IC Markets Global – Asia Fundamental Forecast | 14 January 2026

What happened in the U.S. session?

The U.S. session featured the December CPI release with core inflation at 2.6% YoY (beating softer expectations), reinforcing Fed easing hopes and pressuring yields and the dollar lower while lifting risk sentiment in equities. Trump’s 25% Iran tariff announcement drove crude oil higher amid geopolitical risks, partially overshadowing a DOJ probe into Fed Chair Powell that initially weighed on sentiment but faded. Most impacted were Treasuries (yields down), USD (weaker), oil (up sharply), and mixed U.S. indices, with financials hit by earnings.

What does it mean for the Asia Session?

Asian markets open to U.S. CPI and retail sales data that could shift USD strength and Fed policy views, compounded by Iran’s unrest pressuring oil supplies and Japan’s election speculation weakening the yen, prompting caution on energy commodities, JPY crosses, and equity indices like Nikkei amid heightened volatility.

The Dollar Index (DXY)

Key news events today

Core PPI m/m (1:30 pm GMT)

Core Retail Sales m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

Retail Sales m/m (1:30 pm GMT)

Core PPI m/m (Oct Data)

PPI m/m (Oct Data)

What can we expect from DXY today?

The US dollar navigated choppy waters, stabilizing after Tuesday’s rebound against the yen but under pressure from President Trump’s ongoing critiques of Fed Chair Jerome Powell, which stoke inflation worries and question Fed independence, leading to GBP strength above 1.3450 and broad USD softness; investors hedged positions ahead of recent CPI data (core YoY at ~2.7%) and eyed persistent US economic resilience versus global peers.

Central Bank Notes:

• The Federal Open Market Committee (FOMC) is widely expected to lower the federal funds rate target range by 25 basis points to 3.50%–3.75% at its December 9–10, 2025, meeting, marking the third consecutive cut after the October reduction to 3.75%–4.00%
• The Committee continues to pursue maximum employment and 2% inflation goals, with the labor market showing further softening as the unemployment rate rose to 4.4% in September 2025 amid modest job gains.
• Officials note persistent downside risks to growth alongside resilient activity, with inflation easing to 3.0% year-over-year CPI in September but remaining elevated due to tariff effects; core PCE stands at around 2.8% as of October.
• Economic activity grew at a 3.8% annualized pace in Q2 2025 per revised estimates, though Q3 and Q4 face headwinds from trade tensions, fiscal restraint, and data disruptions like the government shutdown.
• September’s Summary of Economic Projections forecasts 2025 unemployment at a median of 4.5%, with PCE inflation near 3.0% and core PCE at 3.1%, signaling a gradual disinflation path. Updates expected on December 10 may adjust for higher unemployment and lower growth.
• The Committee maintained its data-dependent approach, noting a softening labor market and inflation above the 2% target, while deciding to lower the federal funds rate target range by 25 basis points to 3.50%-3.75%. Dissent persisted, with multiple members opposing the cut or advocating for a hold, reflecting divisions similar to recent meetings.​
• The FOMC confirmed the conclusion of its quantitative tightening program effective December 1, 2025, with Treasury rolloff caps at $5 billion per month and agency MBS caps at $35 billion per month to ensure ample reserves and market stability.
• The next meeting is scheduled for 27 to 28 January 2026.

Next 24 Hours Bias

Medium Bearish 

Gold (XAU)

Key news events today

Core PPI m/m (1:30 pm GMT)

Core Retail Sales m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

Retail Sales m/m (1:30 pm GMT)

Core PPI m/m (Oct Data)

PPI m/m (Oct Data)

What can we expect from Gold today?

Gold (XAUUSD) traded mixed on Wednesday, fluctuating around the level as traders weighed fresh U.S. data against shifting interest‑rate expectations. A move in Treasury yields and the dollar dominated price action, with stronger‑than‑expected economic numbers briefly pressuring bullion before dip‑buyers emerged on ongoing geopolitical and inflation concerns.

Next 24 Hours Bias
Strong Bullish

The Australian Dollar (AUD)

Key news events today

No major news event

What can we expect from AUD today?

The AUD kicked off 2026 resiliently near 14-15 month highs around 0.67-0.675, driven by inflation persistence above RBA’s 2-3% target and policy hints from Governor Bullock and Deputy Hauser. Despite cautious economic indicators like narrowing trade surpluses and falling job ads, bullish technicals like RSI above 50 and ascending channels suggest upside potential toward 0.69 in 12 months. Traders remain focused on US CPI and Fed dynamics for near-term direction.

​
Central Bank Notes:

• The Reserve Bank of Australia held its cash rate steady at 3.60% at the November 2025 policy meeting, adopting a cautious tone amid a surprise uptick in inflation data for the September quarter. This marks the fourth consecutive pause since the 25 basis point cut in August. The Board attributed some of the inflation rise to temporary factors like higher petrol prices and council rates, but noted signs of more persistent pressures from consumer demand.​
• Policymakers emphasized vigilance on inflation, with trimmed mean inflation expected to remain elevated in the near term before nearing the 2–3% target midpoint by mid-2027. Recent data showed underlying inflation staying above target until at least the second half of 2026, prompting upward revisions to forecasts. Capacity pressures are seen as slightly more pronounced than previously assessed, delaying any easing.
• Headline CPI for the September quarter exceeded expectations, driven partly by temporary items, while underlying measures signal ongoing stickiness. The shift to monthly CPI reporting, with the first full edition in November 2025, will enhance real-time inflation monitoring. Housing and services remain resilient contributors to price pressures.
• Domestic demand shows firmness in services alongside below-trend growth elsewhere, with capacity pressures not expected to ease significantly. The labor market is gradually softening, with unemployment projected to stabilize around 4.4%, though wage growth and productivity dynamics keep unit labor costs a concern. Household spending faces headwinds from high borrowing costs.​
• Global risks include geopolitical tensions and commodity volatility, set against modestly revised-up world growth outlooks. The Board describes its policy as mildly restrictive and data-dependent, balancing inflation control with employment goals. No rate hike was considered despite the inflation surprise.
• Monetary policy remains mildly restrictive to address lingering price stability risks amid household and global vulnerabilities. Communications reaffirm the dual mandate of 2–3% inflation and full employment, with readiness to adjust based on incoming data.​
• Market expectations point to the cash rate holding through early 2026, with a possible modest cut to 3.3% mid-year if inflation eases as forecast. The new monthly CPI data will be key for timely insights.
• Monetary policy remains mildly restrictive, balancing progress on price stability against vulnerabilities in household demand and global outlook. Board communications reaffirm a dual mandate: price stability and full employment, while underscoring readiness to respond should risks materialize sharply.
• Analysts generally expect the cash rate to remain at current levels through early 2026, with only modest cuts possible later in the year if inflation moderates. The new monthly CPI release (first full edition Nov 2025) will be watched closely for timely signals on price trends.
• The next meeting is on 2 to 3 February 2026.

