.

The Biden administration imposed tariffs on solar panels manufactured in Vietnam and three other Southeast Asian nations late last year.

Most of the panels were produced by Chinese companies that had invested in those countries, partially to circumvent US tariffs.

“From what Trump has said before and with his ‘America First’ policy, we may see higher tariffs and other trade challenges such as technical barriers this year,” Mai said.

But we also believe that the Trump administration, same as the Biden administration, would also recognize the importance of Vietnam in their foreign policy and how the two markets can benefit from each other.

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Asian markets presented a mixed picture on Tuesday, as bargain buying following recent losses was countered by ongoing concerns about the global economic outlook and the potential impact of a second Donald Trump presidency.

The release of US inflation data this week, as well as the start of the corporate earnings season, is adding to the uncertainty in the markets.

Trump’s tariff plans and a weaker dollar

A report suggesting that President-elect Donald Trump’s economic team is considering a more gradual approach to increasing tariffs on imports provided some support to traders and slowed the dollar’s recent surge.

However, despite this development, worries persist that his tax cuts, deregulation, and immigration policies could reignite inflation.

The potential impact of new US export restrictions targeting AI chips to China also seemed to have little immediate impact on the markets.

Traders scale back Fed rate cut expectations

Traders have significantly adjusted their expectations regarding the Federal Reserve’s interest rate policy, reducing the projected number of rate cuts through 2025 to just one, down from four predicted last year.

There’s even discussion that the Fed’s next move could be a rate hike, driven by persistent inflation and the uncertainty surrounding Trump’s policies.

The better-than-expected December jobs report released on Friday dealt another blow to the hopes for a rate cut at the Fed’s next meeting, sending equity markets lower.

Wall Street recovery and mixed Asian performance

Wall Street managed a slight recovery on Monday, with the Dow and S&P ending in positive territory, although tech stocks, including Nvidia, dragged the Nasdaq down again.

Asian markets experienced a volatile trading session on Tuesday morning.

Hong Kong, Shanghai, Sydney, Wellington, Taipei, and Jakarta saw gains, while Singapore, Manila, and Seoul all experienced losses.

Tokyo was the biggest loser as traders returned from a long weekend, catching up with Monday’s sell-off.

Dollar weakens, eyes on inflation and earnings

The dollar retreated against other currencies after Bloomberg reported that members of Trump’s team were considering a gradual increase in tariffs.

This contrasts with Trump’s previous statements that he would impose huge levies on China, Canada, and Mexico as soon as he took office.

Despite the weaker dollar, the pound remained at levels not seen since the end of 2023, and the euro was close to its weakest level since late 2022, with continued concerns that it could return to parity with the dollar.

All eyes are now on the release of US inflation data this week and the start of corporate earnings season.

Earnings and outlook to set tone for 2025

“This earnings season will set the tone for financial stocks in 2025, but the stakes are high,” Charu Chanana, chief investment strategist at Saxo Markets, told Agence France-Presse.

Even with solid fourth-quarter results, the macro backdrop — characterised by lingering inflation concerns, steeper yields, and recalibrated Fed expectations — may weigh on sentiment.

She added that “uncertainty around Fed policy and a potential shift in fiscal priorities under Trump’s new administration will keep markets on edge.”

Chanana noted:

With valuations already elevated after a strong 2024, further stock gains will require more than just decent earnings. Robust outlooks, ongoing loan demand, and resilient consumer credit will be critical to sustaining investor confidence.

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The US dollar experienced a broad decline against almost every major currency on Tuesday, following a Bloomberg News report that Donald Trump’s incoming economic team is considering a more gradual approach to imposing tariffs.

This shift in potential policy is a notable development in the foreign exchange market, triggering a strong reaction among investors.

The Bloomberg Dollar Spot Index fell as much as 0.4% in early Asian trading, after the report indicated that Trump’s advisors are discussing a slow and steady increase in tariffs, rather than an immediate, large-scale implementation.

This proposed approach could potentially alleviate some inflationary pressures from tariffs, which may, in turn, give the Federal Reserve more flexibility in reducing interest rates.

This marks the most substantial drop in the dollar gauge since January 6, when it fell after a Washington Post story, also disputed by Trump, suggested that he was planning to scale back his tariff plans.

“Dollar weakness can be sustained unless President Trump denies the reporting like he did in reaction to the report by the Washington Post,” Carol Kong, a strategist at Commonwealth Bank of Australia, highlighting the importance of Trump’s response to market confidence, told Bloomberg.

Risk-sensitive currencies rally on relief

Risk-sensitive currencies such as the Australian and New Zealand dollars jumped against the greenback, signaling a sense of relief that a major tariff shock might be averted.

The Chinese offshore yuan, a primary target for traders betting on US tariffs, also edged higher.

Market outlook: a tug-of-war between hope and reality

However, the dollar’s dominance is not expected to disappear immediately, according to Bloomberg Strategist Mary Nicola, which suggests that there are still potential headwinds for Asian currencies in the coming year.

The dollar’s drop underscores the significant role tariffs play in shaping sentiment within the $7.5 trillion-a-day foreign-exchange market.

This move, though, may prove to be temporary, as most Wall Street banks expect the greenback to strengthen.

The blowout employment numbers released last week have further intensified questions about the pace of potential rate cuts.

Goldman Sachs Group Inc. has predicted that the dollar could climb 5% or more this year.

