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Daily Pivots: (S1) 1.7298; (P) 1.7387; (R1) 1.7434; More...

EUR/AUD accelerates lower today, and intraday bias remains on the downside. Fall from 1.8160 is seen as the third leg of the pattern from 1.8554. Break of 1.7245 support will target 1.6922 fibonacci level. On the upside, break of 1.7477 support turned resistance is needed to indicate short term bottoming. Otherwise, risk will stay on the downside in case of recovery.

In the bigger picture, as long as 55 W EMA (now at 1.7472) holds, price actions from 1.8554 could still be a correction to rise from 1.5963 only. However, sustained break of the EMA will argue that it's already correcting the whole up trend from 1.4281 (2022 low). In this case, deeper decline would be seen to 38.2% retracement of 1.4281 to 1.8554 at 1.6922.

Daily Pivots: (S1) 211.18; (P) 211.67; (R1) 212.03; More...

Intraday bias n GBP/JPY is turned neutral again with current retreat. Considering bearish divergence condition in 4H MACD, firm break of 210.48 support should confirm short term topping. Deeper decline would be seen to 55 D EMA (now at 206.74) as a correction. Nevertheless, sustained break of 61.8% projection of 184.35 to 205.30 from 199.04 at 211.98 will extend current up trend to 100% projection at 219.99 next.

In the bigger picture, up trend from 123.94 (2020 low) is in progress. Next target is 61.8% projection of 148.93 to 208.09 from 184.35 at 220.90. On the downside, break of 205.30 resistance turned support is needed to indicate medium term topping. Otherwise, outlook will stay bullish even in case of deep pullback.

Gold price remained supported and extended gains to $4,500. Crude oil is showing bearish signs and might decline below $55.00.

Important Takeaways for Gold and WTI Crude Oil Prices Analysis Today

• Gold price started a consolidation phase after a decent increase to $4,500 against the US Dollar.
• A key bullish trend line is forming with support at $4,460 on the hourly chart of gold at FXOpen.
• Crude oil prices failed to clear the $58.60 region and started a fresh decline.
• There is a connecting trend line forming with support at $55.70 on the hourly chart of XTI/USD at FXOpen.

Gold Price Technical Analysis

On the hourly chart of Gold at FXOpen, the price formed a base above $4,275. The price remained in a bullish zone and started an upward move within a range above $4,350.

There was a decent move above the 50-hour simple moving average and $4,400. The bulls pushed the price above the $4,420 and $4,450 resistance levels. A high was formed at $4,500 before the price saw a minor pullback.

Initial support on the downside is $4,460 and a bullish trend line. The first key breakdown zone could be $4,445, the 50-hour simple moving average, and the 23.6% Fib retracement level of the upward move from the $4,273 swing low to the $4,500 high.

A close below the trend line and the $4,445 could spark a major downside correction. In the stated case, the price could test the 50% Fib retracement at $4,385. Any more losses might push the price toward $4,325.

Immediate resistance is near $4,500. The next major hurdle for the bulls is $4,520. An upside break above $4,520 could send Gold price toward $4,550. Any more gains may perhaps set the pace for an increase toward $4,600 and a new all-time high.

WTI Crude Oil Price Technical Analysis

On the hourly chart of WTI Crude Oil at FXOpen, the price struggled to clear $58.60 against the US Dollar. The price started a fresh decline below $58.00.

The bears gained strength and pushed the price below $57.20 and the 50-hour simple moving average. Finally, the price tested $55.70 and recently started a consolidation phase. There was a move above $56.00 and toward the 23.6% Fib retracement level of the downward move from the $58.60 swing high to the $55.71 low.

The bears are now active below $56.50. If there is a fresh increase, the price could face a barrier near $56.40. The first major hurdle is near the 50% Fib retracement at $57.15.

The next stop for the bulls could be near $58.10. Any more gains might send the price toward $58.60. Conversely, the price might start another decline and test $55.70. There is also a connecting trend line forming with support at $55.70.