Next 24 Hours Bias

Medium Bullish

The Kiwi Dollar (NZD)

Key news events today

No major news event

What can we expect from NZD today?

The New Zealand Dollar (NZD) showed modest gains against the US Dollar, trading around 0.5770-0.5777, up approximately 0.10% from the prior session amid a weaker greenback driven by concerns over Federal Reserve independence following comments from Fed Chair Jerome Powell on legal threats from the Trump administration.

Central Bank Notes:

• The Monetary Policy Committee (MPC) left the Official Cash Rate (OCR) unchanged at 2.25% at its 26 November 2025 meeting, following the widely anticipated 25-basis-point reduction from 2.50%, and signaled that policy is now firmly in stimulatory territory while keeping the option of further easing on the table if needed.
• The decision was again reached by consensus, with members judging that the cumulative 325 basis points of easing over the past year warranted a period of assessment, even as several emphasized a willingness to cut further should incoming data point to a more protracted downturn or renewed disinflationary pressures.
• Headline consumer price inflation is projected to hover near 3% in late 2025 before gradually easing toward the 2% midpoint of the 1–3% target band through 2026, supported by contained inflation expectations around 2.3% over the two-year horizon and an expected pickup in spare capacity.
• The MPC noted that domestic demand remains subdued but shows tentative signs of stabilisation, with softer household spending and construction only partially offset by improving services activity; nevertheless, policymakers still expect services inflation to ease as wage growth moderates and the labour market loosens further over the coming year.
• Financial conditions continue to ease as wholesale and retail borrowing rates reprice to the lower OCR, contributing to gradually rising mortgage approvals and improving housing-related sentiment, although broader business credit growth remains patchy and sensitive to uncertainty about the durability of the recovery.
• Recent data confirm that GDP momentum is weak but not deteriorating as sharply as earlier in 2025, with high-frequency indicators pointing to a shallow recovery from a low base and ongoing headwinds from elevated living costs and fragile confidence weighing on discretionary consumption and investment.
• The MPC reiterated that external risks remain skewed to the downside, particularly from softer Chinese demand and uncertainty around United States trade policy, but noted that a lower New Zealand dollar continues to provide some offset via improved export competitiveness and support for tradables inflation.
• Looking ahead to early 2026, the Committee maintained a mild easing bias, indicating that a further cut toward 2.00–2.10% cannot be ruled out if activity fails to gain traction or if inflation undershoots projections, but current forecasts envisage the OCR remaining near 2.25% for an extended period, provided inflation converges toward target and the recovery proceeds broadly as expected.
• The next meeting is on 18 February 2026.

Next 24 Hours Bias

Medium Bearish

The Japanese Yen (JPY)

Key news events today

No major news event

What can we expect from JPY today?

The Japanese Yen (USDJPY) weakened significantly against the US dollar, reaching levels around 159 USD/JPY amid speculation of a snap election by Prime Minister Sanae Takaichi, which could lead to expansionary fiscal policies further pressuring the currency.

Central Bank Notes:

• The Policy Board of the Bank of Japan will meet on 18–19 December with markets almost fully pricing a 25-basis-point hike, which would raise the short-term policy rate from 0.50% to around 0.75%, as the bank moves further away from its ultra-loose stance while stressing that any tightening will remain gradual and data-dependent.
• The BOJ is expected to continue guiding the uncollateralized overnight call rate in a narrow band around the new policy rate, near 0.75%, while signaling that the pace and timing of any additional hikes will depend on how past increases affect bank lending, corporate financing conditions, and overall economic activity.
• The quarterly path of JGB purchases remains on a pre-announced, gradual taper: outright purchases are being reduced by about ¥400 billion per quarter through March 2026, then by roughly ¥200 billion per quarter from April to June 2026, with the bank still aiming for JGB purchases to settle near ¥2 trillion in Q1 2027 and retaining flexibility to adjust the pace if market functioning or yield volatility deteriorate.
• Japan’s economy has softened in the near term, with Q3 2025 GDP contracting at an annualized rate of approximately 2.3%, as weaker residential investment and external demand weighed on activity. Meanwhile, business sentiment in manufacturing has recently improved to a roughly four-year high.
• Core consumer inflation (excluding fresh food) accelerated to around 3.0% year-on-year in October, up from 2.9% in September and remaining above the BOJ’s 2% target, while the “core-core” measure excluding both fresh food and energy rose to about 3.1%, underscoring persistent underlying price pressures.
• In the very near term, some input-cost pressures are easing as earlier import price surges fade, but services inflation linked to labor shortages, along with steady wage gains, continues to support broader price momentum; firms’ and households’ medium-term inflation expectations remain anchored slightly above 2%, keeping short-term inflation risks tilted to the upside.
• For the coming quarters, the BOJ assesses that real growth will likely run below potential as the economy digests tighter financial conditions and past yen depreciation. However, accommodative real rates, positive real wage growth, and improving corporate sentiment are expected to help sustain a modest recovery in private consumption and business investment.
• Over the medium term, as overseas demand stabilizes and domestic labor markets remain tight, the BOJ expects wage settlements and inflation expectations to keep core inflation on a gradual upward trajectory around or slightly above 2%, providing room for further cautious rate normalization as long as financial conditions remain supportive and the recovery is not derailed.
• The next meeting is scheduled for 22 to 23 January 2026.

Next 24 Hours Bias

Strong Bearish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

Oil markets show continued downward pressure amid forecasts of oversupply, with Brent and WTI prices trending lower toward mid-$50s averages for the year due to robust production from the US, Russia, and others outpacing demand. Recent US sanctions on Russian oil exports to India and China, alongside actions against Venezuelan crude, have introduced some volatility but failed to reverse the glut, as workarounds limit impacts.

Next 24 Hours Bias
Weak Bullish

The post IC Markets Global – Asia Fundamental Forecast | 14 January 2026 first appeared on IC Markets | Official Blog.

IC Markets Global – Europe Fundamental Forecast | 14 January 2026

What happened in the Asia session?
China’s blockbuster trade surplus and export surge boosted regional equities and the yuan (USD/CNY ~6.98), but the yen weakened significantly on election speculation (USD/JPY ~159), driving intervention fears, while commodities like oil and precious metals rallied on U.S.-Iran tensions and soft CPI supporting rate-cut bets; Nikkei led equity gains amid mixed broader markets.

