Market drivers and catalysts
Equities: Equities were mixed: US ended flat on chip and central-bank chatter, Europe steadied despite luxury weakness; Hong Kong slipped on caution.
Volatility: VIX futures up, trade rhetoric back in focus, SPX options price a ±1.0% move this week
Digital assets: Crypto risk-off, but IBIT and ETHA flows remain resilient
Fixed Income: US treasury yields jump as Hassett seen less likely next Fed Chair. New highs for Japan’s yields.
Currencies: US dollar weakens Monday in Asia after initial strength on US treasury yields and geopolitical developments.
Commodities: Gold and silver jump to record highs on Greenland tariffs threats
Macro events: Trump tariff threats toward Europe and Davos headlines raise geopolitical uncertainty despite mixed U.S. and China data.
Macro headlines
Trump proposed tariffs on eight European countries to force them to accept the US taking over Greenland, starting at 10% in February and potentially rising to 25% by June. European leaders may reconsider last year's trade deal, with Macron possibly activating the EU's anti-coercion instrument.
EU leaders will hold an emergency meeting on Trump’s tariff threat in the coming days as member states weigh retaliatory measures including levies on €93 billion of US goods and use of the anti-coercion instrument, an official said.
US President Trump said Friday that he wanted to keep Kevin Hassett where he is as the White House chief economic adviser. Hassett was widely considered the most likely next Fed Chair nominee to replace current Fed Chair Powell this May and one of the most likely to push for lower Fed policy rates.
Iranian President Pezeshkian warned of war if Supreme Leader Khamenei is attacked, responding to US President Trump's comments calling for Khamenei's removal and criticizing him as "a sick man."
The NAHB/Wells Fargo Housing Market Index dropped to 37.0 in January 2026, showing ongoing challenges in the US housing market. Builder sentiment declined across all areas, with significant price cuts and increased sales incentives being reported.
U.S. industrial production rose 0.4% in December, exceeding expectations. Manufacturing output increased by 0.2%, while utilities surged 2.6%, driven by a 12% rise in natural gas. Mining output fell 0.7%. Capacity utilization reached 76.3%, still below the long-term average.
China's economy expanded 4.5% last quarter from a year earlier, the slowest pace since the reopening from Covid lockdowns in late 2022. While industrial production held up well in December, retail sales and investment worsened more than forecast.
Macro calendar highlights (times in GMT)
1000 – Eurozone Dec (Final) CPI
1330 – Canada Dec CPI
World Economic Forum is held in Davos through Friday
US cash markets closed for MLK Day holiday
Earnings events
This Week
Tuesday: Netflix, Interactive Brokers, 3M
Wednesday: Johnson & Johnson, Charles Schwab
Thursday: Visa, LVMH, SK Hynix, Procter & Gamble, GE Aerospace, Intel, Abbott Laboratories, Intuitive Surgical, KLA Tencor, Capital One Financial, Freeport McMoRan, CSX Corporation
- Friday: SLB
For all macro, earnings, and dividend events check Saxo’s calendar.
Equities
USA: The S&P 500 slipped 0.1% to 6,939.95, the Nasdaq Composite dipped 0.1% to 23,515.39, and the Dow fell 0.2% to 49,359.33.
Fed-chair talk and a U.S.–Taiwan trade deal featuring $250 billion of promised Taiwanese investment kept semiconductors in focus, lifting Micron 7.8% after a director bought shares and Broadcom 2.5%, while State Street fell 6.0% on weaker revenue.
Mastercard slipped 0.6% on renewed credit-card rate-cap worries, and U.S. cash markets were closed Monday for Martin Luther King Jr. Day as futures traded about 0.7% lower on Greenland-tariff headlines.
Europe: The Euro Stoxx 50 fell 0.2% to 6,029.45 and the STOXX 600 finished flat at 614.38 as luxury and miners cooled late-week risk appetite.
Richemont slid 5.4% after a brokerage downgrade and the luxury sector logged its biggest one-day drop since October, while Novo Nordisk rose 6.5% after the UK approved a higher dose of Wegovy. Defence outperformed as Kongsberg Gruppen jumped 9.5% on target-price upgrades, and attention shifted to whether the new Greenland-linked tariff threat turns into policy before February 1.
Asia: Hong Kong’s Hang Seng fell 0.3% to 26,844.96 and the Hang Seng Tech Index eased 0.1% to 5,822.18 as traders stayed cautious ahead of China’s GDP and activity data. Beijing’s tighter margin-financing rules, effective January 19, added pressure, with Tencent down 0.7% and Xiaomi down 2.0% as growth names were trimmed.