The next major area of interest for the bulls on the WTI crude oil chart is $55.00. If there is a downside break, the price might decline toward $53.50. Any more losses may perhaps open the doors for a move toward $52.00.

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Daily Pivots: (S1) 182.87; (P) 183.26; (R1) 183.53; More...

EUR/JPY edges lower today and the sustained trading below 55 4H EMA (now at 183.45) argues that fall from 184.89 short term top is already correcting the rally from 172.24. Intraday bias is mildly on the downside for 55 D EMA (now at 180.74). But strong support should emerge from 180.07 cluster (38.2% retracement of 172.24 to 184.89 at 180.05) to bring rebound. ON the upside, firm break of 184.89 will resume larger up trend to 186.31 fibonacci level.

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. Considering bearish divergence condition in D MACD, upside could be capped by 186.31 on first attempt. Still, outlook will stay bullish as long as 55 W EMA (now at 172.16) holds, even in case of deep pullback. Sustained break of 186.31 will pave the way to 100% projection at 205.81 next.

Yen recovered modestly during the Asian session as Japanese equities edged lower, but both moves lacked conviction. The pullback in the Nikkei 225 was mild, and the corresponding FX response suggests investors see little reason to reassess the broader trend.

Geopolitical developments are weighing on Japanese sentiment after China imposed export curbs on selected dual-use items destined for Japan. The measures cover goods and technologies with both civilian and military applications, including rare earths essential for chipmaking and drone production. The restrictions appear linked to comments by Prime Minister Sanae Takaichi last November on Taiwan. Beijing reacted strongly after Takaichi warned that a Chinese attack on the island could represent an existential threat to Japan, further straining already fragile ties.

Japan’s dependence on China remains significant, with around 60% of rare-earth imports sourced from country. Still, the lack of clarity on which items are affected makes it difficult to gauge the real economic impact for now. Meanwhile, some observers argue the move may be largely symbolic. China has historically avoided actions that would severely disrupt Japanese industry, and the latest step may be intended to stir domestic criticism of Takaichi rather than materially damage bilateral trade.

In contrast, Australian Dollar stayed well bid after extending gains earlier in the day, even as inflation data surprised slightly to the downside. The softer CPI reduced pressure for an immediate February hike by the RBA, but did little to derail the broader tightening narrative. Even with the softer headline outcome today, disinflation in underlying pressures remains modest. That persistence keeps the door open for rate hikes later in the year, even if February proves too soon.

Markets currently price around a two-thirds chance of a February hold, with a hike expected by June and a strong probability of a second before year-end. Nevertheless, RBA policymakers are expected to place greater weight on the full Q4 inflation report later this month. A 0.9% quarter-on-quarter or higher rise in core inflation could still push the RBA toward tightening in February.

In FX performance terms this week so far, Aussie continues to lead, followed by Sterling and Yen. Loonie sits at the bottom, with Swiss Franc and Euro also under pressure. Dollar and Kiwi are trading d in the middle. Focus now shifts to US ADP jobs and ISM Services PMI later today, though the decisive catalyst is expected to be Friday’s non-farm payrolls.

In Asia, Nikkei fell -1.06%. Hong Kong HSI is down -1.12%. China Shanghai SSE rose 0.05%. Singapore Strait Times is flat. Japan 10-year JGB yield fell -0.008 to 2.122. Overnight, DOW rose 0.99%. S&P 500 rose 0.62%. NASDAQ rose 0.65%. 10-year yield rose 0.014 to 4.179.

Australia CPI cools more than expected to 3.4%, easing near-term pressure on RBA

Australia’s inflation cooled more than expected in November, offering some relief after months of intensifying price pressure. Headline CPI slowed from 3.8% yoy to 3.4%, undershooting expectations of 3.6%. Trimmed mean inflation eased modestly from 3.3% yoy to 3.2%, pointing to a gradual moderation in underlying pressures.