What does it mean for the Europe & US sessions?
Traders should monitor key bank earnings from Bank of America, Wells Fargo, and Citigroup, releasing before the US session opens, alongside anticipation for December producer price index (PPI) inflation data, which could influence Federal Reserve rate cut expectations. Oil prices are pausing gains amid resuming Venezuelan shipments, but with looming Iran-related tensions due to President Trump’s 25% tariff threat on nations trading with Iran.

The Dollar Index (DXY)

Key news events today

Core PPI m/m (1:30 pm GMT)

Core Retail Sales m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

Retail Sales m/m (1:30 pm GMT)

Core PPI m/m (Oct Data)

PPI m/m (Oct Data)

What can we expect from DXY today?

The US dollar showed mixed performance, stabilizing around the DXY level of 99.17-99.20 amid reactions to recent US CPI data and ongoing concerns over Federal Reserve independence. Reports of a Trump administration probe into Fed Chair Jerome Powell fueled initial weakness, boosting safe-haven currencies like the Swiss franc and pressuring the dollar against pairs like EURUSD and GBPUSD.

Central Bank Notes:

• The Federal Open Market Committee (FOMC) is widely expected to lower the federal funds rate target range by 25 basis points to 3.50%–3.75% at its December 9–10, 2025, meeting, marking the third consecutive cut after the October reduction to 3.75%–4.00%
• The Committee continues to pursue maximum employment and 2% inflation goals, with the labour market showing further softening as the unemployment rate rose to 4.4% in September 2025 amid modest job gains.
• Officials note persistent downside risks to growth alongside resilient activity, with inflation easing to 3.0% year-over-year CPI in September but remaining elevated due to tariff effects; core PCE stands at around 2.8% as of October.
• Economic activity grew at a 3.8% annualised pace in Q2 2025, according to revised estimates. However, Q3 and Q4 are expected to face headwinds from trade tensions, fiscal restraint, and data disruptions, such as the government shutdown.
• September’s Summary of Economic Projections forecasts 2025 unemployment at a median of 4.5%, with PCE inflation near 3.0% and core PCE at 3.1%, signalling a gradual disinflation path. Updates expected on December 10 may adjust for higher unemployment and lower growth.
• The Committee maintained its data-dependent approach, noting a softening labour market and inflation above the 2% target, while deciding to lower the federal funds rate target range by 25 basis points to 3.50%-3.75%. Dissent persisted, with multiple members opposing the cut or advocating for a hold, reflecting divisions similar to recent meetings.​
• The FOMC confirmed the conclusion of its quantitative tightening program effective December 1, 2025, with Treasury rolloff caps at $5 billion per month and agency MBS caps at $35 billion per month to ensure ample reserves and market stability.
• The next meeting is scheduled for  27 to 28 January 2026.

Next 24 Hours Bias
Medium Bullish

Gold (XAU)

Key news events today

Core PPI m/m (1:30 pm GMT)

Core Retail Sales m/m (1:30 pm GMT)

PPI m/m (1:30 pm GMT)

Retail Sales m/m (1:30 pm GMT)

Core PPI m/m (Oct Data)

PPI m/m (Oct Data)

What can we expect from Gold today?

Gold prices remain near record highs, trading around $4,595-$4,626 per ounce amid ongoing geopolitical tensions and expectations of Federal Reserve rate cuts. Spot gold hit a peak of $4,634.33 yesterday before pulling back slightly, supported by factors like uncertainties over Fed independence and strong safe-haven demand.

Next 24 Hours Bias   
Strong Bullish

The Euro (EUR)

Key news events today

No major news event

What can we expect from EUR today?

The Euro (EUR) traded lower against the US Dollar, with the EUR/USD pair slipping to around 1.1642, down 0.21% from the prior session amid a rebounding Greenback driven by mixed US inflation data and jobs figures. Investor morale in the euro zone showed unexpected resilience at the start of 2026, as indicated by the Sentix index rising to its highest level in recent months.

Central Bank Notes:

• The Governing Council of the ECB kept the three key interest rates unchanged at its 4–5 January 2026 meeting, maintaining the main refinancing rate at 2.15%, the marginal lending facility at 2.40% and the deposit facility at 2.00%. This decision aligns with the assessment that the current stance supports medium-term price stability, as inflation edges below the 2% target while growth shows resilience amid balanced risks. Markets and commentary indicate value in holding steady, with no fixed path ahead given uncertainties in data.
• Price dynamics remain stable near target levels. Headline HICP inflation stood at 2.1% in November 2025, with projections for 1.9% in 2026 driven by base effects from energy and easing non-energy components. Services inflation persists somewhat elevated but trends toward moderation, alongside contained food pressures.
• December 2025 Eurosystem staff projections confirm headline inflation at 2.1% for 2025, declining to 1.9% in 2026 and 1.8% in 2027 before nearing 2% in 2028. Downside risks from soft producer prices and anchored expectations offset potential upsides from geopolitics or fiscal measures.
• Euro area GDP growth remains resilient at subdued levels, with Q3 2025 at 0.3% qoq and forecasts around 1.2-1.4% for 2025-2027. Surveys signal stabilization, bolstered by public investment and external demand against softer private spending.
• The labour market stays tight overall, with unemployment steady at 6.4% through October 2025, near historic lows and solid participation. Real incomes support consumption as inflation eases, with credit conditions aiding gradual household and firm expansion.
• Business sentiment reflects caution over US policy, trade tensions, and tariffs, tempered by easing supply chains and a competitive euro. Export sectors gain a modest lift, while domestic drivers like investment build momentum.
• The Governing Council will continue to make data-dependent decisions meeting by meeting, assessing inflation outlook, underlying trends, and transmission. Both hikes and cuts remain possible based on data, avoiding preset paths amid uncertainties.
• Balance sheet normalization proceeds steadily, with APP and PEPP portfolios shrinking post-reinvestment halts, at a pace deemed suitable without market strain.

​The next meeting is on 4 to 5 February 2026

Next 24 Hours Bias
Medium Bullish

The Swiss Franc (CHF)

Key news events today

No major news event

What can we expect from CHF today?

The Swiss Franc maintains firmness around 0.797-0.80 per USD, driven by haven demand amid geopolitical risks and steady SNB policy at 0%, though forecasts eye a corrective dip before potential USD recovery; over the past year, CHF has gained 12.60% versus the dollar.

