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US consumer sentiment improved modestly in January, with the University of Michigan index rising from 52.9 to 54.0, its highest level since September. Current Economic Conditions Index climbed from 50.4 to 52.4, while the Expectations Index ticked up from 54.6 to 55.0.

The survey noted that concerns about tariffs are gradually easing, though respondents remain guarded about the broader strength of business conditions and the labor market.

On inflation, year-ahead expectations held steady at 4.2%, the lowest reading since January 2025. Longer-run expectations edged up slightly from 3.2% to 3.4%, but remain well below last year’s peaks.

Full US UoM consumer sentiment release here.

Markets

The Fed is off the hook for January. December payrolls downwardly surprised, but from a market (and a Fed) point of view the situation on the labour market didn’t deteriorate. The economy added 50k jobs (vs 70k consensus) with a 76k downward revision to October/November numbers. Details showed a modest rebound in government payrolls (+13k) following heavy job cuts in October (-174k; delayed DOGE-effect). Job cuts were mainly centered in the goods-producing sector (-21k) while private services added 58k jobs. Within those broad services, retail trade remains an underperformer with three consecutive months of job losses. A lot of attention went to the unemployment rate which, partly because of seasonality and annual revisions for the household survey, dipped from a downwardly revised 4.5% in November to 4.4%. Household employment rose by 232k according to that survey with total household employment hitting an all-time high at just shy of 164mn. Average hourly earning rose by 0.3% M/M and accelerated from 3.6% Y/Y to 3.8% Y/Y, matching the fastest pace since July 2025. US money markets reduced remaining 25 bps rate cut bets for the January 28 FOMC meeting from 15% to only 5%. The next move is only fully discounted by the June FOMC meeting, suggesting the Fed is done cutting policy rates under Chair Powell. The US yield curve bear flattens slightly with yields adding 1.5 bps (30-yr) to 2.7 bps (2-yr). The dollar traded volatile after the release but EUR/USD 1.1650 remains name of the game. US equity markets opened with 0.2%-0.4% gains. A potentially big event risk is concentrated at the Supreme Court later today. It could issue an opinion on Trump’s reciprocal tariffs that may or may not result in actual rulings to either keep them in place or strike them down. The latter would undoubtedly introduce new uncertainty: What will happen to the current trade deals? What other tariff routes are there for the US government? How quickly can these get implemented and how different are the tariff rates going to be? Rising risk premia would probably lift long-term US bond rates but the jury remains out whether and how it’ll affect other US asset classes (equities, the dollar).

News & Views

The UN’s Food and Agricultural Organization (FOA) food index eased further by 0.8% m/m in December of last year as declines in the prices for dairy products, meat and vegetable oils more than offset (modest) increases in cereals and sugar. Overall, the index showed rather mild swings during 2025, but with divergent trends in the major subcategories. The index closed 2.3% below the level at the end of 2024. Still, despite the gradual decline in H2 2025, the index average over 2025 was 4.3% higher compared to the 2024 average. The end-2025 level was 22.4% below the peak reached in March 2022. Cereal prices added 1.7% m/m in December. For the whole of 2025, the cereal price Index was 4.9% below the 2024 level, marking the lowest annual average since 2020. Especially prices of rice declined sharply (-35.2% average). The vegetable oil price index decreased marginally (0.4% m/m). For the year 2025, vegetable oil prices rose 17.1% y/y marking a three-year high amid tight global supplies. The sugar price index rose 2.4% m/m after three consecutive monthly declines, but it remained 24% below its level a year ago. The average index over 2025 also marked the lowest level since 2020.

After three consecutive months of unexpected sharp rises in Canadian job growth (totaling 181k), the Canadian economy added a modest 8.2k jobs in December (vs -2.5k consensus). The unemployment rate rose from 6.5% to 6.8%, but Statistics Cananda indicated that this was due to a rise in the participation rate (65.4%) as more people were looking for work. The rise in the unemployment rate also is seen as partially reversing a cumulative decline of 0.6% over the previous two months. Overall, 1.6mn people were unemployed in December (+73k compared to November). Average hourly earnings eased slightly from 3.6% Y/Y to 3.4%. The market reaction was limited as it probably won’t change the policy assessment of the Bank of Canada. The BoC likely finished its easing cycle end October (2.25%). This level should be adequate to hold inflation near 2% while helping the economy through current period of structural adjustment. Markets err on the side of a first rate hike by the end of the year (50%), but this remains a highly conditional call. The loonie cedes marginal to trade near USD/CAD 1.388.