The slowdown was broad-based. Annual goods inflation fell to 3.3% yoy from 3.8%, driven largely by a sharp deceleration in electricity prices, which rose 19.7% over the year compared with 37.1% previously. Services inflation also eased, slowing to 3.6% yoy from 3.9%, helped by a pullback in domestic holiday travel costs after October’s school-holiday and major sporting-event surge.

Despite the moderation, price pressures remain elevated in key areas. Housing inflation stayed firm at 5.2% yoy, while rents and medical services continued to rise at a solid pace. The data ease immediate pressure on the RBA for rate hike. But with inflation still well above target range, policymakers are likely to remain cautious about declaring victory too early.

Japan PMI composite finalized at 51.1, but confidence and hiring hold up

Japan’s service sector lost some momentum at the end of 2025, with Services PMI finalized at 51.6 in December, down from 53.2 in November. Composite PMI eased to 51.1 from 52.0, marking a seven-month low.

According to S&P Global Market Intelligence Economics Associate Director Annabel Fiddes, services firms reported slower growth in activity and new orders, while manufacturing showed relative improvement. Despite softer demand signals, business confidence across Japan’s private sector remained firm, supporting a "solid and accelerated rise in employment".

Cost pressures, however, remain a key challenge. Input prices rose at the fastest pace since April, driven by higher costs, prompting firms to lift selling prices at a solid rate. With demand conditions softening slightly, companies face a "difficult balance" between passing on higher costs to protect margins and maintaining competitiveness.

EUR/JPY Daily Outlook

Daily Pivots: (S1) 182.87; (P) 183.26; (R1) 183.53; More...

EUR/JPY edges lower today and the sustained trading below 55 4H EMA (now at 183.45) argues that fall from 184.89 short term top is already correcting the rally from 172.24. Intraday bias is mildly on the downside for 55 D EMA (now at 180.74). But strong support should emerge from 180.07 cluster (38.2% retracement of 172.24 to 184.89 at 180.05) to bring rebound. ON the upside, firm break of 184.89 will resume larger up trend to 186.31 fibonacci level.

In the bigger picture, up trend from 114.42 (2020 low) is in progress and should target 61.8% projection of 124.37 to 175.41 from 154.77 at 186.31. Considering bearish divergence condition in D MACD, upside could be capped by 186.31 on first attempt. Still, outlook will stay bullish as long as 55 W EMA (now at 172.16) holds, even in case of deep pullback. Sustained break of 186.31 will pave the way to 100% projection at 205.81 next.

Markets

A huge block sale in the federal funds futures market yesterday offered some entertainment during an otherwise quiet trading session. The record-sized 200k single wager stands to benefit if the market prices out the remaining odds - currently around 17% - for a Fed rate cut at the January 28 policy meeting. It’s therefore not a coincidence the bet was made yesterday, ahead of key US economic data to be released as final input to that gathering. That starts today with JOLTS vacancies (November), the ADP job report (December) and the services ISM (December) and ends with the December payrolls on Friday. ADP job creation is seen at 50k, recovering from November’s unexpected 32k drop while the services ISM should hold fairly steady around 52.2. After three consecutive Fed rate cuts (Sep-Oct-Dec), markets in our view correctly so assume a break in the normalization cycle. We think it’ll take huge downside surprises in today’s data and ultimately in Friday’s payrolls for markets to flip their current thinking. Market’s timing for a resumption of rate cuts, right now June, could shift though, even in less outspoken data misses. In any case we don’t expect technical breaks to occur in US yields or the dollar today. The 2-yr tenor is supported by the October ’25 low of 3.37%. The 10-yr maturity is struggling near first resistance around 4.2%. EUR/USD is currently changing hands in the middle of the 1.14-1.19 trading range in place since last summer. DXY is holding a similar position in the 96-100 range.