Central Bank Notes:

• At its 11 December 2025 monetary policy assessment, the Swiss National Bank (SNB) is widely expected to leave the policy rate unchanged at 0%, extending the pause that began in September as the Governing Board judges that current settings are sufficient to keep inflation near, but still below, its target while avoiding an unnecessary move into negative rates.
• Recent data show that the tentative rebound in Swiss inflation has stalled, with headline CPI easing from 0.1% year‑on‑year in October to 0.0% in November and core inflation slipping to about 0.4%, reinforcing the view that underlying price pressures remain very weak and that deflation risks, while contained, have not fully disappeared.
• The SNB’s conditional inflation forecast is likely to remain close to the September projections, with inflation still seen averaging roughly 0.2% in 2025, 0.5% in 2026, and 0.7% in 2027 under an unchanged policy rate path, though the latest CPI prints argue for a slightly lower near‑term profile and keep open the option of renewed easing if activity or prices weaken further.
• The global backdrop has deteriorated further, as continuing U.S. tariff actions and softer external demand weigh on world trade, while uncertainty in key European and U.S. markets for Swiss exports persists, leaving the SNB cautious about the growth outlook despite Switzerland’s relatively resilient domestic demand.
• Business and labour-market sentiment in export‑oriented manufacturing remains subdued, with firms reporting pressure on margins from the still‑strong franc and softer foreign orders, although the broader economy is still expected to grow at around 1–1.5% in 2025 and unemployment only drifting up gradually from low levels.
• The SNB continues to stress its willingness to act if deflation risks re‑emerge, reiterating that it can ease policy through renewed rate cuts or targeted foreign‑exchange intervention if necessary, while also highlighting its commitment to transparent communication, including the publication of detailed minutes from recent assessments and ongoing dialogue with international partners on FX policy

The next meeting is on 19 March 2026.

Next 24 Hours Bias
Strong Bullish

The Pound (GBP)

Key news events today

No major news event

What can we expect from GBP today?

The Pound (GBPUSD) holds firm gains near 1.3470 against a battered USD, fueled by US political risks to Fed autonomy and Powell’s charges, though technical supports at 1.3365 loom and UK data could cap upside amid BoE easing expectations.

Central Bank Notes:

• The Bank of England’s Monetary Policy Committee (MPC) will meet on 18 December 2025, with the current Bank Rate standing at 4.00 per cent after being held in a close 5–4 vote at the 5 November meeting. Market pricing and analyst commentary point to a high risk of a 25‑basis‑point cut to 3.75 per cent, but this remains conditional on incoming inflation and labour‑market data, so the December note should be treated as pre‑decision guidance rather than an ex‑post summary.
• The BoE is expected to leave its quantitative tightening (QT) framework broadly unchanged through year‑end, maintaining the lower reduction pace in gilt holdings that was set earlier in 2025. Official communications still characterise the existing QT path as consistent with a restrictive stance, with policymakers stressing that balance‑sheet reduction will remain gradual and sensitive to market‑liquidity conditions.
• Headline CPI inflation eased to 3.6 per cent year‑on‑year in October 2025, down from 3.8 per cent in September, helped by softer energy and goods prices, though it remains almost twice the 2 per cent target. Underlying inflation pressures, particularly in services, have continued to moderate only slowly, so the MPC’s central projection still envisages inflation moving closer to, but not yet reaching, 3 per cent over the course of 2026, contingent on further normalisation in energy and wage dynamics.
• UK economic activity remains weak heading into the December meeting, with the labour market showing further signs of slackening. The unemployment rate has risen toward just above 5 per cent on the latest three‑month figures to October, while overall regular pay growth has slowed to around the mid‑4 per cent range, reinforcing the view that domestic cost pressures are gradually easing.
• External conditions continue to cloud the outlook, with fragile global growth and fluctuating commodity prices contributing to bouts of financial‑market volatility. The MPC has highlighted that renewed global energy or food price shocks could temporarily slow the pace of disinflation, but such risks are currently judged unlikely to derail the medium‑term downward trajectory for inflation if domestic demand stays subdued.
• The balance of risks around the inflation outlook remains finely poised. Downside risks are linked to persistently weak domestic demand and rising unemployment, while upside risks come from still‑elevated inflation expectations, sticky services inflation, and the possibility that structural changes in the labour market leave less slack than conventional indicators suggest.
• Overall, the MPC’s stance going into December is restrictive but increasingly open to a gradual easing cycle, with any rate cuts expected to be measured and data‑dependent. Policymakers have reiterated that the Bank Rate will need to stay in restrictive territory until they are confident inflation is on a sustainable path back to the 2 per cent target, and they have signalled that the profile of cuts, once started, is likely to be shallow rather than rapid.
• The next meeting is on 5 February 2026.

  Next 24 Hours Bias
  Medium Bullish

The Canadian Dollar (CAD)

Key news events today

No major news event

What can we expect from CAD today?

The Canadian Dollar (CAD) traded steadily around 1.3890-1.3900 against the USD showing mild weakness amid broader US dollar resilience and mixed oil price signals. Forecasts suggest a potential test of resistance near 1.3915, with downside risks toward 1.3720 if bearish momentum builds, influenced by cautious Fed outlooks and softer Canadian labor data.
​
Central Bank Notes:

• The Governing Council left the target for the overnight rate unchanged at 2.25% at its 10 December 2025 meeting, in line with market expectations and signalling that the earlier easing cycle has likely concluded. The Bank noted that while global tariff tensions and trade uncertainty persist, the external backdrop has stabilised somewhat, reducing the need for additional insurance cuts even as world trade remains fragile.
• The Council acknowledged that uncertainty around U.S. trade policy and tariffs continues to weigh on business sentiment, but recent data show Canadian manufacturing and goods exports holding up better than anticipated. Surveys cited by the Bank suggest export order books have stopped deteriorating, with firms reporting some rebuilding of backlogs despite still‑cautious capital spending plans.
• Canada’s economy rebounded more strongly than expected in the third quarter, with real GDP expanding at an annualised pace of about 2.6% after a 1.8% contraction in Q2, largely on the back of higher crude exports and government spending. Monthly data show output rising 0.2% in September, though flash estimates point to a softer start to Q4 as some sectors give back earlier gains.
• Service sector activity has firmed, with indicators showing the services PMI back above the 50 threshold and broadening gains in business and professional services. However, consumer-facing categories remain mixed, as still‑elevated price levels and only modest real income growth keep a lid on discretionary spending even as tourism and technology‑related services expand.
• Housing markets have continued to stabilise, with national resale activity and prices edging higher through the autumn alongside the earlier decline in borrowing costs. The Bank noted that while some major urban centres are seeing renewed price pressures, tighter underwriting standards and still‑high affordability constraints are expected to cap the pace of any rebound.
• Headline CPI inflation eased to 2.2% year over year in October and is estimated to have remained near that rate in November, keeping it slightly above the 2% target but comfortably within the 1%–3% control range. Core measures have drifted lower, with CPI‑median and CPI‑trim around 3% or below, reinforcing the assessment that underlying price pressures are gradually moderating even as gasoline and some shelter components remain volatile.
• The Governing Council reiterated that the current policy rate is “about the right level” to keep inflation close to target while supporting the economy through a period of structural adjustment, and it signalled a shift away from near‑term easing expectations. While the Bank did not rule out future adjustments, officials stressed that, barring a material downside surprise to growth or inflation, further rate cuts are unlikely before 2026, and attention is now focused on the durability of the recovery and the evolution of core inflation.
• The next meeting is on 28 January 2026.

