At a glance:Musk says China will dominate AI compute via power scaleElectricity, not chips, seen as key AI bottleneckChina cites infrastructure and energy advantagesDomestic chip capabilities acceleratingBeijing targets AI self-reliance by 2027ICYMI, Elon Musk said China is on track to surpass all other countries in artificial-intelligence computing power, arguing that electricity generation, not chips, is becoming the primary constraint on scaling AI systems.Speaking on the Moonshots with Peter Diamandis podcast, Musk said China’s ability to rapidly expand power generation gives it a decisive advantage in the global AI race. He suggested China could reach roughly three times the electricity output of the United States by 2026, enabling it to support the massive energy demands of AI data centres. Based on current trends, Musk said China is likely to “far exceed the rest of the world” in AI compute capacity, adding that while chips matter, China will ultimately “figure out the chips.”Musk’s comments align with growing concerns in the US that power availability and grid constraints, rather than algorithms or hardware alone, are increasingly limiting AI deployment. Concentrated demand from hyperscale data centres and major technology firms has tightened electricity supply in several regions, slowing project expansion.China respondsChinese experts said Musk’s remarks reflect his personal assessment shaped by constraints faced in the US, rather than a simple China-US comparison. Zhou Mi, a senior researcher at the Chinese Academy of International Trade and Economic Cooperation, said China’s relative advantage lies in its power infrastructure and energy scalability, which provide a foundation for sustained growth in computing capacity.Zhou added that China’s expanding renewable base, including large-scale wind and solar installations, supports long-term AI development by ensuring reliable electricity supply, a prerequisite for high-intensity computing workloads.On semiconductors, Wei Shaojun, vice chairman of the China Semiconductor Industry Association, said external restrictions have accelerated domestic innovation. He noted progress in chip architecture, advanced packaging, system integration and AI accelerators, with Chinese GPUs increasingly deployed across training, inference and edge-computing use cases.According to a 2025 Morgan Stanley report, says China's Global Times, China’s self-sufficiency rate in AI GPUs has risen sharply and is expected to continue climbing through 2027. Chinese authorities have outlined plans to secure core AI technologies and deepen industrial adoption by that timeframe, underscoring a strategic shift from pure hardware catch-up toward system-level innovation. This article was written by Eamonn Sheridan at investinglive.com.

At a glance:Goldman survey shows 59% bearish on crudeMost negative sentiment since April 2025Oil seen as preferred short by record numberSupply glut driven by OPEC+, US, Brazil, GuyanaGeopolitics failing to offset oversupply concernsGoldman Sachs said institutional investor sentiment toward crude oil has turned sharply bearish, with positioning now close to the most negative levels seen in nearly a decade, as markets confront a growing global supply glut.In a survey of more than 1,100 institutional clients across asset classes, Goldman found that 59% of respondents are bearish or slightly bearish on crude, marking the weakest sentiment reading since April 2025. The result places investor confidence just shy of record lows in a monthly dataset that stretches back to January 2016.The survey shows a record share of investors now view oil as their preferred short, reflecting mounting concerns that supply growth is outpacing demand. Respondents pointed to rising output from OPEC+, record production levels in the United States, and accelerating supply growth from Brazil and Guyana as key contributors to the emerging imbalance.Goldman noted that geopolitical developments, while often supportive for oil prices in isolation, are currently reinforcing bearish sentiment by underscoring the market’s ability to absorb disruptions. Investors appear increasingly confident that spare capacity, non-OPEC growth, and inventory buffers are sufficient to offset most geopolitical risks, limiting upside price shocks.The results suggest a significant shift in how institutional investors perceive oil’s risk-reward profile, with macro concerns such as slowing global growth, energy transition dynamics, and fiscal pressures weighing alongside supply-side factors. The breadth of bearish sentiment across asset classes highlights a widespread conviction that the market is entering a period of excess supply rather than scarcity.While Goldman cautioned that extreme positioning can occasionally set the stage for short-term rebounds, the survey underscores a structural shift toward defensive or outright bearish oil strategies as investors position for prolonged oversupply and heightened volatility in energy markets. This article was written by Eamonn Sheridan at investinglive.com.

