The latest reports we got on the Federal Reserve Chairman decision were last week and suggested that Trump would make a decision either just before or just after going to Davos.He left Davos yesterday and is now back in Washington so it could be on the agenda for today or this weekend. It seems that Trump has already made up his mind."We're down to three, but we're down to two. And I probably can tell you we're down to maybe one in my mind," he told CNBC in Davos.The odds are notable as Rick Rieder continues to climb and is now at 35%, narrowly behind Warsh. Trump seemed to rule out former favorite Kevin Hassett once again.Trump said: "I'd like to actually keep him where he is if ‌you want to know the truth. I don't want to lose him. He's so good on television."Trump also said that Rieder was "very impressive" in his interview.I think that Warsh is still by far the most-likely winner. He's been lobbying for this job for many years and has kept quiet in the run-up to the decision. Trump frequently says that he regrets choosing Powell over Warsh, who was the runner up last time.The market seems to be taking the decision in stride. Hassett was seen as the chief yes-man for Trump and now that he's seemingly ruled out, the market doesn't hate any of the candidates. I'm not so sure that Warsh isn't similar to Hassett.In any case, I think the clearest way we will see it in markets is in gold. If Trump picks Warsh, gold's likely to rise while if he picks Rieder it will fall.Waller is an interesting case as he's lately frequently touted the dovish talking points but I suspect the market views that as something of a political move and that if confirmed, he would go back to the old Waller, who was more of a hawk. This article was written by Adam Button at investinglive.com.

Prior was -0.2%Retail sales ex-autos vs +1.2% expectedPrior ex-autos -0.6%Sales of $70.4 billion in NovemberCore sales +1.6% vs -0.5% priorDecember advance sales -0.5%The core sales number is a strong one but part of that was the reopening of liquor stores in British Columbia after a strike. One sign of a better turn in the housing market was that higher sales were also recorded at building material and garden equipment and supplies dealers (+2.1%) in November. The increase marks a second consecutive monthly gain for this subsector.The weaker spot in the report was the advance number for December, though I expect a big part of that is the decline in gasoline prices. This week's CPI report showed gasoline prices down 7.1% m/m from November to December. Goods prices also fell 1.2% m/m in the CPI report, which could have been another drag.The latest RBC data on the Canadian consumer showed a slight decline in three-month average but there were strong gains in clothing and apparel as discretionary goods spending picked up.Their metric of sales excluding autos and gas rose 0.9% in November and 0.7% in December.The big surprise of 2025 for me was the resilience (if not strength) of the Canadian consumer despite declining housing prices and the angst about Trump's trade war. Those factors certainly drove a large decline in Canadian tourism to the United States but domestically, it didn't seem to change spending patterns. That underscores that spending is really all about jobs, not sentiment. There has been some uptick in layoffs in the past year and certainly a drop in immigration so those are the factors to watch going forward, but I'd say the risks are two-sided at this point -- at least until AI and robotics starts eating up the jobs market. This article was written by Adam Button at investinglive.com.

Rate cuts by year-endFed: 44 bps (97% probability of no change at the upcoming meeting)BoE: 38 bps (98% probability of no change at the upcoming meeting)ECB: 1 bps (100% probability of no change at the upcoming meeting)Rate hikes by year-endBoC: 13 bps (89% probability of no change at the upcoming meeting)BoJ: 52 bps (90% probability of no change at the upcoming meeting)RBA: 57 bps (61% probability of rate hike at the upcoming meeting)RBNZ: 51 bps (99% probability of no change at the upcoming meeting)SNB: 3 bps (99% probability of no change at the upcoming meeting)You can find last week's market pricing here.It's been a lively trading week thanks to Trump's TACO trade and a few surprises on the economic data front. The main event was Trump's speech at the World Economic Forum in Davos as traders were waiting for him to de-escalate the recent trade war over Greenland. He did exactly that by announcing on Truth Social that he reached a "framework" of a deal for Greenland and that he won't impose the tariffs anymore. That triggered a slightly hawkish repricing across the board as risk sentiment picked up. The following day we got a blockbuster Australian jobs report where the unemployment rate fell to 4.1% vs 4.4% expected. The Australian Dollar surged across the board as traders firmed up expectations for a rate hike already at the upcoming meeting and raised the total tightening by year-end.The same day we got strong US Jobless Claims data and higher than expected New Zealand Q4 CPI report. Both the releases led to a hawkish repricing, although it was stronger for the RBNZ.Lastly, today the highlights were the BoJ decision and the UK Flash PMIs. The Bank of Japan held interest rates steady and slightly upgraded growth and inflation forecasts leading to a small hawkish repricing. What caught the market attention though is that after the USD/JPY pair crossed the 159.00 level, the price got smacked back down by 200 pips in a couple of seconds in a suspected intervention.The UK Flash PMIs surprised with much stronger than expected figures. The S&P Global highlighted that it was the "strongest upturn in UK private sector business activity since April 2024" and "intensification of price pressures at a level above the Bank of England target". The GBP rose following the release as traders pared back the BoE rate cut bets.We still have the US Flash PMIs coming up in the afternoon, and that could be a market-moving event if we get very strong or soft data. This article was written by Giuseppe Dellamotta at investinglive.com.

