Two things are hitting at once and they're surely related. The first is from an unnamed US official quoted by Reuters but it came simultaneously with a White House statement saying:Trump has made clear that acquiring Greenland is a 'national security priority'Trump would like to acquire Greenland during his termTrump and advisors discussing options including purchasing it from Denmark or forming a compact of free associationUtilizing the military is always an optionThat last one is the real kicker. What a bizarre saga this is, straight mafia stuff. Anything untoward or violent would certainly force the EU to go from 'strong levels of concern' to actual repercussions, if only on trade. This article was written by Adam Button at investinglive.com.

Some time in the not-too-distant future, markets are going to be hit with headlines about the US Supreme Court on tariffs.Technically, they have until late-June to rule but because this was an expedited hearing, that's likely to come much sooner. It was looking like the earliest option would be the week of January 19 based on the Court's schedule but today that scheduled changed. Friday has been announced as a 'decision day'. This is how the court usually operates. There is a 1-3 day 'heads up' that a decision is coming but no indication of which cases will be decided. It could be tariffs or a myriad of other cases before the court. We will have to be ready for until it's announced, which is usually at 10 am ET.Arguments in early November suggested the court was skeptical that Trump had authority to impose the tariffs under a 1977 law. Kalshi pegs the odds at 70/30 that tariffs are struck down so that's a good guide on what's priced in but the stakes are high.Some trades to consider on both sides of the decision:1) Import-heavy retailers (gross margin relief + fewer price hikes)XRT, COST, WMT, TGT, AMZN, BBY2) Apparel & footwear (sourcing-heavy, high sensitivity to landed costs)NKE, GAP, RL3) Consumer discretionary factor (tax-cut-like effect for goods)XL, FIV, ELF 4) Housing / “stuff in the house” supply chain (materials + fixtures + appliances)ITB, LEN, W, RH5) Downstream manufacturers (big metal users; tariffs are a cost)CAT, DE, PCAR, ETN6) Autos & cross-border supply chains (North America / global OEMs)GM, F, TM7) USMCA currenciesYou can buy MXN or CAD or the country ETFs EWW (Mexico), EWC (Canada)If tariffs are upheld, you could see a benefit in the steel names but those are protected under separate Section 232 tariffs that aren't at risk from the Supreme Court, so I would buy a dip in steel names at some point (maybe not right after the decision). It's similar for aluminum.I also believe that one of the cleanest trades on the tariff ruling is gold as it should weaken if tariffs are blocked and pop if they're upheld.Some names that could do well if tariffs are upheld1. Reshoring / factory build-out / industrial capex (picks-and-shovels)XLI, FLR, PWR, J, ROK, PH2. Inflation/uncertainty hedges (if tariffs = higher prices + noisier growth)XLE (energy as hedge)GDX (gold miners as uncertainty/stagflation hedge)3. Bonds as uncertainty risesIf the Supreme Court supports fentanyl tariffs as a national emergency, what else might they support?I would also keep a very close eye on the above names in the lead-up to Friday because everything leaks lately and it's open season on insider trading.There is plenty of nuance at stake about whether the Supreme Court leaves other paths open and whether tariffs are refunded (unlikely) but it's something to think about for the next two days. This article was written by Adam Button at investinglive.com.

Could today be the pivot we’ve been waiting for?The big news out of Ukraine meetings in Paris is that the US appears to be supporting security guarantees for Ukraine with its military. The four-year anniversary of the war is Feb 24 and hopefully we can get a ceasefire before then.The headlines crossing the wires from Paris today are painting an increasingly constructive picture. While markets have learned to be skeptical of geopolitical headlines, the coordination displayed today by the "Coalition of the Willing" feels substantial.The meeting between Zelenskiy, Macron, Starmer, and US envoys has produced a "Declaration of Paris," and for investors, the details regarding security guarantees are the key takeaway.Here is a look at why today’s news matters for the risk outlook.1. Clarity on US Involvement One of the persistent market fears has been the ambiguity of U.S. support in a post-conflict scenario. Today offered some necessary clarity. Macron’s comments on a "US backstop" and Envoy Witkoff’s statement that they are prepared to "do anything necessary" suggest a firmer commitment than previously. 2. RebuildingReconstruction is a major theme in the headlines. The discussion of a "prosperity agreement" linked directly to security protocols is significant. It signals that the West is looking to anchor peace through economic integration. For European markets, this is a potentially strong signal for future growth, though the timeline remains an open question.3. "Hardest Yards" Still Ahead It is important to keep the optimism in check. PM Starmer rightly noted that the "hardest yards are still ahead," and Zelenskiy acknowledged that "territorial issues" were discussed—likely the most difficult part of any negotiation. However, agreeing on a legal framework for security guarantees is a necessary precondition for those difficult talks to proceed. It’s a milestone, even if it’s not yet the finish line.The market has been gradually pricing out extreme geopolitical risks and I wonder if peace is already priced in but there are some clear trades if not:EUR/USD: The euro stands to benefit from any reduction in regional instability and it was the top performer last year after years of struggles. A credible path to peace removes a significant structural drag on the currency.European Equities: Stability is the primary requirement for capital flows. If these security guarantees look durable, it improves the long-term case for European assets, particularly in sectors tied to infrastructure and reconstruction.Gold: If the geopolitical temperature lowers significantly, the safe-haven premium in gold could face some headwinds, though this will likely be a slow grind rather than a sudden drop. Then again, one war ending just puts the superpowers on course for a different one in a world that's increasingly unmoored. This article was written by Adam Button at investinglive.com.

