⚠️ Risk-off mood to start the week: markets are reacting to fresh US tariff threats linked to the Greenland dispute, while trading conditions are thinner because US cash markets are closed today for Martin Luther King Jr. Day.
🇺🇸🇪🇺 Trade tensions back in focus
President Donald Trump said new tariffs on a group of European countries and the UK are planned from 1 February (10%), with a potential step-up to 25% from 1 June if Washington does not obtain consent on the Greenland issue. Europe signalled readiness to retaliate, but also left the door open for negotiations.
📉 Equities
- US index futures opened the week lower, with losses led by tech as geopolitical and trade risks intensified.
- European equity futures are also under pressure, reflecting concerns over potential retaliation and slowing global growth.
- With US cash equities closed, liquidity is thinner and price moves may appear exaggerated.
💵 FX (USD mixed)
Initial US dollar strength faded, with markets showing scepticism over how far policy escalation will actually go. The yen and Swiss franc are attracting safe-haven flows as risk appetite weakens.
🥇 Gold & Silver
Safe-haven demand continues to dominate:
- Gold has pushed to fresh record highs above $4,670.
- Silver rebounded sharply, trading near $93 after a strong daily gain.
🛢 Oil
Oil prices remain relatively stable compared with other risk assets as traders balance geopolitical risks against demand concerns:
- Brent holds near the mid-$60 area.
- WTI trades close to $60 per barrel.
🌏 Asia: China and Japan data in focus
- China: Economic growth slowed to 4.5% y/y in Q4, although full-year growth met the official 5% target. Export strength continues to offset weak domestic demand, while retail sales and investment remain under pressure.
- China property sector: New home prices declined again in December, marking the steepest annual drop in five months, with property investment still deeply negative.
- Japan: Machinery orders recorded a sharp monthly decline, pointing to weakening investment momentum.
₿ Crypto
Cryptocurrencies are seeing a deeper pullback as capital flows out of risk assets. Ongoing delays and uncertainty around US crypto regulation are adding pressure to sentiment.
📅 What to watch today
- US markets closed - expect lower liquidity and higher sensitivity to headlines.
- Ongoing EU-US trade developments and risk sentiment during the European session.
Trade carefully, manage risk, and have a strong start to the week! 📊✅
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