Headlines:Japanese yen jumps across the board on suspected interventionUSD/JPY with a sharp drop lower after crossing the 159.00 mark earlierJapan finance minister Katayama declines to say if they intervened in the FX marketBOJ governor Ueda says will place larger focus on inflation in making policy decisionsBOJ governor Ueda says will closely coordinate with government on the bond marketGermany January flash manufacturing PMI 48.7 vs 47.8 expectedFrance January flash services PMI 47.9 vs 50.5 expectedEurozone January flash services PMI 51.9 vs 52.6 expectedUK January flash services PMI 54.3 vs 51.7 expectedUK December retail sales +0.4% vs -0.1% m/m expectedMarkets:GBP and AUD lead, NZD lags on the dayEuropean equities slightly lower; S&P 500 futures down 0.1%US 10-year yields down 2.2 bps to 4.229%Gold down 0.2% to $4,924.53WTI crude oil up 1.6% to $60.34Bitcoin down 0.1% to $89,130The Bank of Japan (BOJ) decision today went as expected and so did Ueda’s press conference for the most part. The Japanese central bank governor didn’t offer much on what the BOJ would do to help with the yen currency plight and that triggered some selling pressure as we got into early European trading.USD/JPY moved up from 158.60 to 159.20 before being sent for a quick trip lower to 157.33 in a span of just five minutes. ?It is suspected that Tokyo officials performed a ‘rate check’ of sort, solidifying their intentions to intervene in the market to defend the yen currency. It would seem that they do not want to let this go to 160 before taking action.The move isn’t as strong as you tie to any actual intervention with USD/JPY quickly bouncing back to settle around 158.00-30 currently. Price action is still volatile but the dip lower widely suggests that this was a ‘rate check’ at most.In any case, prepare yourselves for actual intervention to follow. That was the case back in July 2024 and then in September 2022 as well. Ironically, the last time the MOF actually stepped in was also on a Friday (12 July 2024 at 2100 GMT). ?Besides that, the major currencies space didn’t get up to much with the dollar still reeling from the continued selling this week. EUR/USD is down slightly but continues to hold above 1.1700 with USD/CHF sitting closer to 0.7900, keeping around the 2025 lows still.Some positive UK data is helping the pound get a minor lift with GBP/USD up 0.2% to 1.3520 while AUD/USD is also seen higher by 0.2% to 0.6850 on the session.In other markets, equities are keeping more cautious in the final stretch of the week after the rebound in the past few sessions. US futures are down while European indices are also holding slightly lower, with overall optimism still limited by uncertainty on the geopolitical and economic fronts.I mean, who is to say what Trump will be up to next week? ????As for commodities, gold is down 0.2% to $4,924 while silver is up 2.7% to $98.75 (briefly hit $90 for the first time ever) as precious metals continue to stay hot overall ahead of the final week of January. ?The former is continuing to eye the $5,000 level with the latter having its sights on $100, both being key psychological levels to be mindful of. That especially with the January seasonal tailwind also starting to meet its end next week. This article was written by Justin Low at investinglive.com.