Summary:HSBC sees gold hitting $5,000/oz in H1 2026 on geopolitical and debt risksBank cuts 2026 average forecast slightly to $4,587/ozWarns of deeper correction if Fed halts easing or risks fadeForecast range for 2026 seen at $3,950–$5,050Longer-term forecasts raised for 2027, 2028, and 2029HSBC said gold prices could surge as high as $5,000 an ounce in the first half of 2026, driven by persistent geopolitical risks, elevated sovereign debt burdens, and sustained investor demand for hard-asset protection.However, the bank simultaneously trimmed its average 2026 gold price forecast, highlighting the risk that such strong gains could ultimately sow the seeds of a later correction. HSBC lowered its 2026 average gold forecast to $4,587/oz from $4,600, while warning that volatility is likely to remain elevated throughout the year.The bank noted that gold’s powerful rally could face headwinds should geopolitical tensions ease or if the U.S. Federal Reserve pauses or ends its rate-cutting cycle, conditions that could prompt profit-taking and a sharper pullback. HSBC sees a wide trading range of $3,950 to $5,050 per ounce for 2026, underlining the unusually large dispersion of possible outcomes.Despite the near-term caution, HSBC upgraded its medium- and longer-term outlook for gold, pointing to structural drivers such as rising fiscal deficits, geopolitical fragmentation, and central-bank diversification away from traditional reserve assets. The bank raised its average 2027 price forecast to $4,625 from $3,950, and its 2028 forecast to $4,700 from $3,630, reflecting expectations that underlying demand will remain robust.HSBC also flagged a 2027 year-end price view of $4,600 and introduced a new 2029 average forecast of $4,775, suggesting the bank sees gold holding elevated levels even beyond the current cycle.Overall, the outlook highlights a market defined by strong upside potential but rising correction risk, with price action increasingly sensitive to shifts in geopolitics, monetary policy expectations, and investor positioning. This article was written by Eamonn Sheridan at investinglive.com.

US posts smallest trade deficit since 2009Atlanta Fed Q4 GDPNow 5.4% vs 2.7% priorNew York Fed survey sees rising one-year consumer inflation expectations, jobs angstUS October wholesale inventories +0.2% vs +0.2% expectedUS initial jobless claims 208K versus 210K estimate.Preview: December non-farm payrolls by the numbers. Finally past the shutdown fogMarkets:Gold up $20 to $4473US 10-year yields up 3 bps to 4.17%WTI crude oil up $2.64 to $58.63S&P 500 flatCAD leads, AUD lagsOil was the spot to watch as the market zeros in on Iran and protests there. The market picked up when there were reports of a cutoff in phones and the internet in an effort to quell protests. That's something of a tell that they're getting beyond what the government can control. It resulting in oil wiping out two prior days of declines.The US dollar was broadly stronger, trailing only the loonie. The very strong trade balance report led to a big pickup in GDP forecasts as we work through the post-shutdown data mess. That was October data so it's stale but it will be a spot to watch.Speaking of watching, Friday is a big day with US and Canadian jobs reports. Eyes will be on the Supreme Court at 10 am ET as well for the possibility of a tariff decision. This article was written by Adam Button at investinglive.com.

Summary:Trump says he has ordered $200 bn in MBS purchases to lower mortgage ratesPlan aims to compress mortgage spreads and reduce monthly paymentsPurchases would be linked to Fannie Mae and Freddie Mac resourcesProposal revives state-led intervention in housing finance marketsMarkets may view comments as political pressure on long-term ratesDonald Trump said, in a 'tweet' ('truth') on his own social media app, he has instructed government representatives to purchase $200 billion of mortgage-backed securities (MBS), framing the move as a direct intervention aimed at lowering mortgage rates and restoring housing affordability in the United States.In a statement posted on social media, Trump said housing affordability has deteriorated sharply as mortgage rates surged, placing home ownership further out of reach for many Americans.Trump said the planned MBS purchases would be funded through Fannie Mae and Freddie Mac, government-sponsored enterprises that he noted were not sold during his first term, a decision he described as contrary to expert advice at the time. According to Trump, those entities are now worth “many times” their prior valuations and collectively hold roughly $200 billion in cash, which he argues can be deployed to support the housing market.The president said large-scale MBS buying would narrow mortgage spreads, push borrowing costs lower, and reduce monthly mortgage payments. He described the move as part of a broader strategy to reverse what he characterised as damage inflicted on housing affordability over the past several years.While Trump did not specify which agencies or officials would execute the purchases, the proposal effectively revives the concept of state-directed demand for mortgage securities, a tool historically associated with crisis-era monetary policy. Markets may interpret the comments as signalling political pressure to use government balance sheets to directly influence long-term interest rates, particularly in housing finance.The announcement comes amid ongoing debate over the appropriate role of government-backed institutions in stabilising housing markets and managing mortgage costs, especially as affordability metrics remain stretched despite easing inflation elsewhere in the economy. $200bn QE in MBS. 2026 is an election year, Trump's fall in popularity will be a negative for the Republican Party in the mid-terms. I expect there will be more populist fiscal policy as trump seeks to buy votes like this in the months ahead. This profligacy will weigh on the USD. This article was written by Eamonn Sheridan at investinglive.com.