If you felt like a genius trader between 2020 and 2025, Rick Rieder has a reality check: You were walking through a casino where every table was paying out.In his latest note looking ahead to 2026, BlackRock's CIO of Global Fixed Income (and Fed chair candidate) argues that the "set it and forget it" beta trade is dead. In the last cycle, 90% of S&P companies had positive returns. As 2025 wrapped up, 40% of the index had a negative year.Rieder says 2026 is going to be about "investing, not gambling." Here are the key takeaways from his outlook.1. Inflation is yesterday's war. The new worry is Labor. Rieder says the inflation storm has passed. He notes that shelter inflation has moderated and core volatility is back to 1990-2020 norms. He isn't worried about a tariff spiral either, calling it a one-time level shock rather than a persistent driver.The real headache for 2026? The labor market.Underlying slack is moving the wrong way.Layoffs are now about "efficiency" (cost-cutting) rather than cyclical weakness.Healthcare hiring has been masking weakness everywhere else. Excluding healthcare, job growth is negative.With wage growth rolling over and hiring downshifting, Rieder argues the Fed needs to move away from restrictive policy to avoid "unnecessary damage."2. The AI story is shifting from Revenue to Margins This is the most interesting part of the note. Rieder argues that we are moving into a phase where AI is a cost-cutting revolution. Corporates are explicitly using tech to reduce headcount. He drops some massive back-of-the-napkin math here:"If AI can reduce labor’s share of corporate costs by even 5%... that would generate roughly $1.2 trillion in annual labor cost savings."He estimates the present value of those corporate savings at $82 trillion. The trade here isn't just buying the companies selling the chips; it's buying the companies that use the tech to ruthlessly cut costs and expand margins, something we've long argued is the killer app of AI.3. The 2026 Macro Regime: "Dispersion" We are looking at a year of 2% real growth (thanks to AI capex), but with a much higher cost of capital. Rieder warns that this environment re-introduces idiosyncratic risk. You are going to see more defaults and downgrades even if the headline GDP looks fine. This is the end of the rising tide lifting all boats.Reider is looking for durable income to survive the air pockets.Quality Fixed Income: He likes investment grade and is specifically looking at mortgages and securitized assets for yield pickup over Treasuries.Tactical Credit: He’s looking to buy the dip when heavy supply hits the market (specifically from hyperscalers and infrastructure issuers).Select High Yield: Avoid the junk. Stick to strong balance sheets.EM Debt: He sees value here as a diversifier, noting some EM central banks are ahead of the curve on cutting rates.Equities: Focus on the "right side" of the AI cost revolution. Companies with durable cash flows that are actually using AI to fix their margins, not just saying "AI" on the earnings call.The bottom line Rieder’s message is clear: The era of easy beta is over. 2026 is about selectivity, patience, and letting the compounding of high-quality income do the heavy lifting.So far, 2026 looks like easy money with the S&P 500 up another 0.6% today but the party could soon end. This article was written by Adam Button at investinglive.com.

Amazon frustrated investors last year.There are obvious synergies between Amazon and AI and AWS is also a big beneficiary of AI spending. Despite that, shares were virtually flat in 2025.That could be changing. Shares are up 3.49% today and more than 4% this year. That's bumped them to the highest since November 11 but it's been the speed of the move that matters as investors seem to be piling in.The risk is that this is more smoke and mirrors than fundamentals. The rise in shares could be hedge fund rebalancing in tech or the Mag7.Advertising revenue is forecast to hit $80-$85 billion in 2026. Crucially, this revenue carries 50%+ operating margins. As ad revenue grows faster than the core retail business (20% vs. 8%), it naturally drags the overall corporate margin higher.After slowing in '24/'25, AWS revenue growth is projected to hit 30%+ in 2026. The massive infrastructure buildout (doubling power capacity) is finally meeting the backlog of AI workloads moving from "training" to "inference." As these high-compute workloads scale, operating leverage in the cloud segment returns.The buzz word so far this year is 'physical AI' with the leaders of Nvidia and AMD touting it in early 2026. Who could benefit more than Amazon? If they can use robotics rather than people to fulfill orders, then the retail margins could explode. The company hopes to cut $0.30 off each package by 2027, which would be huge for the bottom line.It's trading at 30x the 2026 consensus of $8.10 and 24.5x the 2027 consensus of $9.80. That compares to a five-year average of 55x and a 10-year average of 75x. Obviously, there has to be some slowdown when a company gets as big as Amazon but it's a ubiquitous company that's built an incredible shipping and logistics moat.A re-rate to 35x takes it to $283/share.The drag might be capex as the company spent $125B and plans to spend $130B this year. We have seen this before where skeptics lean in during these periods followed by huge returns on investments like Prime and AWS.Another smart move the company made was a series of forays into AI with a 2023 purchase of up to $4 billion in Anthropic followed by a second investment in November 2024. It's not clear how much of the company that netted by Anthropic has been executing to rave reviews, particularly with coders. The investment is probably a big winner already (they might own 15-20% of it) but it also shows that Amazon is skating to where the puck will be in AI.Overall, AWS revenue growth has re-accelerated to 30%+, advertising is now an $80B+ high-margin juggernaut, and retail margins are stabilizing with big upside from 'physical AI'. This article was written by Adam Button at investinglive.com.