Goldman Sachs is arguing this point from the perspective of central bank subordination risks, and notes that the Swiss franc is the "best placed global FX hedge" for that. But the firm also adds in other factors as to why the currency is a solid pick amid the macroeconomic backdrop that is at play currently."Our view remains that the Franc is the best placed global FX hedge for central bank subordination risks. As we recently noted, beyond its usual safe-haven properties, the currency is also uniquely resilient to global inflation risks. And, on the domestic front, Switzerland’s backdrop of solid fiscal fundamentals adds to the currency’s safe-haven appeal, insulating the Franc from spillovers across markets during fiscal risk episodes."That being said, they are still not convinced that the Swiss franc will be able to offer much gains from hereon. As a reminder, they previously noted that:"We expect EUR/CHF to remain broadly rangebound In the coming months, with a gradual drift higher to 0.95 to year-end."That view is reaffirmed in this latest note as well.For some context, the SNB is one key risk factor in terms of limiting the currency's potential. That as they are likely to draw a hard line closer to 0.9200 in EUR/CHF in preventing a major strengthening of the franc at this stage.A pointer from earlier this week:"They need to manage things on the inflation front, or should I say deflation, and a stronger currency is not a welcome development. The central bank wants to steer clear from negative interest rate policy for as long as they can do so. But at the same time, that thinking is a double-edged sword in the sense that it keeps the franc currency in a firmer position amid that outlook.With the dollar and yen stuck in the mud and geopolitical and economic tensions intensifying globally, not to mention with fiscal risks factoring in, that is only going to keep the franc as the preferred haven currency for the foreseeable future.The only real question is how much can the SNB tolerate this and if they will keep wanting to hold the line at the 0.9200 level. The best they can hope for now is that geopolitical tensions will eventually pass and that will alleviate some pressure from currency gains. But as seen in 2025, the conversation about 0.9200 is one that don't seem to be going away any time soon.But with the SNB also providing somewhat of a floor, the downside appears to be more limited as well." This article was written by Justin Low at investinglive.com.

FUNDAMENTAL OVERVIEWUSD:The US Dollar weakened across the board again yesterday despite stronger than expected US jobless claims and lack of any other meaningful catalyst. We got a brief rally in the greenback after Trump announced that he reached a “framework” of a deal for Greenland and that he won’t go ahead with tariffs, but it’s clear that it wasn’t enough to remove the bearish pressure on the dollar. Barring another geopolitical escalation somewhere (Iran the most notable one), the focus will likely switch to the US data and the Fed’s interest rate path for 2026. The data has been improving recently, especially on the labour market side. If we get more of such or even better, that will likely keep supporting the US Dollar as rate cuts get slowly priced out.JPY:On the JPY side, the BoJ today left interest rates unchanged as expected and upgraded slightly growth and inflation forecasts due to the expansionary fiscal policies. There was no surprise there. During the Press Conference, Governor Ueda didn’t offer anything new in terms of forward guidance as he just repeated that they will keep raising rates if the economic outlook is realised. He also added that April price behaviour will be a factor to mull over a rate hike. This suggests that April is when they expect to deliver another rate hike if the data supports such a move. During Ueda’s press conference, the Japanese Yen started to roll over again and crossed the 159.00 level on USD/JPY. Soon after that, we got a strong spike lower that brought the pair down by 200 pips in a couple of seconds. It might have been an intervention or a “rate check”, but whatever that was, it has caught the market attention and acted as a warning for JPY bears.USDJPY TECHNICAL ANALYSIS – DAILY TIMEFRAMEOn the daily chart, we can see that USDJPY crossed briefly the 159.00 level before getting smacked down by a suspected intervention. This could limit the upside in the short-term for fears of other interventions. The sellers will likely step in around the 159.00 level with a defined risk above it to position for a correction into the 154.50 support. The buyers, on the other hand, will look for a break higher to pile in for a rally into new highs. USDJPY TECHNICAL ANALYSIS – 4 HOUR TIMEFRAMEOn the 4 hour chart, we can see that we have a minor support zone around the 157.40 level. We might get stuck in a range here with the 159.00 level as resistance. The market participants will likely continue to play the range by buying at support and selling at resistance until we get a breakout on either side.USDJPY TECHNICAL ANALYSIS – 1 HOUR TIMEFRAMEOn the 1 hour chart, there’s not much we can add here as the pair will likely stay in the range until we get some strong catalyst to trigger a breakout. UPCOMING CATALYSTSToday we conclude the week with the US Flash PMIs. This article was written by Giuseppe Dellamotta at investinglive.com.