Moves in other FI parts of the market showed some modest gains for Bunds. Yields grinded around 3 bps lower, with regional inflation numbers kickstarting the move and proximity of resistances zones (eg. 2.9% in the 10-yr) supporting some return action as well. They hinted at a downside surprise in the national inflation print, which eventually came in at 0.2% m/m and 2%, missing the 0.4% and 2.2% bar. Together with a slight French miss (0.1% m/m vs 0.2%, 0.7% y/y as expected), they pose some minor downside risks to today’s European-wide release. The bar is set at 0.2% m/m and 2% y/y. Even if that would occur, there’s no reason for the ECB to act. Future CPI releases will likely see inflation dropping below the 2% goal due to (energy) base effects. But policymakers the last couple of months repeatedly warned that the ECB is to look through small and temporary deviations from target. Supply today consists of Germany’s second tap this week (10-yr) along with Belgium launching a new 10-yr syndicated benchmark deal. Stock markets after a strong start of 2026 seem to be catching a breather today. Japanese stocks this morning underperform following China imposing export controls over a feud regarding Japanese PM Takaichi’s Taiwan comments (see below).

News & Views

Overall Australian price growth was unchanged in November (0% M/M) with the annual figure falling somewhat more than hoped, from 3.8% Y/Y to 3.4% Y/Y (vs 3.6% consensus). The largest contributor to annual inflation in November was housing, up 5.2%. This was followed by food and non-alcoholic beverages, up 3.3%, and transport, which rose 2.7%. Trimmed mean inflation, which ignores the most volatile price swings and is the central bank’s preferred measure for core inflation, showed prices rising by 0.3% M/M and 3.2% Y/Y (from 3.3%). Annual goods inflation slowed from 3.8% Y/Y to 3.3% Y/Y mainly because of electricity prices (19.7% Y/Y from +37.1% Y/Y). Services inflation slowed from 3.9% Y/Y to 3.6% Y/Y due to domestic holiday travel. Today’s lower inflation print doesn’t alter the market view that the RBA will be raising its policy rate by the May policy meeting. The Aussie dollar extends its (commodity-driven) good run against USD with AUD/USD moving above 0.6750 for the first time since October 2024.

The Japanese foreign ministry reacted to yesterday’s announcement of Chinese export controls for items destined for Japan that could have military uses. Broad estimates suggest that dual-use items (commercial & military) total over 40% of total Japanese goods imports from China. Japan’s Chief Cabinet Secretary Kihara said that the measures only target Japan and deviate significantly from international practice. Tensions between both countries rise high since end November when PM Takaichi suggested that Japan could use military action if China uses force to try and seize Taiwan.

The year may have begun with ongoing trade tensions and fresh geopolitical uncertainties, questions around the legitimacy of Trump’s actions — both on trade and geopolitical fronts — and persisting doubts over AI valuations, but none of this has been enough to prevent the bulls from pushing toward fresh records. The S&P 500 printed its first record high of the year — likely the first of another long series — the Dow Jones marked its second record high, and the Nasdaq advanced nearly 1% after dipping below its 50-DMA a few sessions ago.

In the aftermath of the Venezuelan operation, the market’s reaction has been largely muted — and even positive for a handful of sectors, including oil, defense stocks, rare earth metals (on potential retaliation risks from China), Bitcoin (amid speculation around a 600,000+ BTC shadow reserve Venezuela is believed to be sitting on), and precious metals. Importantly, flows into the latter appear to go beyond pure safe-haven demand, as investors showed little stress over Maduro’s capture.

What’s next? While the immediate Venezuelan risk may now be behind us, the message is clear: the US is unlikely to stop here. Relations with NATO and Europe are already under strain over Greenland, which strengthens the case for maintaining — and even increasing — exposure to defense stocks. The STOXX Europe Aerospace & Defense ETF kicked off the year with a 7% jump, and there is likely more upside ahead.