Pop Mart dropped 5.6% on renewed scrutiny of its toy supply chain, while Alibaba added 1.0%, and the next catalyst was China’s loan prime rate decision and any follow-through from the People’s Bank of China (PBoC) on easing signals.
Volatility
Market volatility remains contained on the surface, but signs of caution are building underneath. With U.S. cash markets closed for Martin Luther King Jr. Day, today’s signals largely reflect Friday’s close. The VIX ended at 15.86, while very short-term measures stayed lower (VIX1D 12.31, VIX9D 12.09), suggesting no immediate stress but also little complacency. What stands out is skew: the Cboe SKEW index at 153.6 shows investors continue to pay up for protection against large downside moves, a sign that tail risks remain front of mind.
Options pricing implies an expected ±72-point (±1.0%) move for the S&P 500 into Friday, 23 January. Looking at that expiry, downside protection remains more expensive than upside exposure, confirming a downside-skewed market. Beyond data and earnings, attention also turns to the World Economic Forum in Davos, where comments from political leaders, central bankers, and CEOs can shift expectations on trade, geopolitics, and growth. Combined with renewed U.S. tariff rhetoric toward Europe, this keeps volatility contained for now, but vulnerable to sudden headline-driven moves.
Digital Assets
Crypto markets are under pressure as risk sentiment weakens globally. Bitcoin slipped back toward $92,600, while ether trades near $3,200, and higher-beta assets like solana and xrp are seeing deeper pullbacks. The backdrop is familiar: rising geopolitical tension, renewed trade threats involving Europe and Greenland, and delays around U.S. crypto regulation are dampening risk appetite. Large liquidations over the past 24 hours underline how quickly leverage can unwind when sentiment turns.
That said, ETF flows remain a key stabiliser. IBIT is modestly higher on the day, and ETHA is holding steady, suggesting that longer-term investors are still using regulated ETFs to gain exposure even as spot prices soften. This divergence matters: when ETF demand remains intact during price pullbacks, it often limits downside follow-through. For now, crypto remains highly sensitive to macro headlines, behaving more like a high-risk asset than a hedge. Investor focus this week will stay on whether ETF inflows persist, or whether broader risk aversion starts to spill over more decisively.
Fixed Income
Japan’s government bonds sold off again, with the benchmark 2-year JGB yield hitting a new cycle high above 1.22%, up almost two basis points, while the benchmark 10-year yield lifted sharply by eight basis points to hit a new high since the 1990’s above 2.27%. Japan’s government is said to be considering a cut on food taxes that would drive larger fiscal deficits.
US treasuries sold off Friday after President Trump suggested that Kevin Hassett, widely seen as the most likely next Fed Chair, would more likely stay at his current position as White House economic adviser. Hassett was seen as one of the most dovish options to replace current Fed Chair Powell this May. The benchmark 2-year US treasury yield finished the day two basis points stronger in the higher part of the range since last October at 3.586%, while the benchmark 10-year yield rose over five basis points to a new highs since September of last year at 4.223%
US high yield corporate bonds spreads at tightest levels since before global financial crisis, as Friday saw the Bloomberg measure of the high yield to US treasury yield spread we track tightening two basis points to 251 basis points, its lowest level since 2007.
Commodities
Gold and silver, which both faced some profit-taking pressure on Friday, jumped to fresh record highs as renewed geopolitical tensions resurfaced. Trump’s aggressive push to take over Greenland has deepened an already widening geopolitical fault line between the US and Europe. Combined with ongoing Iran risks, concerns about Fed independence, and investor aversion to the dollar and US government bonds amid rising fiscal debt worries, the underlying demand for hard assets remains firm.
Oil prices trade softer as Iran tensions ease and broader markets turned risk-off amid President Donald Trump’s reported bid to buy Greenland with threats. Brent trades back below USD 64 and WTI near $59.
Currencies
The US dollar sold off Monday in late Asian hours after finishing last week on a strong note on Fed Chair nomination talks (dovish Hassett seen less likely now). The greenback also opened this week on a stronger note on the latest geopolitical tensions with Europe on Trump’s threatened tariffs on Europe over his intent to acquire Greenland for the US. But later Monday, the big dollar reversed course, taking EURUSD, for example, from a low below 1.1580 to back above 1.1625 by early European hours.
The Japanese yen strengthened through key levels Monday, as USDJPY dipped below the prior range high near 157.89, posting a 157.43 low in Tokyo’s Monday session before the yen strength eased and even reversed course. EURJPY bounced from a 182.63 low on Monday back to 183.50. Long JGB yields rose aggressively on new fiscal deficit concerns ahead of a likely snap election in February.
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