Prior 51.4Manufacturing PMI 51.6 vs 50.6 expectedPrior 50.6Composite PMI 53.9 vs 51.5 expectedPrior 51.4Full report hereKey Findings:Strongest upturn in UK private sector business activity since April 2024Comment:Chris Williamson, Chief Business Economist at S&P Global Market Intelligence: “UK businesses kicked up a gear in January, showing encouraging resilience in the face of recent geopolitical tensions. Companies are reporting higher demand, both from home and export markets, which has driven output growth to the fastest since April 2024. Firms are also reporting the greatest optimism about the business outlook since before the 2024 Autumn Budget. "The January flash PMI is up to a level indicative of a robust quarterly GDP growth approaching 0.4%. While growth continues to be driven by the service sector, and in particular financial services and tech, the manufacturing sector is also continuing to report a gathering recovery aided by resurgent demand, with goods exports notably rising for the first time in four years. "The good news was tempered, however, by the upturn in order books failing to stem a steep loss of jobs, which companies commonly blamed on the need to reduce high costs. These cost pressures were again often linked to government policies relating to higher National Insurance contributions and the National Minimum Wage, and led to an especially steep drop in hospitality jobs. "High staffing costs were meanwhile again widely reported as a key cause of higher selling prices, hinting at an intensification of price pressures at a level above the Bank of England target.” This article was written by Giuseppe Dellamotta at investinglive.com.

Declines to respond when asked about talk of 'rate checks'Says watching forex moves with a sense of urgencyThe silence and lack of follow through remarks says a lot considering how she would normally like to interject and try and jawbone the USD/JPY currency pair lower. It leans towards the tone of action speaks louder than words. And in the case of any intervention, that is always going to be the case.In case you missed it, the Japanese yen saw a sharp spike higher earlier just for a brief period. USD/JPY slowly climbed above 159.00 after BOJ governor Ueda offered little hints on any action by the central bank to help boost the currency. Instead, he focused more on saying that they might work with the government to help keep the calm in the bond market.But after a short climb above 159.00, there was sharp selling which saw the pair drop to 157.33 before keeping close to 158.00 now - down 0.3% on the day.In the case of any actual intervention, the price action would show a much stronger follow up and more persistent selling i.e. yen buying. So, this doesn't seem to be the MOF stepping in but perhaps performing their usual 'rate check' calls before actually intervening.That has been the case previously in July 2024 as well in September 2022, where they had these 'rate checks' just before performing actual intervention by buying up the yen currency. This article was written by Justin Low at investinglive.com.

Prior 52.4Manufacturing PMI 49.4 vs 49.1 expectedPrior 48.8Composite PMI 51.5 vs 51.8 expectedPrior 51.5The end of last year was filled with optimism on the recovery but the start of the year dealt a bit of a reality check. The contrast between France and Germany again is for all to see. The former is facing a stuttering month in terms of business activity while the latter is seen more resilient still. That said, firms reduced their staffing levels for the first time in four months amid marked job cuts in Germany. So, there's that.On the inflation front, both input costs and output prices were seen growing faster than in December. So, there are still some things to be mindful about at the balance.HCOB notes that:“The recovery still looks rather feeble. In manufacturing, the headline PMI continues to signal weakness, while growth in services activity is somewhat more moderate than the month before. Overall economic growth remains unchanged. Looking ahead, the low growth in new orders is certainly no game changer. Instead, the start into the new year points to more of the same in the months to come. For the ECB, these results are anything but reassuring. Inflation in the services sector, which the central bank is watching particularly closely, has increased significantly in terms of sales prices. Input cost inflation remains an issue as well, though it has accelerated less than sales price inflation. As a result, ECB members are likely to feel validated in holding rates where they are. Some of the more hawkish members may even argue that the next move should be up rather than down. Comparing countries, services activity in Germany expanded in January at a fairly robust pace, while in France service companies slipped into contractionary territory. This may be linked to the political difficulties in finalising the 2026 budget. In manufacturing, France shows a slightly better performance than Germany, but in both countries output growth is nothing to write home about. Overall, Germany’s economy started the new year on a growth path, while monthly output in France has declined. While the unemployment rate has been roughly stable over the past year, weakening employment figures in services and ongoing staff cuts in manufacturing point toward a somewhat higher unemployment rate in the coming months. This suggests that the current weak growth trajectory may not be enough to keep employment steady, especially as companies continue striving to become leaner, for example by deploying artificial intelligence solutions.” This article was written by Justin Low at investinglive.com.