Metals — precious and industrial — also remain firmly in focus. Silver is seeing large fluctuations around the $80 mark, with the rally exacerbated by China’s decision to restrict silver exports, in a similar fashion to rare earth metals. This policy took effect on January 1. From now on, each silver shipment requires government approval, and only large, state-approved companies meeting high production and compliance thresholds are allowed to export. Estimates suggest this could potentially halve China’s export capacity, removing 4’500–5’000 tonnes from annual global supply — a meaningful amount given persistent supply deficits. Because Chinese refined silver represents a large share of globally tradable supply, these restrictions tighten the global pipeline and amplify volatility. The silver market is therefore facing a structural supply squeeze, which should, in theory, continue to support prices.

Copper also hit a record high on Comex on Tuesday, driven by a different type of supply shock. A rush to ship copper into the US ahead of potential tariffs is draining supply elsewhere, leaving a hole in the global market and pushing prices higher — on top of an already constructive backdrop of strong demand and limited supply growth. Copper, too, remains one of the hottest trades at the moment and still has room to extend gains. In both cases, US dollar softness is providing additional support to the bulls.

The main risk here is that once tariff front-running fades, some of that supply dislocation could unwind — or that a sharp rebound in the US dollar could take some heat out of the move.

Speaking of the US dollar, the greenback reversed Asian losses yesterday and closed the session on a bullish note. It is lower again in Asia this morning, highlighting a lack of directional consensus between Eastern and Western trading hours. In the absence of a major macro catalyst, part of yesterday’s move likely reflected softer-than-expected inflation and PMI data. The European Central Bank (ECB) appears to have gained control over inflation, with aggregate CPI expected to have slowed to around 2% in December (final data due this morning). From here, any further slowdown in economic growth could revive the need for additional support, and easing price pressures would give the ECB more room to act. This dynamic pushed the EURUSD below the 1.17 mark yesterday, where the pair is currently consolidating.

In Australia, inflation also fell to a three-month low, yet the AUDUSD is rising nonetheless, supported by firm metal and energy prices that continue to attract capital inflows.

Elsewhere, tech appetite is weaker in Asia this morning. Memory-chip makers are pulling back after strong gains in the first few sessions of the year, the Korean Kospi is giving back early advances, and SoftBank is down around 1.5%. The move follows Nvidia’s failure to reignite investor enthusiasm at CES, despite Nvidia’s CEO Jensen Huang announcing that its Rubin chips are nearing shipment, the CFO improving its bullish revenue outlook on strong demand, and the company unveiling its Alpamayo platform — a push into physical AI that opens new revenue avenues. Alas, investors remain focused on stretched valuations, heavy leverage and the circular nature of AI-related deals. xAI has just closed a $20bn funding round, with Nvidia among the backers.

It increasingly feels like good news is no longer generating the same euphoria seen over the past three years. The tech rally is showing signs of fatigue, supporting rotation trades — a trend further reinforced by geopolitical headlines. Tech-light European and UK indices have started the year outperforming their tech-heavy US peers, with scope for further catch-up given lower valuations and their more cyclical exposure.

Zooming out, the macro backdrop remains supportive for equities (particularly cyclicals). The Federal Reserve (Fed) is expected to cut rates several times this year, while falling inflation elsewhere continues to strengthen the hand of central-bank doves globally.

This week, the US will release its latest jobs data, with the ADP report today expected to show fewer than 50k job additions last month. A weakening labour market has been a key factor behind the Fed’s willingness to look past inflation risks and refocus on employment. The US 2-year yield remains below the 3.50% mark, and Fed funds futures currently price roughly a 50-50 chance of a March rate cut.

Further weakness in labour data would reinforce this narrative and support rate-cut expectations, while stronger-than-expected figures could quickly revive the hawks.