Bloomberg data further revealed that speculative traders, including hedge funds and asset managers, are now more bullish on the greenback than they have been since 2019.

“You can’t chase this thing, as a denial will be coming soon,” Win Thin, global head of currency strategy at Brown Brothers Harriman & Co. in New York, referring to the recent headlines, told Bloomberg.

Look through the noise and rest assured the dollar rally will continue on the US economic outperformance alone.

Furthermore, even those who believe the dollar will lose momentum think that such a decline is likely to occur in the second half of the year, as per Mark Haefele, chief investment officer at UBS Global Wealth Management.

Emerging market currencies react positively, but caution remains

Emerging market currencies, led by the Philippine peso, the Thai baht, and the South African rand, moved higher on Tuesday, partially recovering losses from the beginning of the year when investors shunned riskier assets in anticipation of the new Trump administration.

“The tariff headlines are positive for Asia FX as it suggests a less draconian approach, but at the moment it’s still headlines,” Eddie Cheung, a senior emerging markets strategist at Credit Agricole CIB in Hong Kong, told Bloomberg.

While the knee jerk reaction is positive, I think markets will still want a bit more confirmation.

The decline in the Bloomberg Dollar Spot Index on Tuesday came after five consecutive days of gains, with the gauge currently about 0.6% higher this year, following an 8% rise in 2024.

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The recent price behaviour of gold has underlined its importance as a safe-haven asset even at a time of rising currencies and a shifting macroeconomic scenario. 

Gold prices on COMEX had touched a near one-month high on Friday on uncertainty over the monetary policy of the Federal Reserve and over US President-elect Donald Trump’s tariff narrative. 

“As the new week gets underway, the precious metal finds itself beginning on the back foot as traders adjust their positions and evaluate the most recent economic data that may be absolutely crucial in determining the direction of Federal Reserve monetary policy,” according to a Kitco.com report. 

Nevertheless, gold’s rally over the last couple of weeks has been impressive. 

As markets get closer to the inauguration day of Donald Trump on January 20, the anticipation of how gold will behave in the coming months is likely to keep traders and investors interested. 

Focus on Trump’s policies

According to experts, if Trump’s policies are seen as favourable for the yellow metal, then gold will be a prominent asset for investors in the next few months. 

On Monday, Bloomberg reported that the Trump administration was preparing a plan for gradual imposition of trade tariffs in the upcoming months. 

The plan is likely to include tariffs increases of 2% to 5% every month, and will give the US leverage in trade negotiations, according to the report. 

The small increases in tariffs will also prevent a sudden spike in domestic prices and flaring up inflation. 

Gold benefited from the initial uncertainties surrounding Trump’s proposed tariffs.

The uncertainties had increased safe-haven demand for the precious metal.

However, the latest Bloomberg report claimed that the Trump administration may factor into higher inflation in the US. 

If higher inflation is indeed factored into while raising the tariffs, it would mean that the US Fed could have more room to cut rates. 

Lower rates bode well for gold as it is a non-yielding asset unlike US bonds. 

“Should Trump genuinely urge the Federal Reserve to lower rates or take a more accommodating posture, gold prices would rise,” Kitco.com said in the report.

Therefore, any dovish signals from the Fed or the US government may inspire (a) fresh optimistic attitude in the gold market, therefore maybe driving prices higher. Still, this is hardly clear, and much will rely on how the political environment and economic statistics develop in the next months.

Additionally, Trump had also been vocal about his criticism of higher interest rates.

Therefore, his return to power provides optimism over a more dovish monetary policy by the Fed. 

Particularly in order to increase economic development, there is conjecture that Trump’s government would advocate reduced interest rates.

Robust economic data

On Friday, the US non-farm payroll data showed a sharp increase in job creation in the country. 

The data showed that 256,000 jobs were created, which was much more than the projected 164,000 figure.

The unemployment rate also fell to 4.1% from 4.2% earlier. 

The robust labour market in the US signals that the Fed may be prompted to slow down its rate-cutting cycle. 

“The upbeat US Nonfarm Payrolls report released on Friday reinforced bets for a slower pace of interest rate cuts this year. This acts as a tailwind for the US bond yields and the USD, which, in turn, keeps a lid on any meaningful appreciating move for the non-yielding Gold price,” Haresh Menghani, editor at FXstreet, said in a report. 

Focus this week will be on the release of the US consumer price index inflation on Wednesday.

The data is expected to provide further cues about the outlook of the monetary easing by the Fed. 

Kitco.com said:

Higher inflation would also imply that the Fed could be compelled to remain hawkish, thereby maintaining rates higher for longer, which would be negative for gold.

Uncertain US political situation

However, the anticipation of more trade tariffs and as Trump’s inauguration day beacons, gold prices may remain supported for the time-being, according to analysts at Commerzbank AG. 

Additionally, the relation between the dollar and gold is inconclusive in the short term.

But, over a longer period, gold becomes more expensive when the dollar remains high. 

“However, they show strength at the same time when both are being sought as safe haven investments in the face of an uncertain global political situation. This currently appears to be the case, even if some of the global uncertainty stems from the US and the President-elect himself,” Barbara Lambrecht, commodity analyst at Commerzbank AG, said. 

At the time of writing, the February gold contract on COMEX was at $2,683 per ounce, up 0.2% from the previous close.

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