Oil Technical Analysis Today: Crude Oil Bears Stay in Control Below $60, but Here Is Exactly When the Bias ChangesDate: January 23, 2026 Market: Light Crude Oil Futures (CL) | Micro Crude Oil (MCL) Author: Itai Levitan, investingLive.comAs I show in my video above, this oil technical analysis for today focuses on the daily structure in light crude oil futures, where price action continues to favor the bears. That said, this is not a one-sided narrative. While the current evidence points lower, we remain very clear about where, when, and how the bearish outlook would be invalidated. Tight risk control and open-mindedness are essential, especially in crude oil.Key takeaways for traders and investorsCrude oil remains inside a well-defined price channel, keeping downside risk active.The $60 round number continues to act as a ceiling rather than support.The 20-day EMA near $59.11 is capping rallies and reinforcing bearish pressure.VWAP and value area levels around $59.77-$59.85 define the current battle zone.A sustained move above $59.85 would quickly weaken the bearish case.Light crude oil technical analysis: the higher-timeframe structureOn the daily chart of crude oil futures, price remains trapped inside a broader channel that has guided market behavior since mid-2025. The upper boundary originates from the June 23, 2025 high near $78.40, with a parallel structure validated again in mid-January 2026.What matters technically is not just the channel itself, but what failed. The most recent test of the upper boundary did not lead to upside continuation. Instead, price sold off sharply back toward the 20-day EMA, signaling disappointment for bulls. When price fails to sustain above resistance and falls back into a channel, it is usually bearish, not neutral.Why the $59-$60 zone is critical in oil price analysisCrude oil is currently compressed between just under $60 and the 20-day EMA at $59.11. This area is reinforced by important VWAP references:Today’s developing VWAP: ~$59.77Yesterday’s Value Area High: ~$59.84This creates a tight resistance band. As long as price trades below this zone, rallies tend to look like mean-reversion moves, not trend reversals. From an oil price prediction perspective, bulls still have work to do.Scenario-based crude oil outlook (not predictions)Bearish scenario - current base caseCondition: Price remains below $59.85 and inside the channel.Implication: Sellers retain control.Technical path: A move toward the lower channel region near $56.80-$57.00 remains technically valid.Risk management: Wider stops above $60 can still produce attractive risk-reward, especially when using MCL for position sizing flexibility.Bullish invalidation - where our bias changesCondition: Two consecutive hourly closes above $59.84-$59.85, followed by acceptance above the channel.Implication: The bearish thesis weakens rapidly.Next focus: Sustained trade above the channel would reopen upside scenarios and shift the analysis toward accumulation rather than distribution.This is how we stay flexible. The stance is bearish because of current information, not because of conviction without limits.Example trade idea shared with our community (educational)This is an example of how we translate oil technical analysis into disciplined trade execution, shared for educational purposes only.Short Crude Oil (Light Crude Futures) Ticker: CL | Micro: MCL Prices in futuresEntries1st sell: 59.69 (filled)2nd sell: 59.82 (pending at the time of publishing idea, but filled already since then)Stop60.03 (not reached yet a tthe time of this analysis but updated to $60.14 at the European Open as a last update)TargetsTP1: 59.39TP2: 59.17TP3 (runner, swing): 56.60 (assumed for RR calculation)Risk-reward breakdownAssumptions:Both sell orders filledAll entries same sizeAll exits same sizeAverage entry: (59.69 + 59.82) / 2 = 59.755Risk (1R): 60.03 − 59.755 = 0.275TP1: RR ≈ 1.33RTP2: RR ≈ 2.13RTP3 (runner): RR ≈ 11.47RAverage RR (equal exits): ≈ 4.98RBig-picture oil outlook for patient tradersFor very patient traders and investors, a deeper move toward ~49.50 (roughly 17% below current prices) is technically possible over the coming weeks. This is not a forecast, but a structural observation. If even a small runner reaches that zone, the RR on that portion becomes extreme and can materially improve overall trade expectancy.Trade management philosophy: defense firstOur approach emphasizes defense before offence:Partial profits reduce emotional pressure.If and when TP1 is reached, unfilled entries are canceled and the stop is moved to entry.Capital protection comes first. Only then do we allow runners to work.Join our free Telegram channelIf you want to follow real-time oil analysis, trade ideas, and professional trade management, you are welcome to join our free Telegram channel: ? https://t.me/investingLiveStocksWe regularly share setups like this one, often minutes after execution, along with updates and risk management logic.We do not promise results. This is not financial advice. Everything is shared for educational purposes only.Crude oil can change quickly. Our job is not to predict, but to adapt with clear levels, clear invalidation, and tight risk control.UPDATE - Crude Oil Short Our crude oil short has been stopped out. That is part of trading. But even when we lose on execution, we can still gain valuable information. The key point: Our map has not changed. See the video above for that "map perspective". What failed this time was our previous bet on where price would sit on that map. The technical framework remains relevant. As long as bulls are able to keep price above certain well-defined thresholds and technical patterns, the bullish case holds together. If that changes, we also know exactly at what (tight) price zone it changes. This is important: It is not about picking any random price and saying “above this is bullish, below this is bearish.” The Value Area High of today now sits at 60.02 and the is the current “line in the sand” between bulls and bears (and bulls regained control). Markets move through junctions. Some technical junctions are far more important, far more watched, and far more meaningful than others. Those are the levels that matter. That is where bias changes. And that is where tehnical decisions should be made. This article was written by Itai Levitan at investinglive.com.