But, but, but... It is worth noting that the inflation leg of US data remains blurred, as recent releases were distorted by statistical issues and failed to provide a clear signal on underlying price dynamics. The fact that inflation is easing elsewhere has given investors some reassurance that US price pressures are also likely under control, allowing the Fed to focus on jobs. However, should inflation unexpectedly re-accelerate, rate-cut expectations could be rapidly repriced.

Australia’s inflation cooled more than expected in November, offering some relief after months of intensifying price pressure. Headline CPI slowed from 3.8% yoy to 3.4%, undershooting expectations of 3.6%. Trimmed mean inflation eased modestly from 3.3% yoy to 3.2%, pointing to a gradual moderation in underlying pressures.

The slowdown was broad-based. Annual goods inflation fell to 3.3% yoy from 3.8%, driven largely by a sharp deceleration in electricity prices, which rose 19.7% over the year compared with 37.1% previously. Services inflation also eased, slowing to 3.6% yoy from 3.9%, helped by a pullback in domestic holiday travel costs after October’s school-holiday and major sporting-event surge.

Despite the moderation, price pressures remain elevated in key areas. Housing inflation stayed firm at 5.2% yoy, while rents and medical services continued to rise at a solid pace. The data ease immediate pressure on the RBA for rate hike. But with inflation still well above target range, policymakers are likely to remain cautious about declaring victory too early.

Full Australia CPI release here.

Japan’s service sector lost some momentum at the end of 2025, with Services PMI finalized at 51.6 in December, down from 53.2 in November. Composite PMI eased to 51.1 from 52.0, marking a seven-month low.

According to S&P Global Market Intelligence Economics Associate Director Annabel Fiddes, services firms reported slower growth in activity and new orders, while manufacturing showed relative improvement. Despite softer demand signals, business confidence across Japan’s private sector remained firm, supporting a "solid and accelerated rise in employment".

Cost pressures, however, remain a key challenge. Input prices rose at the fastest pace since April, driven by higher costs, prompting firms to lift selling prices at a solid rate. With demand conditions softening slightly, companies face a "difficult balance" between passing on higher costs to protect margins and maintaining competitiveness.

Full Japan PMI services final release here.

In focus today

From the US, ISM Services index and ADP private sector employment report are due for release for December, and the JOLTs report for November. ADP's weekly employment estimates signalled improving jobs growth momentum towards late November and early December.

In the euro area, we expect HICP inflation to decline to 1.9% y/y in December from 2.1% y/y in November with a risk that it could round down to 1.8% y/y. We expect core inflation at 2.3% y/y. Hence, the December inflation should be seen as a dovish surprise, although sticky services inflation somewhat limits how dovishly it should be interpreted.

In Sweden, services PMI for December are released today. The November service PMI outcome for Sweden was the highest since summer 2022 and significantly stronger than the outcomes in both Europe and the US. Given that we have seen a decline in most countries for the December outcome, it would not be surprising if we also see some pullback in today's December release for Sweden.

Economic and market news

What happened overnight

China imposed a ban on the export of dual-use items to Japan for military use, escalating a diplomatic dispute over Japanese Prime Minister Takaichi's recent remarks on Taiwan. Japan has called the measure "absolutely unacceptable," as the ban includes rare earth elements critical for manufacturing. Beijing is reportedly considering broader rare earth curbs, which could significantly impact Japan's economy and key industries like automotives. Market reaction has been muted so far, though Japanese shares fell on Wednesday, led by declines in mining stocks.

Overnight, US President Trump once again rekindled his ambition to acquire Greenland, citing national security priorities in the Arctic region and the island's untapped mineral resources. While the White House stated that purchasing Greenland is being discussed, it also explicitly stated that military action to acquire it is an option. That said, WSJ also reported that Secretary of State Marco Rubio had downplayed the threats as a negotiation tactic in a recent internal briefing. European leaders and US lawmakers have expressed strong opposition, stressing respect for Denmark's sovereignty and NATO obligations, but the administration insists the goal "is not going away".