I was in the studio at BNN Bloomberg to kick off the first trading week of 2026 to discuss the outlook for the Canadian dollar, the surprising resilience of the Canadian consumer, and the massive political risks lurking in the US.The loonie managed a 5% gain in 2025 despite terrible sentiment, but looking ahead, the narrative is going to be dominated by trade headlines. Watch the segment here or read below:The big theme for 2026: Noise vs. Signal on Trade The USMCA renegotiation is the elephant in the room. We know the pattern with Donald Trump by now: he likes to throw a hand grenade into negotiations to throw everyone off balance. We saw it with steel and aluminum recently—deal at the finish line, then back to the start.However, the base case remains that the US wants to stay in the agreement. The market is slowly figuring out that there is what Trump says and what he does. The danger is that uncertainty is worse than a bad deal. There is a dam of investment dollars waiting to go to work in Canada that is currently held back by this uncertainty.The US Supreme Court Wildcard A massive macro catalyst to watch in January or February is the US Supreme Court decision on presidential tariff powers.The Bullish Case: If SCOTUS limits the tariff power, it restores faith in US checks and balances. You can hold US dollars again.The Bearish Case: If they rubber-stamp the tariffs, the US political situation looks increasingly untenable. If we lose those checks and balances, we could see gold double from here.Canadian Resilience & The "New Government" Domestically, the story is better than the headlines. The Canadian consumer kept spending in 2025 despite the housing wobbles. With a new, more commodity-positive government in Ottawa and oil likely bottoming out this year, the investment landscape for Canada looks stable compared to the political chaos in the US and UK.Key takeaways from the interview:USMCA: Expect noise and threats, but a full breakup of the deal is unlikely.Housing: We are seeing a soft floor. Bank stocks rallied in H2 2025, pricing in a recovery rather than a collapse.Gold vs USD: The US dollar was the worst-performing major currency of 2025. Unless the US political ship steadies (starting with the SCOTUS decision), gold remains the ultimate hedge.More in the full segment. This article was written by Adam Button at investinglive.com.

Silver was the commodity darling of 2025 and the squeeze higher is continuing this year. Prices are up 5% today and above $80 for only the second time ever.The first rise above $80 came on Boxing Day in low liquidity and quickly faded. This foray higher is coming in New York/European hours with desks fully staffed. That's a strong indication of underlying interest and continued backing from retail flows.Notably, precious metals have a strong seasonal pattern in Dec/Jan, something I've been writing about for 15 years. With silver up 5% today, gold is also up 0.5% or $23 to $4471 after hitting as high as $4490. We are likely seeing some profit taking ahead of $4500.The rally in precious metals this week has been helped by the seizure of Venezuelan President Nicolas Maduro by the Trump administration. That alone probably isn't responsible for the tailwinds but it was followed by administration officials talking about Colombia, Mexico, Cuba and Iran.Greenland is also back on the agenda as the President talks about annexing the island despite it being part of NATO and Denmark.Trump henchman Stephen Miller is out today with this line: "We live in a world...that is governed by strength, that is governed by force, that is governed by power. These are the iron laws of the world since the beginning of time.”The US dollar's foundation in the rule of law but with comments like this, you might want to hold something that's been valuable 'since the beginning of time' in the form of gold and silver.I expect reserve managers to increasingly turn away from the US dollar and turn towards gold. Denmark holds a large portion of its FX reserves in US dollars and I would be wary of the US using those as leverage in a hostile negotiation (or fight) over Greenland. This article was written by Adam Button at investinglive.com.