Prior 47.0Services PMI 53.3 vs 52.5 expectedPrior 52.7Composite PMI 52.5 vs 51.6 expectedPrior 51.3Full report hereKey Points:Business activity growth quickens in January, but labour market conditions deteriorateComment:Commenting on the flash PMI data, Dr. Cyrus de la Rubia, Chief Economist at Hamburg Commercial Bank, said: “The data show a good start to the new year, overall. Output in the manufacturing sector returned to - albeit meagre - growth, and so did new orders. Even more encouraging is the stronger pickup in activity in the services sector. Looking ahead, confidence has risen noticeably in the services sector and has held at a solid level in manufacturing. “While there are signs of a modest recovery, services companies have trimmed their workforce significantly in January, which might point more to efficiency measures than to concerns about demand. In manufacturing, the process of cutting jobs has continued unabated. Since this has been ongoing since mid-2023, there’s now a lot of debate about whether this is a structural issue, one that would require structural answers in the form of reforms that are anything but easy to implement. “In the services sector, the situation has brightened quite a bit. Pricing power seems to have increased significantly as sales price inflation has moved up. While that partly reflects higher input costs, the rise in sales price inflation has been even stronger. With new business growing more robustly than last month, service providers are becoming more self-confident – something that also shows up in their much higher optimism for future activity. “Meanwhile, the International Monetary Fund has upgraded its 2026 GDP growth forecast for Germany by 0.2 percentage points to 1.1%, reinforcing the sense that growth prospects are improving. Still, the recovery remains rather fragile. The continued drop in inventories and another decline in backlogs of orders in manufacturing are clear examples. Yet, the unusually large fiscal stimulus through much higher spending on defence and infrastructure should provide a noticeable boost to the economy.” This article was written by Giuseppe Dellamotta at investinglive.com.

