EUROPEAN SESSION
In the European session, the main highlights include the emergency EU leaders summit and Trump signing the Gaza peace charter in Davos. The EU leaders emergency summit was planned before Trump defused the tariffs bomb yesterday, so that shouldn't result in anything of note. We also have Trump leading the signing of the so-called "Board of Peace", a body for resolving international conflicts with a $1 billion price tag for permanent membership. Shouldn't be market-moving.
The session will likely be dominated by risk-on sentiment after Trump scrapped his tariff threat yesterday as he formed a "framework" for a future deal on Greenland.
AMERICAN SESSION
In the American session, the main highlight is the US Jobless Claims report. Initial Claims are expected at 209K vs 198K prior, while Continuing Claims are seen at 1890K vs 1884K prior. The data has been pointing to a "low firing, low hiring" labour market but we've been seeing notable improvements in the past couple of weeks that might suggest a pick up in activity.
We will also get the US PCE price index, which is the Fed's preferred inflation measure. Unfortunately, not only this is well known in advance given that forecasters can accurately estimate the numbers after the US CPI and PPI data, but it's also very old since it's November's data. Therefore, the market reaction will likely be muted.