Next 24 Hours Bias
Medium Bearish

Oil

Key news events today

EIA Crude Oil Inventories (2:30 pm GMT)

What can we expect from Oil today?

Oil prices steadied near recent highs, following a four-day rally driven by escalating tensions with Iran. West Texas Intermediate (WTI) hovered around $61 per barrel, while Brent traded above $65, pausing after gains amid US discussions on Iran and President Trump’s support for protests there.

Next 24 Hours Bias
Medium Bearish

The post IC Markets Global – Europe Fundamental Forecast | 14 January 2026 first appeared on IC Markets | Official Blog.

US Equities Fall Despite Weaker Inflation Data – Dow down 0.8%
US equity markets moved lower overnight, with stocks retreating despite a slightly softer-than-expected Core CPI reading. Bank stocks led the decline as new credit card law proposals weighed, pushing the Dow Jones down 0.80% to 49,191, while the S&P 500 slipped 0.19% to 6,963 and the Nasdaq eased 0.10% to 23,709. In rates markets, Treasury yields finished the session little changed. The 2-year yield edged 0.2 basis points lower to 3.533%, while the 10-year yield rose marginally by 0.4 basis points to 4.179%, reflecting a cautious but stable rates outlook. The US dollar regained momentum, with the DXY rising 0.28% to 99.17, recovering most of the prior session’s losses. Commodities were mixed. Oil prices extended their rally as traders continued to price in Iranian supply risks, with Brent crude climbing 2.43% to $65.42 per barrel and WTI rising 2.69% to $61.10. Gold pulled back modestly from record highs, easing 0.24% to $4,586.52, though prices remain elevated amid lingering geopolitical and policy uncertainty.

Trump Set to Influence Markets Strongly Again in 2026
There is no doubt that the President of the United States has significant power to move markets, given that they run the biggest economy in the world, but most investors and traders will also confirm that President Trump has probably been the most market-moving President in history. If the first couple of weeks of 2026 are anything to go by, that pattern looks set to continue in the trading year ahead. Since we hit the new year, we have already seen US actions in Venezuela and Iran heavily contributing to moves in petro products and overall risk, while proposed new legislation and legal threats have weighed strongly on local US markets. In addition to this, we have a potential Supreme Court ruling coming out later today on the President’s controversial tariff measures and their legality, which is also guaranteed to see strong reactions across financial markets. In short, for most traders, it has been a case of: hope you enjoyed your December holidays, strap in for another volatile ride in 2026.

US Session in Focus Again for Traders
Looking ahead, the macroeconomic calendar remains quiet through the Asian and European sessions once again; however, geopolitics should ensure that the market remains lively. This is especially true in the Asian session, where traders will be monitoring political updates throughout the day in Japan as to whether a snap election will be held. The yen saw some strong moves on the back of this yesterday, and traders are expecting more today. The main calendar focus for the day will again be on the New York session, where markets will digest a heavy US data slate, including Producer Price Index (exp +0.2% m/m and Core +0.2% m/m) and Retail Sales figures (exp +0.5%, Core +0.4% m/m) early in the day. This is followed by Existing Home Sales (exp 4.21 mio) data, and we will also hear from several Federal Reserve officials, including members Miran, Bostic, Williams, Kashkari, and Paulson.

Explore all upcoming market events in the Economic Calendar.

The post General Market Analysis – 14/01/26 first appeared on IC Markets | Official Blog.

Global Markets:

•  Asian Stock Markets : Nikkei up 1.47%, Shanghai Composite down 0.37%, Hang Seng down 0.02% ASX up 0.14%
• Commodities : Gold at $4,641.05 (+0.92%), Silver at $90.542 (+4.50%), Brent Oil at $65.21 (-0.32%), WTI Oil at $60.97 (-0.36%)
• Rates : US 10-year yield at 4.177, UK 10-year yield at 4.2990, Germany 10-year yield at 2.8134

News & Data:

• (USD) Core CPI m/m 0.2% to 0.3% expected
• (USD) CPI m/m 0.3% to 0.3% expected
• (USD) CPI y/y 2.7% to 2.7% expected

Markets Update:

Asian stock markets traded mostly higher on Wednesday, shrugging off broadly negative cues from Wall Street overnight, as Japan’s Nikkei continued its record-breaking rally. Investor sentiment was supported by a U.S. inflation report showing consumer prices rising in line with expectations, while core inflation increased slightly less than forecast, reinforcing optimism about the interest-rate outlook. Asian markets had closed mostly higher on Tuesday.

Although the U.S. Federal Reserve is widely expected to keep rates unchanged at its January meeting, markets continue to anticipate at least one quarter-point rate cut in the coming months.

Australian shares, however, slipped modestly after opening higher, reversing some of the gains from the previous two sessions. The benchmark S&P/ASX 200 fell below the 8,800 level, weighed down by weakness in gold miners, financials, and technology stocks, following negative overnight cues from Wall Street. Losses in major banks and select tech names offset mixed performances among miners and energy stocks.

In contrast, Japanese equities surged sharply, extending gains from the prior two sessions. The Nikkei 225 moved above the 54,200 mark, led by strong advances in technology, exporters, and financial stocks, despite a pullback in some heavyweight shares.

Elsewhere in Asia, markets in New Zealand, China, Hong Kong, Malaysia, Taiwan, and Indonesia posted modest gains, while South Korea and Singapore edged lower.

On Wall Street, U.S. stocks ended Tuesday slightly lower after a choppy session, while European markets finished narrowly mixed. Meanwhile, crude oil prices jumped more than 2 percent amid rising geopolitical tensions between the U.S. and Iran, fueling supply concerns.

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The post Wednesday 14th January 2026: Asian Markets Mostly Higher as Japan’s Nikkei Extends Record Run Despite Weak Wall Street Cues first appeared on IC Markets | Official Blog.