There was a distinct air of rotation in US stock markets on Thursday as chipmakers struggled and dragged down the Nasdaq while most other stocks were higher, some strongly so.This highlights the divergence:Within IT, the losers were some of the chip and memory names that rallied big earlier in the week. Western Digital was a laggard, down 6.8% to erase the pop.High-flying Intel and Micron were also losers while Nvidia fell 2%.The big winners were energy names as Iran protests spread and Trump talked about the US attacking if protesters were killed.Some highlights:Haliburton +6.8%OXY +5.6%COP +5.4%XOM +4.9%Crude prices rallied more than 4% and are finishing the day near the highs, wiping out the prior two days of selling. It's been a very volatile week in energy markets given the events in Venezuela.A big potential event tomorrow is the Supreme Court decision on tariffs at 10 am ET. The court doesn't pre-announce what decisions are coming but it said tomorrow would be a 'decision day' and that could mean tariffs. One of the top performers today was Costco, up 3.7% and it stands to be one of the winners if tariffs are struck down.Another winner on the day was Ford, up 4.8% and Nike up 3.0% with the later reversing after early losses. There is always the lingering feeling that decisions like this leak, especially given the stakes. I suspect Nike is one of the cleanest trades on tariffs but the details of the decision and what it means for inevitable US efforts to reconstitute them will be critical.Other winners on the day were housing-related names, which could be a tariff trade and it's also somewhat counter-intuitive to see home builders rally (LEN up 5.3%) on a day when yields rose on better-than-expected US trade data.Another big winner was defense after Trump said late yesterday he wanted to boost the US military budget by 50%.Closing changes:S&P 500 flatNasdaq Comp -0.4%DJIA +0.5%Russell 2000 +1.1%Toronto TSX Comp +0.6% This article was written by Adam Button at investinglive.com.

The market focus for the data agenda ahead here in Asia - Pacific today, Friday, January 9, 2026, is the December inflation data due from China:due at 0130 GMT, which is 2030 US Eastern time The December inflation data will be closely watched for signs of whether the modest recovery in prices seen late last year has continued into year-end. A firm tipping a lower than consensus forecast, Zhe Shang Securities at 0.7% y/y, seeing no change from the November result. Zhe Shang expect 0% m/m, i.e. no change. You'll note in the scrfeenshot below there is no consensus forecast for the m/m.The firm's PPI forecast has it remaining in negative territory at around -1.9% y/y, 'up' from November but still deeply negative. The backdrop entering today’s release is one of persistently low inflation but slight upward momentum in consumer prices. November’s CPI logged a 0.7% y/y rise, its fastest pace in nearly two years, driven largely by rebounding food prices (especially fresh produce) and modest gains in other categories, while core inflation held around 1.2%. Meanwhile, PPI has remained deeply negative, reflecting ongoing factory-gate deflation as industrial prices continue to lag, although some stabilization was seen on a m/m basis late in 2025. Market participants will parse today’s figures for evidence that domestic demand is firming and whether price pressures are broadening beyond volatile food items. The data will also feed into assessments of China’s growth trajectory and implications for global reflation narratives in early 2026. Earlier this week the PBoC hinted at rate cuts ahead this year:China flags rate and RRR cuts in 2026 as PBoC leans dovishCheck out that post, specifically the screenshot attached of USD/CNY and my 'read between the lines' comment. They are a tricky bunch at the PBoC!This snapshot from the investingLive economic data calendar.The times in the left-most column are GMT.The numbers in the right-most column are the 'prior' (previous month/quarter as the case may be) result. The number in the column next to that, where there is a number, is the consensus median expected. This article was written by Eamonn Sheridan at investinglive.com.

Oil has steadily climbed today, though not enough to recoup the losses on Tuesday and Wednesday.WTI crude is up $1.60 to $57.60, which is a nearly 3% gain and comes after yesterday's decline to the lowest since December 17 and a threat of the five-year low set in December.It's been a lively week in the crude market after the US kidnapped Venezuelan President Maduro. The fear initially was that would lead to turmoil but it appears to be mostly calm, at least for now.However the relatively painless operation may have emboldened US plans elsewhere, with Trump today talking about Cuba and also warning about US retaliation if Iranian protesters are killed. As for Iran, the internet was evidently cut off in parts of the country today as protests spread. That's often a sign that the state is losing control.Unlike Venezuela, Iran is still a exporting around 2 million barrels per day and producing 3.2-3.5 million barrels per day. That's much more material in the global market than the 0.5m bpd from Venezuela. It's also in a part of the world that can get tumultuous quickly.China may also be seeing what happened in Venezuela and be looking to stockpile more crude, or secure alternative supplies. On Wednesday, the US seized two Venezuela-linked oil tankers, including one that was flying a Russian flag. The market may also be re-thinking timelines on additional Venezuelan oil. US Treasury Secretary Scott Bessent today said they could add 0.5mbpd by the end of this year but anything much beyond that is going to take large amounts of investment and political certainty.In terms of inventories, US data yesterday showed very large product builds and that gnaws at worries about oversupply this winter. For now though, it looks like the market doesn't want to challenge the $55 low from late last year.I think that at some point this year there is going to be an excellent opportunity to buy crude because $55 is unsustainable and will lead to declining production in the US. This article was written by Adam Button at investinglive.com.