The US stock market displayed a mixed yet intriguing performance today, as reflected in the heatmap. Notable movements include the technology and healthcare sectors climbing, while consumer cyclicals faced setbacks.? Tech and Semiconductor GainsNVIDIA (NVDA) leads the technology sector with a robust 1.20% increase, bolstered by optimism around AI advancements.Micron Technology (MU) also surged 4.40%, suggesting investor confidence in semiconductor demand.Meanwhile, Microsoft (MSFT) experienced a modest rise of 0.21%, reflecting sustained interest in cloud services.? Healthcare's ResilienceUnitedHealth (UNH) recorded a notable increase of 1.97%, driven by positive quarterly earnings.AbbVie (ABBV) also saw a rise of 1.13%, highlighting steady demand in pharmaceuticals.? Consumer Cyclical and Communication SetbacksTesla (TSLA) faced a significant decline of 2.09%, attributed to concerns over production delays and market saturation.Adobe (ADBE) slipped 0.84% amid fears of decelerating growth in creative software.In communication services, Netflix (NFLX) fell 0.79%, as competition in streaming intensifies.? Overall Market TrendsThe market sentiment appears cautiously optimistic, supported by gains in tech and healthcare.Concerns linger in consumer cyclicals and entertainment, impacting stocks like TSLA and NFLX.Investors are advised to monitor tech, particularly semiconductors, for potential growth opportunities, while watching for any adverse economic indicators from consumer sectors.This dynamic environment calls for vigilance and strategic adjustments in portfolios. Traders might consider diversifying into stable sectors such as healthcare, while keeping an eye on tech innovations for substantial returns. As always, stay informed with real-time market insights to navigate these evolving trends effectively. This article was written by Itai Levitan at investinglive.com.

Prelim was 52.9Prior was 54.1Composite PMI 52.7 vs 53.0 prelim (54.1 priorBusiness activity growth slowed to an eight-month low of 52.5 in December. New business inflows at a 20-month low Employment volumes stagnated, ending a nine-month sequence of continuous growth. Input price inflation accelerated to a seven-month high due to tariffs. Service providers raised selling prices at a quicker pace to offset costs. Confidence in the outlook weakened amid uncertainty over tariffs and policy.Chris Williamson, Chief Business Economist at S&P Global Market Intelligence: "Business activity continued to expand in December, rounding off another quarter of robust growth, but the resilience of the US economy is showing signs of cracking. New business placed at services providers showed the smallest rise in some 20 months which, accompanied by the first fall in orders placed at manufacturers for a year, points to a broad-based weakening of demand growth. "Not only has service sector business activity slowed in response to concerns over order books, with the December surveys signaling the weakest economic expansion since last April, but the number of companies cutting headcounts has exceeded those reporting higher employment for the first time since February. "We also enter 2026 with future output expectations running much lower than seen at the start of 2025, fueling concerns that December’s slowdown and job market malaise could spill over into the new year. "Confidence has been dampened principally by uncertainty over government policy and the broader economic outlook, with tariffs and affordability featuring as common threads throughout companies’ more cautious views on their prospects. "These affordability worries are underscored by companies reporting an increased impact of tariffs on both input costs and selling prices in December, suggesting we could see the unwelcome combination of slower economic growth and stubbornly high inflation at the start of the new year. "However, there is an expectation among many companies that lower interest rates and government policy will start to boost demand again as the new year proceeds." This article was written by Adam Button at investinglive.com.

The memes are sending a signal. And it turns out, it’s a massive fade.Just when you thought you’d seen every possible sentiment indicator—from the AAII survey (which I like) to counting the word "recession" in the WSJ—along comes a team of researchers from Hong Kong and USC with a metric that actually sounds like it belongs in the post-2020 trading era: GIFsentiment.A new working paper titled "GIFfluence" digs into millions of posts on Stocktwits to see if those looping animations of rocket ships and crying bears actually predict price action.The verdict? They do. But not in the way the posters intended.The Gist: Visuals = Pure EmotionThe researchers argue that while text posts ("Buy $AAPL, earnings look good") often contain rational analysis, GIFs are pure "System 1" thinking—fast, emotional, and impulsive. They capture the raw mood of the retail crowd better than words ever could.To build their index, they looked at millions of GIFs posted between 2020 and 2024. They calibrated the sentiment by checking which GIFs were most often paired with a user's "Bullish" or "Bearish" self-declaration button.If users keep posting a specific GIF of Elon Musk smoking on a podcast while clicking "Bearish," the algorithm learns that GIF is a bearish signal.The study found that when GIFsentiment spikes (meaning everyone is spamming bullish rocket GIFs):Same Day: The S&P 500 tends to rise. The hype works in the immediate term.Four weeks later: The market is lower.The data shows that high GIF sentiment is a strong negative predictor of returns for the next four weeks. It’s essentially capturing peak exuberance.The numbers are actually pretty startling:A one-standard-deviation increase in GIF bullishness is associated with a 126.5 basis point drop in the S&P 500 over the following monthThat annualizes to a roughly -16% drag.The researchers say the correlation holds up after controlling for things like news and earnings but that sort of thing is very tough to do. They note that the signal is strongest in the highest-volatility stocks.Why it worksThe paper makes a compelling case that GIFs are a cleaner proxy for "investor mood" than text.GIFsentiment correlates strongly with "bad mood" days—like days with heavy cloud cover or strict COVID lockdowns.The argument is that when people are typing, they are reacting to news. When they are posting GIFs, they are reacting to vibes. And when the vibes get too hot, the market is vulnerable.Unsurprisingly, this indicator screams loudest in the corners of the market where retail traders hang out. The predictive power is significantly stronger in small-cap stocks and high idiosyncratic volatility names.If you see the small-cap boards lighting up with dancing bulls, be careful. This is something we've known for awhile but if you want to use this in your toolkit -- their GifIndex isn't published -- you should feel a bit of caution when you're seeing waves of bullish or bearish gifs.The bottom lineWe know retail sentiment is often a contrarian indicator, but this study puts some hard numbers on "meme euphoria."The researchers conclude that visual sentiment is a proxy for misperceptions that get corrected within a month. So next time your feed is flooded with "to the moon" animations, remember: the data says the rocket is likely running out of fuel.h/t @MKTWgoldstein This article was written by Adam Button at investinglive.com.