DXY (U.S. Dollar Index):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price has already bounced off the pivot and may continue its bullish move toward the 1st resistance

Pivot: 98.71

Supporting reasons: Identified as an overlap that aligns with the 50% Fibonacci retracement support, where renewed buying pressure could emerge to push the price higher.

1st support: 98.49

Supporting reasons: Identified as an overlap support, indicating a potential area where the price could again stabilize.

1st resistance: 99.53
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement

EUR/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bearish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 1.1702

Supporting reasons: Identified as a pullback resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 1.1616

Supporting reasons: Identified as a swing low support, indicating a potential level where the price could stabilize once again.

1st resistance: 1.1749

Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

EUR/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 184.71

Supporting reasons: Identified as a pullback resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 183./46
Supporting reasons: Identified  pullback support, indicating a potential area where the price could again stabilize.

1st resistance: 185.53
Supporting reasons: Identified as a swing high resistance that aligns with the 127.2% Fibonacci extension, indicating a potential level that could cap further upward movement.

EUR/GBP: 

Potential Direction: Bearish
Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 0.8707

Supporting reasons: Identified as a pullback resistance that aligns with the 61.8% Fibonacci retracement, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 0.8642
Supporting reasons: Identified as a pullback support, indicating a potential area where the price could stabilize once more.

1st resistance: 0.8746
Supporting reasons: Identified as an overlap resistance, indicating a potential level that could cap further upward movement.

GBP/USD:

Potential Direction: Bearish
Overall momentum of the chart: Bullish

The price has already reacted off the pivot and may continue its bearish move toward the 1st support. 

Pivot: 1.3489

Supporting reasons: Identified as an overlap resistance that aligns with the 50% Fibonacci retracement, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 1.3392
Supporting reasons: Identified as a swing low support, indicating a potential area where the price could stabilize once more.

1st resistance: 1.3549
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could halt further upward movement.

GBP/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 211.94

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 210.30
Supporting reasons: Identified as a multi-swing low support, indicating a potential level where the price could stabilize once more.

1st resistance: 214.29
Supporting reasons: Identified as a swing high resistance, indicating a potential level that could halt further upward movement.

USD/CHF:

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price has already bounced off the pivot and may continue its bullish move toward the 1st resistance

Pivot: 0.7966

Supporting reasons: Identified as an overlap support, where renewed buying pressure could emerge to push the price higher.

1st support: 0.7907
Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 0.8035
Supporting reasons: Identified as a pullback resistance that aligns with the 127.2% Fibonacci extension, indicating a potential level that could cap further upward movement.

USD/JPY:

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 157.59

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 155.95

Supporting reasons: Identified as an overlap support, indicating a strong area where buyers might return, and the price could stabilize once again.

1st resistance: 160.09

Supporting reasons: Identified as a resistance that is supported by the 161.8% Fibonacci extension. This level represents the next key area where upward movement could be capped amid increased selling pressure

USD/CAD:

Potential Direction: Bullish                                                                                                                                                                                      

Overall momentum of the chart: Bearish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 1.3800

Supporting reasons: Identified as a pullback support that aligns with the 38.2% Fibonacci retracement, where renewed buying pressure could emerge to push the price higher.

1st support: 1.3713

Supporting reasons: Identified as an overlap support that aligns with the 78.6% Fibonacci retracement, indicating a key level where the price could stabilize once more.

1st resistance: 1.3934

Supporting reasons: Identified as a pullback resistance, making it a possible target for bullish advances and a level where some sellers could return to cap gains

AUD/USD:

Potential Direction: Bearish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 0.6722

Supporting reasons: Identified as an overlap resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 0.6673

Supporting reasons: Identified as an overlap support, this area has provided strong support historically and may attract buying interest for a potential short-term bounce

1st resistance: 0.6766

Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

NZD/USD

Potential Direction: Bearish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before continuing its bearish move down toward the 1st support.

Pivot: 0.5770

Supporting reasons: Identified as a pullback resistance, where selling pressures could intensify and potentially cap any upward retracement.

1st support: 0.5690

Supporting reasons: Identified as a pullback support, this area has provided strong support historically and may attract buying interest for a potential short-term bounce

1st resistance: 0.5820

Supporting reasons: Identified as a pullback resistance, indicating a potential area that could halt any further upward movement.

US30 (DJIA):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 48,844.50

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 48,371.10

Supporting reasons: Identified as an overlap support, suggesting a potential area where the price could stabilize once again.

1st resistance: 49,541.60

Supporting reasons: Identified as a multi-swing high resistance, indicating a potential area that could halt any further upward movement.

DE40 (DAX):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 24,687.00

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 24,203.80

Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 25,501.92

Supporting reasons: Identified as a resistance that is supported by the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

US500 (S&P 500): 

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 6,892.80

Supporting reasons: Identified as an overlap support, where renewed buying pressure could emerge to push the price higher.

1st support: 6,892.80

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once again.

1st resistance: 6,997.80

Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

BTC/USD (Bitcoin):

Potential Direction: Bullish

Overall momentum of the chart: Bearish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 93,926.97

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 90,489.68

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 98,880.63

Supporting reasons: Identified as a pullback resistance that aligns with the 161.8% Fibonacci extension, indicating a potential area that could halt any further upward movement.

ETH/USD (Ethereum):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 3,160.08

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 3,051.82

Supporting reasons: Identified as an overlap support, indicating a potential level where the price could stabilize once more.

1st resistance: 3,374.43
Supporting reasons: Identified as an overlap resistance, indicating a potential area that could halt any further upward movement.

WTI/USD (Oil):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price has already bounced off the pivot and may continue its bullish move toward the 1st resistance

Pivot: 60.26

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 56.69
Supporting reasons: Identified as an overlap support, indicating a key level where the price could stabilize once more.

1st resistance: 62.16
Supporting reasons: Identified as a swing high resistance that aligns with the 161.8% Fibonacci projection, indicating a potential area that could halt any further upward movement.

XAU/USD (GOLD):

Potential Direction: Bullish

Overall momentum of the chart: Bullish

The price could see a short-term pullback toward the pivot before rising again toward the 1st resistance.

Pivot: 4,549.86

Supporting reasons: Identified as a pullback support, where renewed buying pressure could emerge to push the price higher.

1st support: 4,500.59
Supporting reasons: Identified as a pullback support, indicating a key level where the price could stabilize once more.

1st resistance: 4,634.68

Supporting reasons: Identified as a swing high resistance, indicating a potential area that could halt any further upward movement.

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The post Wednesday 14th January 2026: Technical Outlook and Review first appeared on IC Markets | Official Blog.