Non-farm payrolls rose by 50k in December, slightly below the consensus forecast of 70k. Job gains for the two prior months were revised lower by a total of 76k. The bulk of the downward revisions were concentrated in October (-68k), coinciding with the government shutdown.

• For 2025, the economy added 584k jobs, well below the 2.0 million added the year prior.

Private payrolls added 37k new positions last month, down slightly from the 50k reported in November. Jobs gains were concentrated in leisure & hospitality (+47k) and health care & social assistance (+38.5k). Meanwhile, retail trade (-25k), construction (-11k), professional & business services (-9k), and manufacturing (-8k) all recorded jobs losses. Government added 11k.

In the household survey, the unemployment rate ticked down to 4.4% (previously 4.5%) as civilian employment (+232k) rose while the labor force (-42k) was slightly lower. The labor force participation rate ticked down to 62.4% (from 62.5% in November).

• The Bureau of Labor Statistics also revised its seasonal adjustment factors for 2025, which were small on balance, but did lower November's unemployment rate to 4.5% (previously reported at 4.6%).

Average hourly earnings rose 0.3% month-on-month (m/m), following an upwardly revised 0.2% m/m gain (previously 0.1% m/m) in November. Relative to December 2024, wages are up 3.8% (from 3.6% in November).

Key Implications

The labor market appears to have stabilized at the end of last year. Smoothing through volatility, private payrolls have largely steadied in recent months while the unemployment rate ticked down from its cycle high reached in November. But make no mistake, the combination of big policy changes and a significant ramp-up in AI investments resulted in a measurable softening in the job market last year, with the economy adding only a third of the jobs was created in 2024.

This morning's report should provide policymakers with further reassurance that the labor market is stabilizing, supporting the case for a "pause" on rate cuts. Market pricing on Fed futures were little changed following the release, with the next rate cut not fully priced until June.

Canada's economy added 8k jobs in December (+0.0% month/month), 10k more than consensus expectations for a 2.5k decline. The details were healthier, with full-time positions rising 50k, while part time decline 42k. In the twelve months to December part-time work advanced 2.6% (+99k) while full-time work rose 0.7% (+128k).

The unemployment rate rose to 6.8% from 6.5% in November (consensus expectations were for a rise to 6.7%) and is 0.1 percentage points (ppts) above the 6.7% last December. The unemployment rate was lifted by 81k entrants into the labour force. This boosted the labour force participation rate by 0.3 ppts – its highest level since July and in line with December 2024.

Job gains were once again concentrated in health care and social assistance (+21k), with other services (+15k) and construction (+11k) also being notable contributors. The biggest losses were in professional, scientific and technical services (-18k), and accommodation and food services (-12k).

Wage growth slowed in December, with average hourly wages up 3.4% versus a year ago (3.6% in November).

Key Implications

After a string of upside surprises, the Canadian labour market gave back some of its gains in December, with job growth effectively petering out, and the unemployment rate ticking higher as more people started looking for work. In a noisy data series, this is not all that surprising and remains in line with our view that the labour market is not yet out of the woods.

This report is unlikely to move the needle for the Bank of Canada. There is still slack in the labour market, but uncertainty about the supply side of the economy and the risk to inflation means they are unlikely to tip the policy rate into accommodative territory.

Daily Pivots: (S1) 156.54; (P) 156.80; (R1) 157.15; More...

Intraday bias in USD/JPY is mildly on the upside with breach of 157.88 resistance. Rise from 139.87 is trying to resume. Firm break of 158.85 key structural resistance will be an important medium term bullish sign. Next target will be 161.94 high. In any case, outlook will continue to stay bullish as long as 156.10 support holds.

In the bigger picture, corrective pattern from 161.94 (2024 high) could have completed with three waves at 139.87. Larger up trend from 102.58 (2021 low) could be ready to resume through 161.94 high. Decisive break of 158.85 structural resistance will solidify this bullish case and target 161.94 for confirmation. On the downside, break of 154.33 support will dampen this bullish view and extend the corrective range pattern with another falling leg.

Daily Pivots: (S1) 0.7966; (P) 0.7983; (R1) 0.8005; More….