The USD is modestly higher as the NA session begins. The biggest movers are the GBPUSD and USDCHF with the USD showing gains of about 0.17% vs each. The EURUSD is lower after weaker inflation and Service PMI data. In the video above, I take a look at the 3 major currency pairs from a technical perspective and outline the key levels in play for your trading today and explain why they are important. What happened in Europe economically this morning. On the economic front in Europe today the CPI data today out of Germany and France showed that inflation is cooling faster than economists anticipated, which generally puts less pressure on the European Central Bank (ECB) to maintain high interest rates.German Prelim CPI (m/m): Worse than expectations (Lower inflation). The actual came in at 0.0%, missing the estimate of 0.3%.French Prelim CPI (m/m): Worse than expectations (Lower inflation). The actual was 0.1%, coming in under the 0.2% estimate.Purchasing Managers' Index (PMI) SummaryThe Services PMI data was mixed. While Spain saw a massive surge, the heavyweights (Italy, France, and the UK) saw their services sectors either lose momentum or perform worse than expected. Despite the slowdown all were still above the 50 level indicative of expansion. However, like the CPI, the data is congruent with the ECB tilting easier. Key TakeawaysSpain is the outlier: With a reading of 57.1, Spain is seeing robust growth in its services sector, far outstripping its neighbors.Widespread Momentum Loss: Excluding Spain and Germany, most of Europe saw service activity slow down more than forecasted, with Italy seeing the largest drop relative to expectations.Disinflation Trend: The lower-than-expected CPI figures in Germany and France suggest that the "inflation fight" is progressing well, which may shift market focus toward economic growth concerns rather than rising prices.Stocks are mixed to start the new day in the US. Yesterday’s trading session kicked off 2026 with a bang, and as we look at today's pre-market activity, the momentum is showing a slight divergence between the blue-chips and tech heavyweights.Morning Market SnapshotFollowing yesterday's record-breaking performance, the futures are currently signaling a mixed open:Dow Jones: Implied down -10 points (Consolidating after yesterday's record close).S&P 500: Implied up +4.5 points (Chasing a new milestone).Nasdaq: Implied up +57 points (Leading the morning gains).The Quest for RecordsWall Street is currently "record-hunting." Here is where the major indices stand relative to their all-time highs:While the Dow is sitting in uncharted territory, the Nasdaq still has the most ground to cover. It needs a rally of roughly 2.4% to reclaim its October 2025 peak.Market Movers & TrendsYesterday’s rally was largely fueled by Energy and Banking sectors, sparked by geopolitical shifts in Venezuela and optimism surrounding U.S. oil majors. Today, the focus seems to be shifting back toward Tech and AI.Pre-Market Gainers (Jan 6)Vistra Energy (VST): Up +4.49% as power demands for AI data centers continue to drive utility plays.Microchip (MCHP): Up +4.24% following positive sentiment in the semiconductor space.Alumis (ALMS): A massive standout, surging +81% after announcing successful Phase 3 trial results for its psoriasis drug.Micron (MU), Nvidia, AMD are all higher: Chip stocks are rebounding today with MU up 1.45%, Nvidia shares are up 0.80% helped by Jensen Huang's keynote address at CES 2026 announced that NVIDIA's next-generation "Vera Rubin" AI platform is in full production, promising five times the AI computing performance of the previous Blackwell chips. He also emphasized a shift toward "Physical AI," unveiling the Alpamayo open-source software and models designed to help autonomous vehicles and robots reason through complex, real-world situations. AMD is up 0.75% in premarket trading. Yesterday’s Leaders (Jan 5)In comparison, yesterday was all about "Old Economy" giants:Energy: Chevron (CVX +5.10%) and Halliburton (HAL +7.84%) saw significant gains following news of U.S. operations in Venezuela.Small Caps: The Russell 2000 outperformed the majors yesterday, jumping 1.6%, signaling a broad-based appetite for risk.Bond yields are modestly higher. Bond yields are broadly edging higher this morning as the market reacts to cooling European inflation and geopolitical headlines from Venezuela. The current moves reflect a bear-steepening of the yield curve, where longer-dated yields are rising slightly faster than short-term ones.Treasury Yield Summary (Jan 6, 2026)Yields are up across the board, with the 10-year and 30-year leading the modest climb.Market Context & ObservationsThe "Steepening" Curve: The spread between the 10-year and 2-year yield remains in positive territory at approximately 0.71%. This upward-sloping curve is generally seen as a sign of confidence in long-term economic resilience, despite immediate volatility.Impact of Geopolitics: Yields faced some downward pressure yesterday as the capture of Venezuelan leaders sparked a "safe-haven" bid for Treasuries, but that trend has reversed this morning as focus shifts back to domestic data.Rate Cut Odds: While yields are rising today, the market is still pricing in a roughly 25% probability of three quarter-point rate cuts by the Fed in 2026, though some analysts expect a pause at the first meeting of the year. This article was written by Greg Michalowski at investinglive.com.

