- Trump on Greenland, the bluster continues: says "now is the time, it will be done"
- South Korea banks signal modest credit easing as debt curbs persist
- China factory output accelerates as retail sales and investment lag - recap
- China Q4 GDP slows to three-year low despite hitting 2025 growth target
- China home prices fall again in December as property downturn persists
- China data: Q4 GDP 4.5% y/y (expected 4.4%), Dec retail sales +0.9% y/y (expected 1.2%)
- JPY traders heads up, Japan PM Takaichi press conference from 0900GMT
- China new home price continued to drop in December 2025.
- Japan election raises odds of sales tax cut, bond yields jump
- PBOC sets USD/ CNY reference rate for today at 7.0051 (vs. estimate at 6.9689)
- Bitcoin has been slammed lower, back under US$93K
- UK house asking prices post record seasonal jump, Rightmove says
- Japan data: Machine Orders for November: -11.0% m/m (vs. expected -5.1%)
- Gold has hit a record high after Trump's extra tariff plan announced over the weekend
- US stock markets have fallen after Trump's extra tariffs announcement over the weekend
- Reminder: US markets closed for holiday today, Martin Luther King Jr. Day January 19 2026
- Spain - At least 10 people died in high speed train crash
- EU calls emergency summit as Trump escalates Greenland tariff threat. Euro a little lower.
- Monday open indicative forex prices, 19 Jan 2026. 'Risk' lower on Trump's latest trade war
- investingLive Americas market news wrap: Trump hints Hassett won't be Fed pick
At a glance:
Trump threatens escalating tariffs on Europe and the UK over Greenland, triggering retaliation plans
Early FX saw USD bid, but EUR, GBP, AUD and NZD fully reversed initial losses
Yen outperformed as JGB yields surged on election-linked tax cut speculation
US equity and Treasury futures gapped lower and remained under pressure
China data reinforced uneven growth, property weakness and demographic headwinds
Bitcoin sold off sharply amid thin and unconvincing narratives
Over the weekend Trump ‘tweeted’ his plan to impose extra tariffs, in his words:
Starting on February 1st, 2026, all of the above mentioned countries (Denmark, Norway, Sweden, France, Germany, the United Kingdom, the Netherlands, and Finland) will be charged a 10% tariff on any and all goods sent to the United States. On June 1st, 2026, the tariff will be increased to 25%. This tariff will remain in place until a deal is reached for the complete and total purchase of Greenland.
Europe and the UK responded with retaliatory tariff plans of their own, though both signalled a preference for negotiation first.
In very early FX trade in the timezone, the USD gained ground against EUR, GBP, AUD, NZD, CAD and others. JPY was the exception, strengthening against the USD following its better performance late last week.
The early gap lower in EUR/USD was quickly filled. The pair rebounded sharply from below 1.1580 to highs nudging above 1.1635, with similar V-shaped moves seen in GBP/USD, AUD/USD and NZD/USD. The yen again marched to its own beat, with USD/JPY dipping below 157.50 before rebounding above 157.90. I’ll have more to say on Japan further down.
US equity index futures gapped lower on Globex and had not recovered as I post. US 10-year Treasury futures also traded lower.
Gold and silver rocketed higher.
Japan
Japanese machinery orders fell 11% m/m in November, more than double the decline economists had expected.
That data, however, was overshadowed by political developments. Japan’s looming election has sharply raised the likelihood of a temporary sales tax cut. Senior ruling party figures said scrapping the 8% food tax for two years is firmly on the table as politicians seek to cushion living costs ahead of a likely February vote.
Bond markets reacted aggressively, with 10-year JGB yields hitting their highest levels since 1999 on concerns about fiscal slippage and increased issuance.
Japan’s Nikkei fell for a third straight session, weighed down by the machinery orders shock, surging yields, Greenland-related geopolitical tension, and a firmer yen.
China
China set today’s USD/CNY fixing at 7.0051, the strongest since May 2023.
December data reinforced ongoing stress in the property sector. New home prices fell again, while resale prices recorded their steepest decline in over a year. Developers remain under pressure, with debt talks and defaults continuing to surface.
Growth data confirmed the imbalance. Q4 GDP slowed to 4.5% y/y, the weakest pace since the post-Covid reopening, even as full-year growth met the 5% target. Industrial output held up, but retail sales and investment disappointed, underlining weak domestic demand.
Crypto
Bitcoin traded sharply lower. The move was blamed on a delayed US crypto bill, though that news broke mid last week. As ever, I’m more inclined to trust analysts who admit they don’t know the catalyst than those recycling thin narratives.
Odds and ends
ETFs linked to China’s “national team” saw another day of record outflows, adding to signs authorities are trying to cap bubble risks
UK productivity data showed tentative signs of improvement, based on alternative measures
Iron ore fell for a fifth straight session as China confirmed a sharp drop in steel output and new African supply arrived
China’s population continued to shrink in 2025, with births falling for a fourth consecutive year to the lowest level on record. The workforce is contracting as the population ages, intensifying long-term pressure on growth and the pension system. Despite subsidies and policy incentives, economists warn the demographic trend is unlikely to reverse. From a global perspective, India may increasingly pick up the slack.
Asia-Pac stocks:
- Japan (Nikkei 225) -0.84%
- Hong Kong (Hang Seng) -0.99%
- Shanghai Composite +0.13%
- Australia (S&P/ASX 200) -0.34%
Still to come:
- Japan PM press conference at 0900 GMT/ 0400 US Eastern time
- US holiday, markets closed Monday