If the Supreme Court limits the President’s use of IEEPA in the Learning Resources case, the administration will certainly pivot to other legislative tools, as Bessent references here. But if those tools were as good as the IEEPA, they would have used them already. While IEEPA offers the broadest authority, the executive branch has several other levers to pull, though they come with more red tape and procedural delays.Section 232 of the Trade Expansion Act of 1962 You likely remember this from the steel and aluminum tariffs in 2018 and then again when Trump returned. It allows the President to adjust imports if the Department of Commerce determines they threaten national security. The main constraint here is time. The Secretary of Commerce has to conduct an investigation that can take up to 270 days. To use this effectively as a replacement for IEEPA, the administration would need to aggressively speed up these investigations or broaden the definition of "national security" to cover general consumer goods, which opens them up to further legal challenges.Section 301 of the Trade Act of 1974 This is the primary tool used during the trade war with China. It is designed to address unfair trade practices, such as intellectual property theft or non-tariff barriers. Unlike the blanket authority of IEEPA, Section 301 is more surgical and requires the U.S. Trade Representative to establish a factual basis for the tariffs. While it is generally more targeted, the administration has shown they can cast a very wide net with this statute if they frame the "unfair practice" broadly enough. My guess is this one is most likely to survive court challenges but it will take awhile to implement.Section 338 of the Tariff Act of 1930 This is the "sleeper" option that gets very little attention. It allows the President to impose new duties of up to 50% if a country is found to discriminate against U.S. commerce. The administration could theoretically argue that foreign Value Added Tax (VAT) systems—which rebate exports while taxing imports—constitute discrimination. Dusting off this statute would be a massive escalation and would likely be viewed as a direct challenge to the World Trade Organization system. This is an antiquated one but the administration might argue that VAT taxes qualify as discrimination and courts might challenge this on "Major Questions" so text around that in the upcoming decision will be telling.Section 122 of the Trade Act of 1974 This section is specifically designed to handle balance-of-payments deficits. It allows for a temporary import surcharge of up to 15% to protect the dollar or reduce a serious trade deficit. The catch is that it is a temporary fix. The surcharge is capped at 150 days unless Congress steps in to extend it, making it less useful for a long-term trade strategy. The US might try to bridge other investigative timelines by using this first but it limits tariffs to 15%.All these different statutes will make the reasoning of any Supreme Court decision as important as the decision itself. On the kneejerk, the strongest possible repudiation would be if the Supreme Court tells the administration to refund the tariffs, but that's not something legal watchers think is likely. This article was written by Adam Button at investinglive.com.

What's expected:Consensus estimate +60K (range +19K to +155K)November +64KPrivate consensus estimate +64KUnemployment rate consensus estimate: 4.5% vs 4.6% priorParticipation rate consensus 62.5% priorPrior underemployment U6 prior 8.7%Avg hourly earnings y/y exp +3.6% y/y vs +3.5% priorAvg hourly earnings m/m exp +0.3% vs +0.1% priorAvg weekly hours exp 34.3 vs 34.3 priorDecember jobs so far:ADP report +41K vs +50K expected and -29KISM services employment 52.0 vs 49.0 prior -- 10 month highISM manufacturing employment 44.9 vs 44.0 priorChallenger Job Cuts 35,553 y/y vs 71,321 -- 17 month lowPhilly employment +12.9 vs +6.0 priorEmpire employment 7.3 vs 6.6 priorInitial jobless claims survey week 224K vs 225K expectedLooking through these numbers, there are plenty of reasons to see upsides to +60K and potentially in a big way. A reading close to 100 would end the slim hopes of a January cut and deeply slash the 43% chance of a March cut that's currently priced in. Seasonally, there is a minuscule drag on non-farm payrolls in December, according to BMO with the report missing 52% of the time and beating 48% of the time. In general, the US dollar outperforms on strong data and slides on weak data, with USD/JPY generally the cleanest trade on that theme. In contrast, the stock market generally dislikes a strong jobs report as it diminishes the chance of a rate cuts from the Federal Reserve.On the unemployment rate, note that the unrounded figure in November was 4.564%, which is very close to being rounded down to 4.5%. The market increasingly watches those margins so be wary of a slight change looking like a whole tick. This article was written by Adam Button at investinglive.com.

From the Atlanta Fed:The GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the fourth quarter of 2025 is 5.4 percent on January 8, up from 2.7 percent on January 5. After recent releases from the US Bureau of Economic Analysis, the US Census Bureau, and the Institute for Supply Management, the nowcast of fourth-quarter real personal consumption expenditures growth increased from 2.4 percent to 3.0 percent, while the nowcast of the contribution of net exports to fourth-quarter real GDP growth increased from -0.30 percentage points to 1.97 percentage points.This is something I flagged after the trade balance report but it's likely to get more attention now, at least on the political side of things. Note that we're very early in the Q4 reporting cycle because of the US government shutdown. We have Oct trade but still need November and December, along wit ha host of other data. This article was written by Adam Button at investinglive.com.