Current rate within the range of neutralUpcoming rate decisions will need to be 'finely tuned' given risks to both unemployment and inflation goalsBoth sides of the mandate 'bear watching'Inflation has come down but remains above targetUnemployment remains low but do not want the job market to deteriorate much furtherLast year showed the economy's resilience, but demand and job growth are narrowly focused on certain industries, and sentiment has dippedExpect last year's confidence to diminish in 2026, building confidence among consumersThis reads as hawkish, or at least someone who is unsupportive of cuts unless jobs data deteriorates.Throughout late 2025, Richmond Fed President Thomas Barkin has emerged as a bellwether for the central bank’s cautious core, consistently highlighting the difficulty of navigating conflicting economic signals. By November, Barkin characterized policy as "modestly restrictive" but expressed deep uncertainty regarding the path forward, noting that the Fed is effectively "feeling its way through" a data-poor environment.Note the change from 'modestly restrictive' to 'within the range of neutral' today. There is no truly pinpointing where 'neutral' is so it's vague semantics at best but it's telling.Barkin’s commentary late last year revealed a tension: while inflation remains above target, he views it as unlikely to accelerate due to consumer "exhaustion" and productivity gains. Simultaneously, he has identified a "noticeable shift" in the labor market, observing that while job growth is slowing, the supply of applicants is rising. Downplaying the utility of long-term forecasts, Barkin argues that neither mandate currently demands an aggressive response. Consequently, he signaled that the decision for the December meeting was a coin toss. It's not clear if he supported it as he wasn't a voter in 2025 and won't be one in 2026.For this year, Barkin sounds like he sees an improved consumer and economy, something more likely to keep rates where they are.Market pricing pegs a March rate cut at 64%. This article was written by Adam Button at investinglive.com.

Prior +2.3%HICP +2.0% vs +2.2% y/y expectedPrior +2.6%Core CPI Y/Y 2.4% vs 2.7% priorFull report hereBig downside surprise in German inflation figures. We had the German states readings earlier in the session which pointed to softer national CPI. The Core CPI Y/Y fell to 2.4% in December vs 2.7% in November.The market reaction has been limited given that we already expected softer figures after the German states data. In terms of monetary policy, the data doesn't change anything for the ECB. The central bank is comfortably in neutral stance and has already stated many times that it won't react to small or short-term deviations from its 2% target.The market doesn't expect any policy move from the ECB this year with just 2 bps of tightening priced in by year-end.On the 1 hour chart above, we can see that EURUSD bounced following the German CPI data in what could be called a classic "buy the rumor, sell the fact" reaction. The price action has been confined between the support zone around the 1.1660 level and the downward trendline.The sellers will likely continue to lean on the trendline with a defined risk above it to keep pushing into new lows, while the buyers will need a break above the trendline to open the door for a rally into the 1.18 handle. This article was written by Giuseppe Dellamotta at investinglive.com.

ASX 200 braces for impact with Australia's CPI release: How is the market likely to react?AUDUSD Technical Analysis: Big day for Australia tomorrow with the inflation data releaseUK December final services PMI 51.4 vs 52.1 prelimGerman states see softer headline inflation readings in DecemberEurozone December final services PMI 52.4 vs 52.6 prelimGermany December final services PMI 52.7 vs 52.6 prelimFrance December final services PMI 50.1 vs 50.2 prelimItaly December services PMI 51.5 vs 54.0 expectedUSDJPY Technical Analysis: The focus turns to Japanese wage data, US NFPSpain December services PMI 57.1 vs 54.5 expectedFrance December preliminary CPI +0.8% vs +0.9% y/y expectedWhat are the main events for today?Japanese bonds selloff continues to run in the new yearFX option expiries for 6 January 10am New York cutThe main highlights of the session were the French and German states CPI readings. The data missed across the board but didn't really change anything for the ECB, which is widely expected to remain on hold for 2026. We had also the final PMI readings for the major Eurozone economies and the UK, and although the data was mixed, it leant on the slightly softer side.The US dollar recovered some of the losses seen yesterday after the soft US ISM Manufacturing PMI. The general price action is still cautious as we await the US NFP report on Friday and then the US CPI next week. The market pricing for the major central banks hasn't changed in the past couple of weeks as traders await the key data releases. In the equities space, the mood remains positive with most major stock indices seeing gains on the day. Precious metals remain well supported with gold up 0.35% and silver more than 2%. The upward momentum is still intact amid the Fed's dovish reaction function and the recent soft US data. US Treasuries, on the other hand, remain in the same old range since September with long-term rates seeing more upward pressure compared to short-term ones.We don't have much on the agenda in the American session, but from tomorrow we will start getting lots of important economic reports beginning with the Australian monthly CPI. This article was written by Giuseppe Dellamotta at investinglive.com.