Intraday bias in USD/CHF stays on the upside for the moment. As noted before, the corrective pattern from 0.7828 is in another rising leg. Further rise would be seen to 0.8123 resistance next. On the downside, below 0.7943 minor support will flip bias back to the downside for 0.7860 instead.

In the bigger picture, outlook will stay bearish as long as 0.8332 support turned resistance holds (2023 low). Long term down trend from 1.0342 (2017 high) is still in progress. Next target is 100% projection of 1.0146 (2022 high) to 0.8332 from 0.9200 at 0.7382.

Daily Pivots: (S1) 1.3416; (P) 1.3440; (R1) 1.3465; More...

GBP/USD is still holding on to 1.3401 support and intraday bias remains neutral. Further rise is mildly in favor. On the upside, break of 1.3567 will resume the rise from 1.3008 to retest 1.3787 high. However, firm break of 1.3401 will confirm short term topping, and bring deeper fall back to 55 D EMA (now at 1.3367). Sustained break of 55 D EMA will argue that corrective pattern from 1.3787 is already extending with another falling leg, and target 1.3008.

In the bigger picture, current development suggests that fall from 1.3787 is merely a corrective move, and larger rise from 1.0351 (2022 low) is still in progress. Firm break of 1.3787 will target 1.4248 (2021 high) key structural resistance. This will remain the favored case as long as target 38.2% retracement of 1.0351 to 1.3787 at 1.2474 holds, in case of another fall.

US Non-Farm Payrolls release at +50K – A slight miss to the +60K Expectations

This takes the Unemployment Rate, most favored data since the Bureau of Labor Statistics shutdown affected data, to 4.4%, lower than the 4.5% expectations and lower than the past month.

Unrounded numbers show 4.375% vs 4.564% prior. Participation Rate is also slightly lower.

Average Hourly Earnings at 0.3% M/M and 3.8% Y/Y, a bit higher than expectations on the Y/Y number.

The report provides even less reasons for the Fed to cut rates in end-January.

You can get full access to the report right here.

Don't Forget that Markets will await the Supreme Court Tariffs Decision at 10:00 A.M.

It seems that traders are reacting counterintuitively to a not-so-dovish number with the Dollar falling, Gold rallying.

Keep an eye at the end of the hour and the 9:30 Market Open to see if such reactions fade.

Check out Market reactions:

US Dollar (Dollar Index DXY)

DXY 15 min Chart – January 9, 2026. Source: TradingView

Gold (XAU/USD)

Gold (XAU/USD) 15 min Chart – January 9, 2026. Source: TradingView

Pre-open Dow Jones (Futures and CFD)

Dow Jones 15 min Chart – January 9, 2026. Source: TradingView

Daily Pivots: (S1) 1.1642; (P) 1.1663; (R1) 1.1682; More….

EUR/USD recovers mildly after NFP but overall outlook is unchanged. Intraday bias stays on the downside for the moment. Prior break of 55 D EMA (now at 1.1671) suggests that rebound from 1.1467 has already completed. Overall development indicates that corrective pattern from 1.1917 is already in the third leg. Further decline should be seen to 1.1467 support, and below. On the upside, though, break of 1.1742 will turn bias back to the upside for 1.1807 resistance instead.

In the bigger picture, as long as 55 W EMA (now at 1.1408) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.

Dollar softened modestly in early US trading after the release of mixed December labor market data. The headline payroll gain undershot expectations, but the miss did little to challenge the broader narrative of a labor market that is slowing gradually rather than deteriorating abruptly.

More importantly, for monetary policy, the fall in the unemployment rate alongside still-solid wage growth points to lingering tightness beneath the surface. Labor demand may be cooling, but conditions remain firm enough to prevent a decisive shift in policy expectations.

As such, the report offered little that is materially decisive for the Fed’s easing plans. It neither strengthens the case for aggressive cuts nor signals an urgent need to respond to labor market weakness.

Dollar’s mild pullback appears more like a positioning adjustment than a change in conviction. Some traders had built long USD exposure ahead of the release, anticipating an upside surprise that ultimately failed to materialize.

With that risk removed, it is clear that US 10-year yield lacks the momentum needed to break decisively above 4.2% resistance zone, a development that could cap any renewed Dollar rally attempt. Meanwhile, US equity futures firmed as payrolls uncertainty passed. While there is no strong upside momentum in stocks yet, the clearance of event risk is offering some near-term relief, with DOW likely to have a serious test of the 50,000 level later in the month.