One year inflation expectations +3.4% vs +3.2%Three-year inflation unchanged at 3.0%Five year inflation unchanged at 3.0%Job-finding expectations hit record lowExpectations of home price growth unchanged at 3%Perception of credit access fellExpectations of losing a job roseMedian one-year-ahead earnings growth expectations remained unchanged at 2.6% in NovemberThe mean perceived probability that U.S. stock prices will be higher 12 months from now increased by 0.1 percentage point to 38.0%. From the survey:Perceptions about households’ current financial situations deteriorated notably, with a larger share of respondents reporting that their households were worse off compared to a year ago and a smaller share reporting they were better off. Expectations about year-ahead financial situations also deteriorated slightly, with a smaller share of respondents reporting that their households are expecting to be better off a year from now.Mean unemployment expectations—or the mean probability that the U.S. unemployment rate will be higher one year from now—improved slightly, decreasing by 0.4 percentage point to 42.1 percent.The mean perceived probability of losing one’s job in the next 12 months increased by 1.4 percentage points to 15.2%. The reading is above the series’ 12-month trailing average of 14.3%. The increase was broad-based across age and education groups. The mean probability of leaving one’s job voluntarily, or the expected quit rate, in the next 12 months decreased by 0.2 percentage point to 17.5%.That last one is the most worrisome but it should speak to lower wage demand as well, something that should allow the Fed to cut rates more deeply. Along those lines, "Median one-year-ahead earnings growth expectations decreased by 0.1 percentage point to 2.5% in December, remaining below its 12-month trailing average of 2.7%. The series has been moving within the 2.4% to 3.0% range since May 2021." This article was written by Adam Button at investinglive.com.

Prior was +0.5%Wholesale trade sales -0.4% vs -0.2% expIt's not clear whether we will get the Atlanta Fed GDPNow tracker but there should be a big rise in the Q4 data due to strong trade numbers earlier. This reading will be a small drag but it was mostly priced in.The US wholesale inventories report is a monthly economic indicator published by the US Census Bureau that measures the dollar value of goods held by merchant wholesalers at the end of each month. These firms operate between manufacturers and retailers, selling goods to businesses, institutions, and other wholesalers. The data are drawn from the Monthly Wholesale Trade Survey and include inventory levels, monthly sales, and the inventories-to-sales ratio.Wholesale inventories are closely watched because they provide insight into supply-chain conditions and demand expectations. Rising inventories can reflect confidence in future sales and intentional stock-building, but they can also signal slowing demand if goods are accumulating unsold. Falling inventories may indicate strong sales, cautious ordering, or deliberate destocking. As a result, the report is often interpreted alongside retail sales and manufacturing data to gauge broader economic momentum.The report plays a direct role in GDP through the change in private inventories component. GDP measures production, not final sales, so goods that are produced but placed into inventory add to GDP in the period they are made. Conversely, inventory drawdowns subtract from GDP even if end demand is strong. Wholesale inventories therefore can meaningfully boost or drag quarterly GDP growth, sometimes obscuring the underlying demand trend.Markets also focus on the inventories-to-sales ratio, which helps assess whether inventory levels are sustainable or likely to lead to future production adjustments. This article was written by Adam Button at investinglive.com.

Sector OverviewToday's market landscape reveals a mixed bag of performances across various sectors. The technology sector, led by giants like Microsoft (MSFT) and Oracle (ORCL), showed slight losses, with MSFT down 0.23% and ORCL slipping by 1.33%. In contrast, the semiconductor industry also faced a challenging day, highlighted by a 0.10% decline in Nvidia (NVDA), while Micron (MU) managed a positive tick up of 0.66%.Meanwhile, the consumer cyclical sector presented a brighter picture with Amazon (AMZN) climbing 0.94%, indicating positive sentiment in internet retail. However, Tesla (TSLA) dipped by 1.39%, reflecting investor caution in the auto manufacturing space.Big Winners and LosersThe standout performers included GOOG in the communication services sector, which surged by 1.34%, suggesting robust investor confidence in internet services. In contrast, Walmart (WMT) in the consumer defensive sector dropped by 1.95%, making it one of the day's notable laggards within discount stores.The industrials sector saw gains with General Electric (GE) enjoying a 1.79% upswing, bolstered by positive developments in aerospace and defense.Market Mood and TrendsThe overall market sentiment today appeared cautious yet optimistic in certain sectors. Despite challenges faced in technology and consumer electronics, as evidenced by Apple's (AAPL) 1.33% slide, healthcare stocks offered a beacon of resilience. Eli Lilly (LLY) rose by 0.97%, and Merck (MRK) experienced a significant 2.34% rise, underpinning a positive narrative for drug manufacturers.Additionally, escalating concerns in the consumer defensive sector were highlighted by dips in major players like Coca-Cola (KO), which edged down 0.01%.Strategic RecommendationsAs the markets oscillate, investors should maintain vigilance in monitoring tech stocks, especially those within semiconductors, for potential recovery signals. Diversifying into sectors demonstrating strength such as healthcare may serve as a buffer against ongoing volatility.Today's significant moves by companies like GE and MRK showcase sectors worth watching, while cautious approaches might be advisable for stocks facing headwinds like TSLA and AAPL.Overall, staying informed with real-time data and maintaining a diversified portfolio could be vital for navigating these fluctuating markets. For more insights and up-to-date analyses, be sure to visit InvestingLive.com. ? This article was written by Itai Levitan at investinglive.com.

