MARKET WRAPS
Watch For:
Germany Ifo business climate index; trading updates from Ryanair
Opening Call:
European stock futures were mixed early Monday. Asian stock benchmarks were mixed; the dollar weakened; Treasury yields were down; while oil futures and gold rose.
Equities:
Stock futures were mixed in Europe, ahead of this week's interest-rate decision by the Federal Reserve.
All eyes and ears will be on Fed Chair Jerome Powell, who will make comments to reporters on Wednesday after the Fed releases its rate decision. Markets largely expect the central bank to keep rates steady, though Powell's comments could provide additional details on what policymakers are weighing in their decisions.
In an interview, Diane Swonk, chief U.S. economist at HSBC, said the Fed was "between a rock and hard place." On the one hand, inflation has been sticky. On the other hand, there seems to be no income growth to help strengthen the labor market and power the economy forward, she said.
Forex:
The dollar extended losses after booking its worst week in eight months last week, even as stocks and Treasurys put in a partial recovery after President Trump's pivot on Greenland.
That could suggest the dollar's reputation in global financial markets has been further tarnished by President Trump's latest use of tariff threats, as well as his actions abroad since retaking office a year ago.
"The pattern that we've seen is that whenever policy moves, it expands the envelope of policy options in a way that's potentially disruptive, and the market's reaction is to sell the dollar," said Steve Englander, global head of G-10 foreign-exchange research at Standard Chartered Bank.
Bonds:
Expectations for quick further U.S. rate cuts are evaporating. The market doesn't see another move until July. But waiting for six months also dims the prospect of any move.
"The longer they wait to cut, the higher the hurdle becomes to justify on economic grounds the need to ease further," said Sarah House, senior economist at Wells Fargo.
Michael Feroli, chief U.S. economist at J.P. Morgan, forecasts the Fed will be on hold all year. The next Fed move will be a hike in the latter half of 2027, he said.
Energy:
Crude oil prices have been volatile in recent days, as traders weigh the likelihood of disrupted flows.
"My base case is a slowdown or even a decline in Iranian oil production and Iranian oil exports," said Gregory Brew, senior analyst for Iran and energy at Eurasia Group consulting firm. A deterioration in the domestic situation or regime collapse would likely worsen that outlook, he said.
Gulf countries have cautioned that Iran's system to sell its oil may break down if the regime itself collapses, according to Gulf delegates to the Organization of the Petroleum Exporting Countries.
Metals:
Gold prices crossed the $5,000-an-ounce milestone for the first time, as worries about a U.S. government shutdown added fresh fuel to the metal's red-hot rally.
The precious metal has smashed records over the past year as investors piled into safe-haven assets amid anxiety over geopolitical tensions and frothy equities markets.
"Precious metals show no signs of stopping on the upside," Sucden Financial said in commentary. "This momentum appears relentless, and for us, the question is not the directional view but how long market participants can finance these gains," it added.
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Copper strengthened during Asian trading hours. Seasonally thinner liquidity heading into the Lunar New Year holiday is expected to amplify price swings, Sucden Financial analysts Daria Efanova and Viktoria Kuszak said.
Meanwhile, "rising LME and CME inventories alongside a jump in SHFE-deliverable material point to physical players front-loading deliveries ahead of this holiday break, likely to reduce exposure while markets are less liquid," they added. Prices are likely to remain volatile, but move within a range in the near term, Sucden Financial said.
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Iron ore was up in early Asian trading. Supply and demand conditions across the ferrous metals supply chain remain relatively healthy, with steel mill margins supported by the limited pace of production restarts, Nanhua Futures analysts said.
Nanhua said it isn't overly pessimistic about hot metal demand and expects downside risks to be limited, given robust restocking needs.
TODAY'S TOP HEADLINES
Gold Surges Above $5,000 on Shutdown Fears, Geopolitical Tensions
Gold has broken past the $5,000-an-ounce barrier, crossing the key level for the first time on Monday as worries about a U.S. government shutdown added fresh fuel to the metal's red-hot rally.
The precious metal has smashed records over the past year as investors piled into safe-haven assets amid anxiety over geopolitical tensions and frothy equities markets. Dollar weakness and lower interest rates have heightened gold's appeal, while central banks have been rotating into gold aggressively to burnish their foreign reserves.
The World Economy Is Hooked on Government Debt
FRANKFURT-This year, global growth is being brought to you by the government.
Rocked by an avalanche of growth-sapping shocks, countries around the world are tearing up savings plans and rolling out large fiscal stimulus packages financed by bumper budget deficits.
Iran Is Selling More Oil but Making Less Money
Iran exported more oil in 2025 than it had done in years, smuggling crude in defiance of sanctions, mainly to China. At the same time, the regime's profits from the commodity collapsed.
The falling price of global crude compressed prices, but the decline was largely driven by a web of middlemen and buyers taking advantage of the regime's precarious position and dependence on oil revenue. They know Tehran has few other ways to unload its sanctioned oil apart from through its shadow fleet, a global network of aging tankers that the Trump administration is pursuing with sanctions and special forces.
Europe's $1 Trillion Race to Build Back Its Defense Industry
President Trump's overtures about acquiring Greenland are now reviving questions among the U.S.'s North Atlantic Treaty Organization allies over whether Europe can make enough of its own weapons to fight independently of America.
Defense analysts and lawmakers mainly conclude yes, but not just yet.
Europe Prepares for a Nightmare Scenario: The U.S. Blocking Access to Tech
DAVOS, Switzerland-Rising tensions with the U.S. are spurring new plans in Europe to do something that has long seemed impossible: break with American technology in favor of homegrown alternatives.
President Trump this week dropped his threat to take control of Greenland by force if necessary. But even the possibility of armed conflict with allies has injected new urgency into long-simmering debates in Europe about how to reduce its reliance on U.S. tech infrastructure and tools that support swaths of the economy.
Can Trump and Big Pharma Get the World to Pay More for Drugs?
Americans pay about three times what other wealthy nations do for branded prescription drugs. For years, policymakers have tried to fix this by cutting U.S. drug prices directly. President Trump has pushed a different idea: make foreign countries pay more so Americans can pay less.
For Big Pharma, there is potential upside. But it is easier said than done.
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Expected Major Events for Monday
00:01/UK: Jan CBI Growth Indicator and Service Sector Survey
06:00/FIN: Dec PPI
08:00/CZE: Jan Business cycle survey (consumer/business confidence)
08:00/SPN: Dec PPI
09:00/POL: Dec Retail Sales
09:00/GER: Jan ifo Business Climate Index
13:00/POL: Dec Broad money M3
14:00/BEL: Jan Business Confidence Survey
17:59/UK: Dec Adzuna UK Job Market Report
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(END) Dow Jones Newswires
January 26, 2026 00:04 ET (05:04 GMT)
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