On weekly FX performance, Dollar still leads overall, followed by Aussie and Sterling. Loonie remains the weakest, with Swiss Franc and Euro also underperforming. Yen and Kiwi trade in the middle of the pack.

US NFP misses by rising 50k in December, but unemployment rate falls to 4.4%

US non-farm payrolls rose by 50k in December, undershooting expectations of 66k. Downward revisions to prior months added to the softer tone, with October employment revised lower by -68k to -173k, and November trimmed by -8k to 56k.

However, the unemployment rate fell unexpectedly from 4.6% to 4.4%, beating expectations and suggesting labor market conditions remain tight despite slower job growth. Average hourly earnings rose 0.3% mom, in line with forecasts, keeping annual wage growth elevated at 3.8% .

Payroll growth in 2025 totaled just 584k, sharply lower than the 2.0 million increase in 2024.

Canada jobs beat with 8.2k growth, masks rising unemployment

Canada’s labor market delivered a modest upside surprise in December, with employment rising 8.2k, defying expectations for -5k decline. The gain, however, marked a sharp slowdown after three strong months that added a combined 181k jobs through November, signaling that momentum is cooling into year-end.

Beneath the headline, job composition was mixed. Full-time employment surged by 50k, while part-time jobs fell by -42k, pointing to improving job quality even as overall growth slowed.

At the same time, the unemployment rate jumped to 6.8% from 6.5%, above forecasts, reflecting a notable increase in labor supply. Indeed, the participation rate rose 0.3ppt to 65.4%, while the employment rate held steady at 60.9%, suggesting new entrants are outpacing hiring.

Wage growth eased slightly to 3.4% yoy, down from 3.6% in November.

Eurozone retail sales rise 0.2% mom in November, as non-food demand improves

Eurozone retail sales volumes rose 0.2% mom in November, slightly above expectations of 0.1% increase. The improvement was driven primarily by non-food products, where sales increased 0.4% mom, offsetting weakness elsewhere. Sales of food, drinks and tobacco slipped -0.2%, while automotive fuel volumes fell -0.1%.

Across the broader EU, retail sales also rose 0.2% mom, but national divergences were stark. Luxembourg posted a sharp 5.8% surge, followed by Portugal (2.2%) and Denmark (1.9%). Croatia (-2.2%), Belgium (-1.6%) and Slovakia (-1.5%) recorded notable declines.

China CPI surprises to upside at 0.8%, but full-year picture weak

China’s consumer inflation accelerated in December, with CPI rising from 0.7% to 0.8% yoy, above expectations of 0.6% and marking a 34-month high. The increase was driven mainly by food prices, as fresh vegetables surged 18.2% and beef prices rose 6.9%, supported by pre-New Year holiday demand.

However, price pressures remained uneven. Pork prices continued to fall sharply, down -14.6% yoy, while prices of gold jewelry jumped 68.5%, reflecting strong investment and gifting demand rather than broad-based consumption. According to National Bureau of Statistics, holiday shopping and supportive policies helped lift prices, but the improvement remains selective.

Looking beyond December, the broader deflationary challenge persists. Full-year CPI growth in 2025 was flat, the weakest in 16 years and well below policymakers’ “around 2%” target.

At the producer level, deflation moderated only slightly. PPI improved to -1.9% yoy in December from -2.2%, aided by rising non-ferrous metal prices and capacity discipline in key industries. Still, PPI fell 2.6% for the full year.

EUR/USD Mid-Day Outlook

Daily Pivots: (S1) 1.1642; (P) 1.1663; (R1) 1.1682; More….

EUR/USD recovers mildly after NFP but overall outlook is unchanged. Intraday bias stays on the downside for the moment. Prior break of 55 D EMA (now at 1.1671) suggests that rebound from 1.1467 has already completed. Overall development indicates that corrective pattern from 1.1917 is already in the third leg. Further decline should be seen to 1.1467 support, and below. On the upside, though, break of 1.1742 will turn bias back to the upside for 1.1807 resistance instead.

In the bigger picture, as long as 55 W EMA (now at 1.1408) holds, up trend from 0.9534 (2022 low) is still in favor to continue. Decisive break of 1.2 key psychological level will carry larger bullish implication. However, sustained trading below 55 W EMA will argue that rise from 0.9534 has completed as a three wave corrective bounce, and keep long term outlook bearish.