The US dollar reaction immediately after the October trade data was tepid, with about 10 pips of gains in USD/JPY but that's since stretched to 35 pips.As I highlighted with the data, the trade beat will lead directly to higher GDP forecasts for the fourth quarter. The clearest example of that will be in the Atlanta Fed GDPNow forecast later but Fitch Ratings has revised US growth forecasts upward: - 2025 GDP growth now estimated at 2.1%versus 1.8% previously- 2026 growth forecast set at 2.0% versus 1.9% previouslyThose aren't exactly "pile into US dollars" numbers but they're a step in the right direction. Note though that the market has been backing away from near-term Fed rate cuts. The odds of a January move are now below 10% and March has fallen from 65% at the start of the year to 43% currently. Part of that is because of the solid ADP number yesterday along with a strong ISM services survey.Fitch said:Buoyant equity markets are supporting consumer spending which grew by 0.9% in 3Q25. Consumption has held up surprisingly well despite a slowdown in real household income growth through 2025 as employment growth has weakened. The saving ratio fell from 5.1% of income in January 2025 to 4.0% in September.A big factor will be tomorrow's non-farm payrolls report. The consensus is +60K but the market might be sniffing out some upside risks. Also keep an eye on the unemployment rate, which is forecast to tick down to 4.5% from 4.6%.Eyes will also be on the US Supreme Court at 10 am ET on Friday as they've scheduled a 'decision day'. The decision that markets are looking out for is on Trump's tariffs. If they're struck down and tariffs refunded, you could see some big market moves in the aftermath.As for the US dollar, USD/JPY is the main axis of strength so far but there is a broader USD move with EUR/USD now down 15 pips on the day and at a session low. Cable is also trading down 36 pips to 1.3421. This article was written by Adam Button at investinglive.com.

USD trading quietly as FX volatility compresses sharplyThe USD is little changed on the day, with price action defined by very narrow, two-way trading ranges across the major currency pairs. Volatility has been squeezed to unusually low levels. The EURUSD is confined to just a 14-pip range, the GBPUSD has traded only 33 pips, and the USDJPY range is limited to about 50 pips. Each of these ranges is less than half of the average daily movement seen over the past month, highlighting a market that is consolidating rather than trending. Buyers and sellers continue to battle for control, but for now no side has been able to establish a decisive edge.Tight FX ranges signal a coming breakout opportunityWhen markets compress like this, the trader’s job is not to force trades, but to identify the tilt—the subtle directional bias—and be prepared for the inevitable expansion in volatility. Ranges do not stay tight forever. The run will come, and when it does, preparation matters more than prediction. In the video above, I take a **technical look at the three major currency pairs—EURUSD, USDJPY, and GBPUSD—**with a focus on the directional bias, the risk to that bias, and the key downside or upside targets should momentum begin to follow through.US stock futures lower as yields push higherIn broader markets, U.S. equity futures are lower in premarket trading, while Treasury yields are moving higher, a combination that continues to pressure risk assets. Futures are currently implying a Dow Jones Industrial Average decline of about 162 points, with the S&P 500 lower by roughly 5 points and the NASDAQ down close to 28 points. Rising yields remain a headwind for equities and are helping to cap risk appetite as traders await clearer macro catalysts.Defense stocks gain after Trump comments on production and buybacksDefense-related stocks are firmer in premarket trade after Donald Trump warned defense contractors that capital should be directed toward increasing production capacity rather than buybacks or returning cash to shareholders. The comments reinforce a broader policy message that defense spending—both in the U.S. and overseas—remains a key growth priority, and the sector is responding accordingly.Treasury yields rise across the curveIn the U.S. debt market, yields are higher across the curve, reflecting ongoing sensitivity to growth, inflation, and policy expectations. The 2-year yield is at 3.401% (+1.3 bps), the 5-year yield at 3.720% (+2.6 bps), the 10-year yield at 4.169% (+3.1 bps), and the 30-year yield near 4.50% (+3.6 bps). The move higher in yields continues to support the dollar structurally, even as FX spot prices remain range-bound.Commodities and metals under pressure as yields riseAcross commodities and crypto, price action is mixed. Crude oil is higher by about $0.89, lifting prices back toward the $56 area, while precious metals are under pressure. Gold is lower by roughly $24, and silver is sharply weaker—down about $3.43, or -4.4%, near $74.73. The selloff in metals aligns with higher yields and highlights continued sensitivity to real-rate dynamics.Market outlook: compressed volatility favors patience and preparationOverall, markets remain in wait-and-see mode, with volatility compressed, positioning cautious, and traders focused on levels rather than momentum. These conditions often precede meaningful moves. The key is to stay disciplined, respect risk, and be ready when the market finally chooses a direction.Bitcoin is trading down $1400 at $89,872. This article was written by Greg Michalowski at investinglive.com.