KEY POINTS:Australia inflation data in focus tomorrowThe market is pricing 32% probability of a rate hike in February Total tightening expected in 2026 is around 42 bpsASX 200 is trading inside a rising channelSoft data is expected to trigger a rally, while hot figures will likely add more pressureFUNDAMENTAL OVERVIEWThe ASX 200 went into a meaningful drawdown back in November following the hot inflation data at the end of October. That triggered a hawkish repricing in interest rate expectations which were then followed by a more hawkish RBA decision. The central bank even discussed whether a rate hike might be needed at some point in 2026. The market is pricing a 32% probability of a rate hike at the upcoming meeting in February with a total of 43 bps of tightening seen by year-end. Tomorrow, we get the monthly Australian inflation data. Even though the RBA focuses more on the quarterly reports, traders will likely react to the monthly report. Given the hawkish expectations, a soft report will likely have a bigger impact on Australian assets. In such a case, we will likely see the ASX 200 rallying as the hawkish expectations fade. On the other hand, another hot report will likely weigh further on the stock market, potentially taking it back to November lows.ASX 200 TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that the ASX 200 (CFD contract) has been trading inside a rising channel. From a risk management perspective, the buyers will have a better risk to reward setup around the bottom trendline to position for a rally into new all-time highs, while the sellers will look for a break below the trendline to push the price back into the 8415 level.ASX 200 TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see that we have a downward trendline defining the pullback into the lower bound of the channel. If the price rallies into the downward trendline, we can expect the sellers to lean on it with a defined risk above it to position for a drop into the lower bound of the channel. The buyers, on the other hand, will want to see the price breaking higher to increase the bullish bets into the upper bound of the channel.ASX 200 TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can see that we have a minor support zone around the 8670 level. The buyers will likely continue to step in around this level with a defined risk below it to keep targeting the downward trendline, while the sellers will wait for a break lower to extend the drop into the bottom of the channel.UPCOMING CATALYSTSTomorrow we have the Australian monthly inflation data, the US ADP, the US ISM Services PMI and the US Job Openings data. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report. This article was written by Giuseppe Dellamotta at investinglive.com.

KEY POINTS:US dollar weakened after soft US ISM Manufacturing PMIMarket pricing for the Fed remained unchanged around 62 bps of easing expected by year-endUS NFP the main event this weekFor the AUD, inflation data tomorrow is keyGiven the hawkish expectations, a soft report will likely trigger bigger movesSoft data should weigh on the Australian dollar, while hot figures should keep supporting itThe market is pricing a 32% probability of an RBA hike in February and a total of 42 bps of tightening by year-endFUNDAMENTAL OVERVIEWUSD:The US dollar weakened across the board yesterday following a soft US ISM Manufacturing PMI. The data wasn’t really surprising, but after a strong rally in the European session, the greenback gave back all the gains. In terms of macro, nothing has changed in these two weeks. The latest NFP and CPI reports came both on the softer side and the market is still pricing 62 bps of easing by year-end. The data in December was taken with a pinch of salt given the shutdown related issues, but the next releases will give us a clearer picture. The market expects the Fed to cut in March at the earliest, so we will need very soft data this month to force them to act sooner. Nonetheless, if the data continues to come in on the softer side, the market will likely increase the total easing for 2026 and that should weigh on the US dollar.On the other hand, if the data shows strength, traders will likely pare back their rate cut bets and that will likely offer the greenback some support.AUD:On the AUD side, the RBA at the last policy decision sounded more hawkish following a series of higher-than-expected inflation reports. The central bank also discussed whether a rate hike might be needed at some point in 2026. The market is pricing a 32% probability of a rate hike at the upcoming meeting in February with a total of 43 bps of tightening seen by year-end. Tomorrow, we get the monthly Australian inflation data. Even though the RBA focuses more on the quarterly reports, traders will likely take clues from the monthly report. That should influence rates expectations and impact the Australian dollar. Given the hawkish expectations, a soft report will likely have a bigger impact on Australian assets. In such a case, we will likely see the AUD weakening across the board and the Australian stock market rallying. On the other hand, another hot report should keep on weighing on the stock market and support the Australian dollar.AUDUSD TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that we have formed a rising wedge, which is confirmed by the RSI divergence. These patterns are divergent in nature as they form when momentum fades. The price generally either bounces from the bottom trendline before rallying into new highs or breaks below the trendline and falls into the base of the wedge, which in this case is around the 0.66 handle.AUDUSD TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see more clearly the price action inside the wedge. The buyers will likely step in around the bottom trendline with a defined risk below the 0.6660 level to position for a rally into the 0.68 handle next. The sellers, on the other hand, will want to see the price breaking lower to increase the bearish bets into the 0.66 handle.AUDUSD TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, we can see that we have a minor support zone around the 0.6705 level. If the price gets there, we can expect the buyers to step in with a defined risk below the support to position for a rally into the top trendline. The sellers, on the other hand, will look for a break lower to increase the bearish bets into the bottom trendline. The red lines define the average daily range for today. UPCOMING CATALYSTSTomorrow we have the Australian monthly inflation data, the US ADP, the US ISM Services PMI and the US Job Openings data. On Thursday, we get the latest US Jobless Claims figures. On Friday, we conclude the week with the US NFP report. This article was written by Giuseppe Dellamotta at investinglive.com.