Well, the US may have tried to ease the approval criteria for Nvidia H200 chip exports to China. But evidently, Beijing looks to be having none of that. Quite literally.

The latest report here states that China customs authorities have told customs agents this week that Nvidia’s H200 artificial intelligence (AI) chips are not permitted to enter the country. One of the sources claimed that:

“The wording from the officials is so severe that it is basically a ban for now, though this might change in the future should things evolve.”

As a reminder, the H200 AI chip is quite the contentious issue involving US-China relations at this point in time as it it Nvidia’s second-most powerful AI chip.

The report goes on to say that Chinese government officials have also called tech firms to a meeting where they were explicitly instructed not to purchase the H200 chips unless necessary.

Another source added that so far, exemptions are only being discussed for R&D purposes and universities. Otherwise, this looks to be a blanket ban unless there are special circumstances involved.

More to come..

This article was written by Justin Low at investinglive.com.

The post Ex-Dividend 14/01/2026 first appeared on IC Markets | Official Blog.

Both exports and imports surged in December to wrap up the year, as shown by the data here. Ignoring the bit of window dressing, the full-year picture tells a much more compelling story to what is happening on the trade front. From the numbers, China recorded a staggering record $1.19 trillion full-year trade surplus in 2025. It is the first time that it broke the $1 trillion mark.

So even with US tariffs, China’s trade appears unfazed as Beijing remains adamant that it will stand its ground on the trade front. So, how did China achieve this in 2025?

Well, it wasn’t just a case of finding solutions to US tariffs. I mean, it was by some extension. However, it is the fact that China has already made preparations for this outcome long before Trump pulled the trigger in April last year:

• How China has been preparing itself ahead of this tariffs eventuality with the US
• Here’s why Trump’s deal with Vietnam is a win for China

And that has helped to cushion any blow from Trump’s tariffs backlash. There is no doubt that the escalation during April to May did bring about some nervous moments. But at the end of it all, things have worked out well for Beijing all things considered.

So, what are the key details to note?

For one, auto exports powered growth amid a surge in pure electric vehicle (EV) shipments. Vehicle exports as a whole jumped by over 19% last year and within that, EV exports surged by nearly 49%. As a reminder, China is the world’s top auto exporter for a third straight year running now.

But perhaps the greater story is that even with this record trade surplus, exports to the US actually fell by 20% on the year. So, where did China shift their export momentum towards? Well, Beijing planned out a strategic focus to export more to Africa and South East Asia mostly. The former saw a near 26% rise in exports with the latter seeing an over 13% jump in exports last year. Meanwhile, exports to the EU saw an increase of a little over 6%.

Trump’s tariffs will continue to have an impact on the global trade front for sure. But at least from the numbers, China is sending a signal that they won’t be shaken down by tariffs and that they can do well to ride things out until the end of Trump’s term.

This article was written by Justin Low at investinglive.com.

Precious metals are once again stealing the spotlight with silver surging above the $90 mark. However, there are still other key things taking place across markets too. With the rise in USD/JPY back above 159.00 overnight, the selloff in the Japanese yen currency and bond market continues to intensify.

10-year Japanese government bond yields have now surged up to above 2.18%, its highest since February 1999.

The rout is extending for a third straight month now, coinciding with Sanae Takaichi’s undertaking as prime minister. It’s very much a case of fiscal risks seeping in, as evident by the selloff in the currency as well. And market players are pricing in a higher premium in that regard in making up for the fact that the fiscal considerations are also accompanied by the government locking horns with the Bank of Japan (BOJ) on monetary policy setting.

BOJ governor Ueda sneaked in a comment earlier here in making sure that markets are still aware of their intentions to stick to their guns. That despite the constant political pressure by Tokyo officials in wanting the central bank to shelve rate hikes for the time being.

30-year yields in Japan have also risen to above 3.51% today, the highest on record. And amid the scuffle depicted above, the Japanese yen is also failing to find comfort as it already loses its preferred safe haven status and shelter for investors. USD/JPY is trading up 0.1% to 159.25 currently with watchful eyes on a push towards the key 160.00 level next.

It feels like it is only a matter of time before the ministry of finance intervenes in the market. However, the question remains what exactly is their appetite to keep doing so when the fundamentals are not changing? It’s a tough ask.

This article was written by Justin Low at investinglive.com.

• Bitcoin Technical Analysis Today as Bitcoin Feels “Stuck” Despite a Bullish Backdrop
• JPM Dimon said the US economy is resilient but warned markets may be underpricing risk
• Japan 5-year JGB auction shows steady demand at higher yields
• China trade beats forecasts as 2025 surplus hits massive record
• BoJ sets out what will be discussed at a February 26 market operations meeting
• Full year trade data out from China, exports and imports both up y/y
• World Bank lifts global growth outlook but warns of weakest decade since 1960s
• PBOC sets USD/ CNY mid-point today at 7.0120 (vs. estimate at 6.9807)
• Japan stocks hit records as snap election (for February 8?) talk weakens yen
• New Zealand data: ANZ commodity index falls as dairy slides, meat and wool hit records
• ICYMI from Reuters: drone strikes hit Black Sea tankers as Kazakh output drops
• More from Fed’s Barkin, sees encouraging CPI, stresses policy flexibility
• Bitcoin has hit its highest against the USD in 2 months
• Japan Reuters Tankan shows manufacturers’ sentiment slips to six-month low
• US eases Nvidia H200 export rules to China under strict conditions, shares higher
• Fed’s Barkin says inflation is easing gradually and labour market risks remain contained.
• Oil: Private survey of inventory shows a headline crude oil build larger than expected
• New Zealand Building Permits (November) +2.8% m/m (vs. prior –0.9%)
• US eases regulations on Nvidia H200 chip exports to China

• NZ data adds to recovery signs, but FX reaction muted

• Oil shrugs off inventory builds amid geopolitical risk

• Japan equities hit records as yen slides on election bets

• Fed’s Barkin signals patience, defends independence

• China trade hits record, tech and commodities drive imports

New Zealand data kicked things off on a firmer footing, with November 2025 building permits rising both month-on-month and year-on-year, adding to signs that activity is stabilising after a prolonged downturn. The improvement reinforces the recovery narrative building around the economy, though NZD/USD showed little enthusiasm, suggesting the good news is being overshadowed by offshore drivers.

In commodities, early focus fell on energy markets. A private survey of U.S. oil inventories released ahead of the official government data pointed to larger-than-expected builds across crude, gasoline and distillates. Ordinarily a headwind for prices, the data was offset by ongoing geopolitical risk premia, with protests in Iran and renewed threats of U.S. intervention from Donald Trump continuing to underpin crude. As the session progressed gold and silver rose strongly.