Initial Jobless Claims (week ending Jan 3)Initial claims: 208K, +8K vs last week (prior week revised up to 200K)Weekly revision: Last week revised +1K (199K → 200K)4-week moving average: 211.8K, -7.3K vs prior weekNotable: Lowest 4-week average since April 27, 2024, reinforcing underlying labor-market firmnessContinuing Jobless Claims (week ending Dec 27)Continuing claims: 1.914M, +56K vs last week (prior week revised down to 1.858M)Weekly revision: Last week revised -8K (1.866M → 1.858M)Insured unemployment rate: 1.2%, unchanged vs last week4-week moving average: 1.893M, +21K vs prior weekTrend: Gradual upward drift in continuing claims, but no sign of sharp labor-market deteriorationBottom-line takeawayInitial claims remain low and stable, with the 4-week average falling to cycle lows, signaling limited new layoffs.Continuing claims are edging higher, suggesting slightly longer unemployment durations, but levels remain historically contained—consistent with a cooling, not cracking, labor market.Initial jobless claims track the weekly number of Americans filing for unemployment benefits for the first time and are one of the most timely indicators of U.S. labor-market health and overall economic momentum. Rising claims can signal increasing job losses and a slowing economy, while declining claims suggest that hiring is outpacing layoffs, pointing to underlying economic strength. Released every Thursday by the U.S. Department of Labor, the report is closely watched by economists and markets alike, with particular emphasis on the four-week moving average, which helps smooth out weekly volatility and provides a clearer view of underlying labor-market trends. This article was written by Greg Michalowski at investinglive.com.

Prior was a deficit of $52.8B (revised to -48.1B)Goods trade balance -58.57B vs -77.69B priorYou will see some big Q3 GDP forecast upgrades with this data. This is the payback from the front-run early in the year and it came in stronger than economists forecast. That led to about a 10 pip rise in USD/JPY as the market looks beyond the gyrations of 2025 and tries to assess the path of the economy in 2026.We also got the Q3 US productivity report and it was a big beat with productivity up 4.9% compared to 3.0% expected. The prior quarter was also revised to 4.1% from 2.4%. Unit labor costs fell 1.9% compared to +1.0% expected.Productivity is particularly tough to measure but this is undoubtedly good news and -- if sustained -- it would argue for lower rates even in an accelerating economy. AI is likely only a fraction of this gain but the promise of AI is that we could consistently see numbers like this. The problem is that it might come from layoffs and eventually you need consumers to have money in a consumer-driven economy.Canadian trade balance for October:Balance -0.58B vs -1.36B expectedExports 65.61B vs 64.23B priorImports 66.19B vs 64.08B priorExports +3.4% Imports +2.1%This is a good sign for Canadian trade despite the uncertainty around the USMCA agreement. A big tailwind for Canadian trade in 2025 was gold exports and they rose 2.1% in October after a 6.7% rise in September. That's helped to offset falling oil exports due to dropping oil prices. Manufacturing also got some good news as exports of motor vehicles and parts rose 4.1% in October.Canada's trade surplus with the United States narrowed from $8.4 billion in September to $4.8 billion in October.These numbers were all badly delayed by the US government shutdown. This article was written by Adam Button at investinglive.com.