Prior 51.3Final Composite PMI 51.4 vs 52.1 prelimPrior 51.2Key findings:Business activity expansion remains marginal Renewed upturn in new orders Input cost inflation accelerates to seven-month highComment:Tim Moore, Economics Director at S&P Global Market Intelligence, said: "Lacklustre business activity growth continued across the UK service sector at the end of 2025. Moreover, the speed of expansion was softer than signalled by the earlier 'flash' survey in December and lower than seen on average in the second half of the year. "The most positive development was a renewed upturn in new business intakes, following a slight decline during November. Modest growth of incoming new work was attributed to tentative signs of a recovery in client confidence after an extended period of pre-Budget gloom. Order books were also supported by a marginal rebound in export sales. "However, survey respondents still noted sales headwinds linked to weak UK economic prospects, alongside challenging operating conditions due to factors such as sharply rising business costs and soft demand in major overseas markets. Worries about squeezed margins and broader growth prospects contributed to another marked reduction in service sector employment during December. "Meanwhile, inflationary pressures across the service economy strengthened at the end of the year. Input prices rose to the greatest extent for seven months, and output charge inflation rebounded from November's recent low, despite the subdued demand backdrop." This article was written by Giuseppe Dellamotta at investinglive.com.

There's only a couple out for now and I will update the list below as and when the releases come about, which tend to be roughly around the same time. Here's what we got so far:North Rhine Westphalia CPI +1.8% vs +2.3% y/y priorSaxony CPI +1.9% vs +2.2% y/y priorBavaria CPI +% vs +2.2% y/y priorBaden Wuerttemberg CPI +% vs +2.3% y/y priorSome backdrop from earlier in the day:"As for the German report later, the estimates point to a cooling in headline annual inflation. The expectation is for a 2.1% reading, down from 2.3% in November. But again, the core annual inflation estimate is the more important detail to look out for. And that stood at 2.7% in November, just a little down from 2.8% in October. It's still on the higher side though, keeping stubborn above the 2% threshold."At the balance so far, we can roughly see the national reading come in around 1.9% to 2.0% as compared to 2.3% in November last year. But again, the key thing to pay attention to will be the core annual inflation reading instead. This article was written by Justin Low at investinglive.com.

Prior 53.6Composite PMI 51.5 vs 51.9 prelimPrior 52.8 This article was written by Justin Low at investinglive.com.

Prior 53.1Final Composite PMI 51.3 vs 51.5 prelimPrior 52.4Key findings:Business expectations drop to lowest since last April Comment:Commenting on the PMI data, Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said: “Business activity in the private service sector grew for the fourth month in a row. Although the pace of expansion has slowed slightly, it can still be described as relatively robust. In this environment, companies also found themselves compelled to hire more staff than the month before, after having even reduced employment at times in 2025. The moderate growth in new business suggests that the start to the new year could be satisfactory. “Service companies are in a position to pass on the rise in costs to their customers, albeit only partially. Taken on its own, this points to favourable, but not spectacular demand conditions. The higher costs are likely to be primarily the result of continued above-average wage increases. This is because most service activities are relatively labour- and wage-intensive. This cost problem is unlikely to disappear in the coming year, as the main cause is demographic change and the resulting labour shortage, which continues to prevail in many sectors despite the generally weak economy. “Confidence among service providers has deteriorated significantly with regard to the next twelve months. The index of future activity has slipped to its lowest level since last April, putting it around three-and-a-half points below the long-term average. This may be due to dissatisfaction with the government, as many companies believe that the reforms that have been adopted are heading in the wrong direction or are not comprehensive enough. However, experience shows that sentiment can also change quickly, so this is only a snapshot of the current situation.” This article was written by Giuseppe Dellamotta at investinglive.com.