In Asia, sentiment was mixed. Japan’s latest Reuters Tankan showed business confidence easing at the start of the year, with manufacturers’ sentiment slipping to a six-month low as weak demand from major economies weighed on materials-heavy sectors. The survey reinforces a slower-growth signal for Japan’s export sector, potentially tempering expectations for near-term Bank of Japan tightening, even as domestic-facing activity remains comparatively resilient.

U.S. central bank commentary followed. Richmond Fed President Tom Barkin pushed back against political pressure on the Federal Reserve, stressing the importance of institutional independence. On the economy, Barkin struck a measured tone, saying inflation remains above target but is not accelerating, while the uptick in unemployment does not appear disorderly. His remarks suggested comfort with current policy settings and reinforced the Fed’s patient, data-dependent stance.

Japanese equities then took centre stage. Stocks surged to fresh record highs as speculation intensified that Prime Minister Sanae Takaichi may call a snap election, with February 8 floated as a possible date. Markets have embraced the so-called “Takaichi trade,” pricing in looser fiscal policy. The Nikkei 225 broke above 54,000, while the yen weakened to around 159.40 per dollar, its softest level since July 2024, not farfrom levels that previously prompted intervention, even as 10-year JGB yields sit near 27-year highs.

In trade policy, the U.S. formally eased restrictions on advanced AI chip exports to China, publishing rules that allow conditional shipments of Nvidia’s H200 chips. The framework shifts from blanket denial to case-by-case licensing, subject to third-party testing, domestic supply safeguards and strict security requirements, keeping the reopening narrow and tightly controlled.

Finally, China trade data underscored the economy’s ongoing reliance on external demand. 2025 total trade hit a record 45.47 trillion yuan, cementing China’s position as the world’s largest goods trader. Exports rose 6.1%, imports 0.5%, while tech-related imports surged, led by strong gains in computer parts and electronic components. Commodity volumes also remained firm, with crude oil and metal ore imports rising, highlighting resilient industrial demand even as global prices softened.

Asia-Pac
stocks:

• Japan
  (Nikkei 225) +1.55%
• Hong
  Kong (Hang Seng) +091%
• Shanghai
  Composite +1.2%
• Australia
  (S&P/ASX 200) 0%, flat

This article was written by Eamonn Sheridan at investinglive.com.

Summary:

• Dimon says US economy remains resilient

• Labour market softer but not worsening materially

• Consumers still spending; businesses broadly healthy

• Tailwinds: fiscal support, deregulation, Fed policy

• Risks: geopolitics, sticky inflation, high asset prices

Pasting as an ICYMI.

JPMorgan Chase chief executive Jamie Dimon said the U.S. economy remains resilient even as labour market momentum cools, arguing that consumer spending and generally healthy corporate conditions could keep activity supported for some time.

In comments released alongside the bank’s latest communications, Dimon said labour markets have softened but do not appear to be deteriorating materially. He also pointed to continued consumer spending as a key pillar of growth, suggesting households have so far absorbed higher rates and price levels without a sharp pullback.

Dimon said supportive conditions could persist, highlighting ongoing fiscal stimulus, the potential benefits from deregulation, and the Federal Reserve’s recent monetary policy settings as factors that may help keep the expansion intact. The message aligns with a broader “soft-landing” narrative: cooling but not collapsing labour dynamics, steady consumption, and businesses that remain broadly functional despite higher financing costs and lingering uncertainty.

However, Dimon warned that markets may be underpricing the downside risks. He flagged “complex geopolitical conditions” as a potential shock vector, alongside the risk that inflation remains stickier than expected. He also pointed to elevated asset prices, implying that stretched valuations could amplify volatility if the macro environment deteriorates or if policy expectations shift.

The tone was cautious rather than bearish: Dimon acknowledged the resilience in current conditions but emphasised vigilance, reflecting a view that the economy can stay firm while still being vulnerable to tail risks. For investors, his comments underscore a key tension in current pricing, a market leaning into stability and easing inflation, while major corporate leaders continue to highlight geopolitical uncertainty, inflation persistence and valuation risk as underappreciated hazards.

This article was written by Eamonn Sheridan at investinglive.com.

Summary:

• Japan 5-year JGB auction clears smoothly

• Stop rate (the highest yield (or lowest price) at which the government accepts bids in a bond auction, the yield where the auction “stops.”) set at 1.65%, average yield 1.639%

• Only 0.48% of bids hit the lowest price

• Demand remains firm despite higher yields

• No immediate pressure on BOJ intervention

What it means (in brief)

• Investors are comfortable buying JGBs at current yield levels

• The low share of bids at the cheapest price suggests no stress

• Domestic buyers are still supporting the curve

• The BOJ has room to stay gradual, not reactive

Japan’s latest 5-year government bond auction delivered a solid but not spectacular outcome, reinforcing the view that demand remains intact even as yields sit near multi-year highs and the Bank of Japan continues to edge policy toward normalisation.

The Ministry of Finance sold ¥1.93 trillion of 5-year Japanese Government Bonds (JGBs) from ¥5.94 trillion of competitive bids, with the stop rate set at 1.65%. The average yield came in at 1.639%, marginally through the stop, while the average accepted price was 99.820 versus a lowest accepted price of 99.770.

Importantly, just 0.48% of bids were accepted at the lowest price, signalling limited tail risk and suggesting that investors were willing to bid close to prevailing market levels rather than demanding a sharp concession. That metric points to orderly demand, particularly from domestic real-money accounts such as banks and insurers, which continue to anchor the intermediate part of the curve.

The bid-to-cover ratio, implied by the volume figures, remained healthy, indicating that higher absolute yield levels are still drawing interest even as expectations build that the BOJ will further scale back accommodation over time. The 5-year sector sits at the crossroads of policy expectations and curve positioning, making it a useful barometer of confidence in the BOJ’s gradual approach.

Recent volatility in the yen and rising global yields have raised questions about foreign participation, but this auction suggests domestic demand remains sufficiently strong to absorb supply without stress. That resilience reduces near-term pressure on the BOJ to step in via market operations, even as officials remain alert to disorderly moves.

Overall, the result fits the broader narrative: Japan’s bond market is adjusting to a higher-yield regime, but demand remains functional and well-distributed. Unless auctions begin to show heavier tails or weaker cover ratios, the BOJ can afford to stay patient as it continues to recalibrate policy and operations.

As a ps, yen has ticked back some gains (see chart at top iof post), this seems to have stymied yen selling sentiment for now:

• BoJ sets out what will be discussed at a February 26 market operations meeting

This article was written by Eamonn Sheridan at investinglive.com.