Prior 50.1Manufacturing PMI 51.0 vs 50.5 expectedPrior 50.7Composite PMI 48.6 vs 50.0 expectedPrior 50.0With a start to the year like this, France is not beating the allegations that it will be the main drag of the euro area for 2026. While political woes are a key issue, the French economy looks to also be stuttering to start the new year.Of note, services activity falls back into contraction territory and marks a fresh 9-month low. That isn't enough to offset the better news on the manufacturing side of things with the estimate there being a 43-month high. That comes as the manufacturing output index climbs to 51.9, marking a 47-month high.Looking at the details, demand conditions continue to be weak and clients are showing hesitancy to place orders amid the ongoing political deadlock regarding the nation’s fiscal plans. That being said, business optimism was the highest since September 2024 so that may hint that there might be better things to come in the French economy moving forward. But for now, it's very much a wait and see kind of thing.HCOB notes that:“The French private sector entered the new year on a muted note. The HCOB Flash PMIs point to a broad‑based softening in export conditions, reflecting continued uncertainty on the trade policy front despite prior trade agreements. Renewed tariff threats from the US, which included the prospect of a 200% duty on French champagne, underscore how fragile the external environment remains. Although such threats may merely be being used as a tool to gain political leverage, they still add to the uncertainty faced by export‑orientated firms. A relatively firm euro and intensifying competition from China further weigh on the outlook for exporters. “Nonetheless, the HCOB flash PMIs showed a modest improvement in manufacturing, whereas activity in the services sector weakened notably at the start of the year. The prospect of a resolution over the 2026 national budget offers some relief, as it reduces the risk of a renewed political crisis in the near term. This has contributed to a marked rise in the future activity index. However, the new budget is unlikely to deliver sufficient progress on fiscal consolidation. “Whether the manufacturing industry embarks on a recovery in 2026 remains uncertain. The headline PMI for the sector signalled a mild uptick in growth, but a more durable improvement would require a clear rebound in new orders, which remained in contraction in January. The continued decline in output prices and export orders also suggests that a sustained upswing in growth is not yet in sight.” This article was written by Justin Low at investinglive.com.

The Japanese yen currency just spiked higher across the board after stumbling following BOJ governor Ueda's press conference. The price movement has similar characteristics to a "rate check" call from the MOF, similar to previous episodes we have seen back in 2024 and 2022.For some context, the last reported "rate check" was back in the middle of July 2024, just before Tokyo authorities stepped in to buy up the currency. And before that, the previous "rate check" was in 14 September 2022 and that was a week before actual intervention took place.The "rate check" calls were all meant to give the market a bit of fair warning before they actually intervened after. So, we have some precedence of what to expect next with the Japanese yen. The only question is when.The one in July 2024 saw the MOF step in with actual intervention in just a matter of days whereas the one in 2022 took about a week.USD/JPY was trading up to around 159.22 after BOJ governor Ueda's press conference earlier but was quickly sent lower to 157.33 before recovering to about 158.20 at the moment of writing. It seems that Tokyo officials aren't going to risk it getting anywhere near 160.00 before stepping in.If you're still trading yen pairs at the moment, just be wary that intervention risks have now heightened dramatically after this move here.Personally, this doesn't look to be actual intervention as any real hit by Tokyo would result in a much larger and stronger move. So, my take is that it's a "rate check" and we should get some official sources noting that in the hours to come. This article was written by Justin Low at investinglive.com.

Seems like the Japanese officials are drawing a line at 159.00 on USD/JPY. That's also where we got an intensification of verbal intervention last week that helped to ease the pressure on the Japanese Yen. The pair fell from 159.22 to 157.32 in a matter of seconds. Looks like an intervention but some are saying that it could be a "rate check" because an intervention would have had a bigger impact. Whatever that was, it has caught market attention and acted as a warning for the JPY bears.The JPY started to roll over again this morning following the BoJ decision where the central bank kept interest rates unchanged and slightly upgraded its growth and inflation forecasts. We saw more bearish pressure on the yen during Governor Ueda press conference where he didn't sound as hawkish as the market expected given the weak yen.As mentioned many times before, interventions can help ease some pressure on the currency in the near-term but they don't change the trend. As long as the fundamentals remain against the currency, the market will keep on selling it. The BoJ needs to step up its "policy normalisation" and turn more hawkish to reverse the trend. This article was written by Giuseppe Dellamotta at investinglive.com.

EUROPEAN SESSIONIn the European session, the main highlights will be the release of the Flash PMIs for the UK and the major Eurozone economies. We've been seeing a re-acceleration in activity to start the year for other advanced countries like Australia, New Zealand and Japan, which could be the case for everyone as business uncertainty eased following a rocky 2025.Stronger economic conditions will likely result in hawkish repricing for central banks, especially for the Fed and the BoE where traders expect rate cuts. Unless Trump pulls out another "Liberation Day"-like crisis, this year will likely be characterized by improving economic conditions and potentially re-accelerating inflation amid stronger labour markets and easier financial conditions. Time will tell.AMERICAN SESSIONIn the American session, we have the Canadian Retail Sales data and the US Flash PMIs. The Canadian Retail Sales M/M is expected at 1.2% vs -0.2% prior, while the Core reading is seen at 1.2% vs -0.6% prior. The shouldn't change anything for the BoC, so the market reaction will likely be muted.The focus will be mostly on the US data. The US Manufacturing PMI is expected at 52.0 vs 51.8 prior, while the Services PMI is seen at 52.9 vs 52.5 prior. The last PMIs showed the growth momentum weakening in December although the commentary was still positive. Much better than expected PMIs will likely trigger a hawkish reaction in the markets potentially boosting the US Dollar. Soft data, on the other hand, could add further pressure on the greenback.CENTRAL BANK SPEAKERS09:30 GMT/04:30 ET - BoE's Greene (hawkish - voter)10:00 GMT/05:00 ET - ECB President Lagarde (neutral - voter) This article was written by Giuseppe Dellamotta at investinglive.com.