What happened yesterday

In Germany, December inflation came in weaker than expected, with HICP inflation falling to 2.0% y/y (cons: 2.2%, prior: 2.6%) and CPI inflation declining to 1.8% y/y (cons: 2.1% y/y, prior: 2.3% y/y). The surprise was driven by sharp declines in goods and food prices, while energy prices fell as anticipated. However, services inflation remained very sticky at 3.5% y/y, limiting the dovish interpretation of the weaker headline figures.

In France, HICP inflation fell to 0.7% y/y in December from 0.8% y/y in November, as expected. The decline was driven by lower energy prices, while food inflation rose and services inflation held steady at 2.2% y/y. These prints point to lower than initially expected euro area headline inflation today, which we now expect to decline to 1.9% y/y.

In the US, Federal Reserve Governor Stephen Miran argued for aggressive interest rate cuts in 2026, calling for over 100 basis points of reductions to support economic growth. Miran stated that policy remains overly restrictive despite inflation being close to the Fed's 2% target and warned that failing to lower rates could hinder robust growth expectations for the year. His term as a Fed governor ends on 31 January, and he is serving at the Fed while on leave from his role as a top economic adviser to President Trump.

In geopolitics, Venezuelan opposition leader Maria Corina Machado praised US President Trump for the capture of Nicolas Maduro and expressed confidence that her movement would win a free election. Machado escaped Venezuela in October and received the Nobel Peace Prize and now vows to return as soon as possible. However, Trump appears to be working with interim President Delcy Rodriguez, a Maduro ally, to stabilise Venezuela before an election, disappointing the opposition. International backlash against the US intervention continues, with concerns over the precedent it sets for global norms. Overnight, Trump announced plans to refine and sell up to 50 million barrels of sanctioned Venezuelan oil, with revenues controlled by the US administration to allegedly benefit both Venezuelans and Americans

In the euro area, final December services PMI was revised slightly down to 52.4 from the flash estimate of 52.6, while the composite PMI fell to 51.5 from 51.9 due to the manufacturing print being revised down. Despite the downward revisions, the euro area economy ended the year on a positive footing, with the Q4 average composite PMI significantly higher than in Q3, indicating decent growth and supporting the ECB's assessment of the economy being in a "good place".

In Norway, house prices (SA) were unchanged in December, falling short of Norges Bank's December MPR estimate of +0.8%. While this is unlikely to affect monetary policy in the short term, the data could support lower rate expectations in the market.

Equities: Global equities extended gains yesterday, marking the third consecutive positive trading day to start 2026. In Europe, the advance was more defensively led, with healthcare outperforming. Oil prices reversed lower after a brief uptick, weighing on energy stocks, which underperformed on the day.

More importantly, the first three trading days of the year have been characterised by a broadening of the equity rally. Performance has rotated away from some last year's winners (not least tech) and towards more classic deep cyclical sectors. Likewise small caps have outperformed large caps for three days in a row, reinforcing the message of broader participation. Putting this into perspective: since our last tactical shift in mid-December, the materials sector is up 8.2%, while global technology is down 1.7%.

Part of this reflects the exceptional strength in both industrial and precious metals, but the broader takeaway remains clear. Global equities are up 2.2% over the same period, despite technology underperforming. In other words, equities can rise even when tech does not lead! In the US yesterday, Dow +1.0%, S&P 500 +0.6%, Nasdaq +0.7%, and Russell 2000 +1.4%. This morning, Asian markets are mixed, and futures in both Europe and the US point to a more cautious open.

FI and FX: The USD outperformed most of the rest of the G10 currency space yesterday closely followed by the Scandies on another day marked by positive sentiment in the stock market. The bond market was overall steady with US yields inching higher and European yields lower. The DKK market came under pressure. The culprit was a rise in EUR/DKK close to past central bank FX intervention levels, which led widening of the spread between Danish and German government bonds.