Financial markets stayed nervous early Friday but slightly positive after U.S. President Donald Trump reversed his stance on Greenland, and optimism grew around Ukraine-Russia peace talks. Positive U.S. inflation, growth, and employment signals from Thursday helped sentiment, even though they failed to support the U.S. Dollar. However, caution remains ahead of key Ukraine-Russia peace talks later this week and today’s preliminary December PMIs (Purchasing Managers’ Indexes) for major economies, especially as Trump’s comments remain mixed.
U.S. data on Thursday was broadly dollar-supportive, but the U.S. Dollar still weakened as markets focused on geopolitics. Trump outlined a framework for a Greenland deal, while a constructive meeting with Ukrainian President Volodymyr Zelensky paved the way for a trilateral summit with Russia later this week, with U.S. officials arriving today.
The U.S. November PCE (Personal Consumption Expenditures) Price Index, the Federal Reserve’s preferred inflation gauge, rose 2.8% year-on-year, matching expectations and up from 2.7%. Final U.S. Q3 GDP (Gross Domestic Product) was revised up to 4.4% from 4.3%, above Q2’s 3.8%. Initial jobless claims fell to 200K versus 210K expected, signalling a “low hire, low fire” labour market as continuing claims hit new cycle highs.
Trump also confirmed there will be no $2,000 stimulus checks, as U.S. House Speaker Mike Johnson said Republicans remain divided on using tariff revenues for household payments, reducing hopes of a stock-boosting stimulus.
The ECB (European Central Bank) showed no urgency to change policy, with December 2025 meeting accounts highlighting balanced risks, fragile conditions, and geopolitical uncertainty, supporting a flexible stance.
In Japan, political risk rose after Prime Minister Sanae Takaichi dissolved the lower house and called a snap election for February 8. Japan’s finance minister said authorities remain alert despite easing bond market stress. The Bank of Japan kept its policy rate at 0.75% by an 8–1 vote, raised its inflation outlook, and revealed dissent, with board member Takata calling for a hike to 1.0% due to upside inflation risks. Japan’s December CPI (Consumer Price Index) slowed, with CPI excluding fresh food at 2.4% year-on-year, while core-core CPI stayed firm at 2.9%.
GBPUSD was volatile but ended stronger, helped by overall U.S. Dollar weakness despite brief UK political headlines. In China, the PBOC (People’s Bank of China) set the strongest yuan midpoint since May 2023 at 6.9929 per dollar, injected 1 trillion yuan via reverse repos and the MLF (Medium-Term Lending Facility), and signaled further rate and RRR (Reserve Requirement Ratio) cuts.
Australia’s January flash PMI showed a strong start to 2026, with the composite index at 55.5 and easing price pressures. New Zealand Q4 CPI rose 0.6% quarter-on-quarter, lifting annual inflation to 3.1% and keeping expectations that the RBNZ (Reserve Bank of New Zealand) will stay on hold, though later data capped NZD gains. Antipodean currencies outperformed, with AUDUSD hitting a 15-month high after strong Australian jobs data.
Oil prices edged higher after the EIA (Energy Information Administration) reported a larger-than-expected rise in U.S. crude inventories. U.S. equities were mixed, with tech leading, Meta up 5.3%, Netflix down 2.4%, Tesla up nearly 4%, and Intel beating Q4 earnings but warning on Q1 margins.
Amid these plays, the U.S. Dollar Index (DXY) licks its wounds after falling the most in six weeks the previous day, while the gold price seesaws near $4,960 after hitting a fresh record high earlier in the day. On the same line, Silver also flashes a record high around $99.50, whereas EURUSD and GBPUSD both struggle to extend the previous gains, despite looking set for a weekly gain. That said, Antipodeans are strong, and the USDJPY is also upbeat despite hawkish BoJ bias, while crude oil posts mild gains after snapping a three-day losing streak. Additionally, cryptocurrencies edge higher and so do the Asia-Pacific equities, tracing Wall Street’s modestly upbeat performance.
Cautious signals in the ECB (European Central Bank) Minutes add to unease ahead of Ukraine-Russia peace talks and the key January EU/US PMIs (Purchasing Managers’ Indexes), capping EURUSD gains even as the pair heads for its biggest weekly rise in seven months.
In the UK, political uncertainty and caution ahead of monthly PMIs weigh on GBPUSD, despite the pair being on track for its first weekly gain in four weeks.
Meanwhile, USDJPY targets a fourth straight weekly gain and a third consecutive daily rise, as the BoJ’s (Bank of Japan) hawkish pause is overshadowed by political focus on the February 08 Japan elections, which could lead to heavy fiscal stimulus and further weaken the JPY.
AUDUSD holds firm at its highest level since October 2024, supported by strong Australian PMIs (Purchasing Managers’ Indexes), positive employment signals, and a softer U.S. Dollar.
NZDUSD pulls back from a four-month high but remains on track for a second straight weekly gain, the strongest since late November, backed by upbeat New Zealand data and hawkish remarks from RBNZ (Reserve Bank of New Zealand) officials.
Elsewhere, USDCAD stays under pressure near a two-week low after four consecutive daily losses, even as crude oil bulls pause amid supply concerns and easing geopolitical risks, while strong Canadian data and improved global trade relations continue to support the Loonie.
Driven by a softer U.S. Dollar, a technical breakout, and strong institutional demand, gold and silver remain firmly in focus after extending their record highs following a stellar 2025 performance. The move signals a return to the traditional flight toward bullion during periods of uncertainty. Gold is now nearing the $5K level, while silver is approaching the $100 mark, suggesting the bull run is only just beginning.
Crude oil posts modest gains after a sharp decline, supported by a surprise inventory build and easing supply concerns, and is still set for a weekly gain. Cryptocurrencies also edge higher despite an early-week slump, while Asia-Pacific equities trade slightly positive, tracking Wall Street’s upbeat lead.
In equities, the Trump TACO trade dominated early trading, with technology stocks leading. After volatile moves, the S&P 500 ended little changed following its opening gap. Meta surged 5.3%, Netflix slipped another 2.4% as its latest earnings continued to weigh, and Tesla climbed nearly 4% after launching a driverless car in Austin.
Intel beat Q4 earnings expectations, posting stronger-than-expected results for the December quarter across earnings, revenue, and margins, but flagged softer margins and revenue for Q1. Adjusted earnings per share came in at $0.15, and revenue reached $13.67 billion, both above forecasts, though the cautious outlook for the March quarter limited the market reaction.
UK and Canada Retail Sales will combine with January PMIs (Purchasing Managers’ Indexes) from the EU, UK, and the US to drive markets on Friday, while traders also track Ukraine peace talks, Greenland developments, and comments from Trump.
The USD remains under pressure as it failed to gain from the upbeat Core PCE (Personal Consumption Expenditures) Price Index, unless upcoming U.S. data delivers strong positives, though any improvement on the geopolitical front could still test Greenback bears.
With the USD likely to stay softer, Gold and Silver prices may remain firm, while the Antipodeans, crude oil, cryptocurrencies, and equities look set for a positive weekly close.
May the trading luck be with you!