80% of your job is to follow the central banks. They have an enormous influence on financial markets, and I would say they are responsible for most of market moves. A central bank can single handedly trigger or end a recession. When trying to know how an economy is performing, lots of new traders immediately go to check the economy's indicators like GDP, unemployment, inflation and so on. That’s the wrong way of doing it. You should look for the latest central bank decision and read the statement and economic forecasts. A central bank has an enormous amount of data and information about its economy. They gather information even from companies, institutional investors and so on.The central banks will tell you what they are focused on. For example, in the RBNZ (Reserve Bank of New Zealand) August 2025 statement, the central bank said “further data on the speed of New Zealand’s economic recovery will influence the future path of the OCR (Official Cash Rate)”. In the minutes they added “a key judgement for the Committee’s economic assessment was the extent to which spare capacity in the New Zealand economy is likely to persist”. They were focused on growth, so the GDP data was important for them. In their forecasts, they expected a -0.3% contraction in Q2. When the Q2 GDP report got released, the data showed a much bigger contraction at -0.9%, so there was much more “space capacity” than they forecasted. The market responded immediately by pricing in more aggressive rate cuts from the RBNZ and the New Zealand Dollar sold off across the board.This is just an example of how knowing what the central bank is focused on and knowing their forecasts can offer incredible trading opportunities. Of course, if the GDP report would have come out much better than expected, the NZD wouldn’t have sold off like that. It’s not just about reading their statements and forecasts though. Central bank members also give public speeches between their policy meetings, and sometimes they can say something new that changes expectations.For example, if a central bank member who’s been supporting keeping interest rates steady for months says that current interest rates are fine, it’s not new information. It’s still news, but it’s not “new news”, so it doesn't change expectations. On the other hand, if the central banker suddenly changes his/her mind and starts supporting a rate cut or a rate hike, then that’s new information and the markets will move on that. Markets basically price and reprice expectations. To give you a practical example of this, back in June 2025 we got a change in stance from a Fed governor. Fed’s Bowman has been a hawkish voter for a long time but then she suddenly delivered dovish comments and even opened the door for a rate cut in July. If she had delivered the usual hawkish comments, the market wouldn't have cared because it would have been known information. But she completely changed her stance going from hawkish to dovish.That new information changed expectations and markets started to price in higher chances of a rate cut in July. Her comments weakened the US dollar for days. Just a few days earlier, we got Fed's Waller delivering dovish comments, but since he's been a known dove for months, his comments weren't as market-moving as Bowman's because it was "old news".As you can see, central banks impact the FX market in a major way but their influence isn't limited to currencies. They influence interest rates (bond market) which in turn influence growth (stock market) and inflation (commodities). Markets are interconnected and as a BlackRock study found out, 90% of all asset classes returns are driven by growth, inflation and interest rates.Let's see a recent example with the FTSE 100, the UK stock market index. Last month, the UK CPI report came out much lower than expected. The FTSE 100 rallied strongly following the data release not because of lower inflation per se, but because of the expected change in BoE's (Bank of England) monetary policy.In fact, traders expected the BoE to sound more dovish and increased the rate cut bets for 2026. A more dovish central bank is generally good for the stock market because it increases economic activity and helps with growth, which is the ultimate driver of companies returns.That's also how you filter the tradable economic data from the hundreds of reports coming out every month. 90% of the data is meaningless for the market, it's the 10% that can change the next central bank move that matters. This article was written by Giuseppe Dellamotta at investinglive.com.

Headlines:An early test for gold and silver ahead of the main event tomorrowUS non-farm payrolls distortion to carry over to December report tomorrow?USDJPY remains confined in a range: traders eye US NFP tomorrow for key breakoutsTrump says that US oversight of Venezuela could stay on for yearsNvidia to require full upfront payment from Chinese clients for H200 chips - reportUS job cuts fall to 17-month low to round off the final month of 2025Switzerland December CPI +0.1% vs +0.1% y/y expectedEurozone November PPI +0.5% vs +0.2% m/m expectedGermany November industrial orders +5.6% vs -1.0% m/m expectedUK December Halifax house prices -0.6% vs +0.2% m/m expectedChinese yuan bets looking more favoured as we get into the new yearMarkets:USD steady, AUD and NZD lag on the dayEuropean equities lower; S&P 500 futures down 0.2%US 10-year yields up 2.3 bps to 4.161%Gold down 0.7% to $4,422.59WTI crude oil up 1.4% to $56.81Bitcoin down 1.5% to $89,700As the market focus turns towards the US labour market report tomorrow, traders are taking some caution and a bit of a breather from the early moves to start the year. Equities were more tepid after the drop in Wall Street yesterday while precious metals continue to pull back as bets are taken off the table before the main event on Friday.In FX, the dollar is keeping steadier and mostly little changed across the board. EUR/USD lacked appetite in a 13-pip trading range and is keeping flat at 1.1673 on the day. USD/JPY also barely budged as it is keeping flattish at 156.67 at the moment. The only notable movers were the antipodes with AUD/USD down 0.4% to 0.6695 and NZD/USD down 0.4% to 0.5745 amid the more sluggish risk mood.European indices are keeping a little lower with the DAX also now turning negative after a more hopeful start. The German benchmark index pushed for record highs again but the momentum eventually fizzled with US futures also keeping slightly lower at the balance. S&P 500 futures are down 0.2% with Nasdaq futures down 0.3% on the day.Trump touting that the US could stay in Venezuela for years and Nvidia continuing to tussle with Beijing are two notable headlines we got during the session. That apart from US layoffs easing in December but the 2025 picture marks the worst year in terms of job cuts since the Covid pandemic.Meanwhile, precious metals continue to be in the spotlight with gold and silver running lower and dropping to test key near-term levels as highlighted in the linked post. It's an early test before we get to the US labour market report tomorrow with a potential pullback on the cards.Gold dipped to a low of $4,408 in the past hour before a light bounce to $4,422 with silver just hovering off its lows and down nearly 4% to $75.07 currently. Danger, danger. When something becomes too heavy of a consensus, just be wary that pullbacks can be sharp and volatile. This article was written by Justin Low at investinglive.com.