It may not seem like it, but the headline remark is arguably the key takeaway from his press conference so far.I mean, he was not expected to be explicit about taking action to defend the sliding Japanese yen currency. But at the balance, he's reflecting no urgency to participate in this matter and leaving it to the Ministry of Finance to have to handle the situation - at least for now.Ueda is going as far to state that the BOJ is waiting on the wings because of inflation developments, pointing out that:On average, there is still some distance to the 2% inflation targetCompared to October, likelihood of achieving 2% target is heighteningBut compared to December, the likelihood is not all too differentWe are hearing more voices that price hikes are reflecting wage growthPaying attention to price changes in April but that will just be one factor in deciding policyThe messaging in his press conference today is really about reading between the lines. And so far, it suggests that the BOJ has not reached the pain threshold to have to do something about the decline in the currency. However, they appear to be already unsettled by the happenings in the bond market for the time being.In any case, addressing the latter should also help out with the former somewhat. So, I guess they will take a gander with that approach first before really needing to throw the kitchen sink to address any further freefall in the yen. This article was written by Justin Low at investinglive.com.

Prior -0.1%Retail sales +2.5% vs +1.1% y/y expectedPrior +0.6%; revised to +1.8%Retail sales ex autos, fuel +0.3% vs -0.2% m/m expectedPrior -0.2%Retail sales ex autos, fuel +3.1% vs +1.7% y/y expectedPrior +1.2%The beat in UK retail sales here comes mainly from a surge in sales from non-store retailers (+4.2%), following declines here in October and November before. It seems like the melt up in gold and silver is spilling over to retail buying as online jewellers reported that demand for precious metals picked up in December.Besides that, the breakdown shows just marginal increases in food store sales (+0.2%), and a slight bump in non-food store sales (+1.0%). Meanwhile, department store sales (-1.9%) showed a sharp decline alongside textile clothing sales (-0.7%) and household goods store sales (-3.4%).Looking at the year as a whole, all main sectors except automotive fuel rose on the year. The breakdown sees food store sales rose for the first time since 2021, but did not fully recover from their fall in 2024. Meanwhile, both non-food stores and non-store retailers rose for the second year in a row, recovering from drops in 2023. However, volumes for non-store retailers remained clearly below their peak in 2021 - which was achieved because of physical store closures during the pandemic. So, there's that. This article was written by Justin Low at investinglive.com.

May conduct market operations to encourage stability in bond marketMay do so in response to irregular market moves and exceptional casesWon't specifically comment on forex levelsForex determined by various factors, not just interest rate gapWeak yen could inflate import costs and be passed on to domestic pricesHave to be mindful of the fact that forex could have a larger impact against import costsHe's sending a subtle message on the bond market and how they might step in to try and help yields come off the boil. However, he's steering clear of anything related to the Japanese yen currency for now and that is seeing market players start to test the limits once again. USD/JPY is now up 0.3% to 158.90 levels, its highest in a little over a week:It won't be long until we have to hear more verbal intervention from Tokyo surely.All Ueda is saying so far is that policymakers will pay more attention to forex moves but he isn't hinting at much urgency otherwise to defend the currency if need be. As mentioned earlier here, that is the expected playbook though.So, the ball is thrown back over to the Ministry of Finance's court. A "rate check" coming next? This article was written by Justin Low at investinglive.com.

Japan's economy is recovering moderately albeit with some weaknessUnderlying inflation will continue rising moderatelyUnderlying inflation, rate of increase in core inflation likely to increase graduallyThey will be at a level in line with BOJ price target in the second half of the projection periodEasy monetary conditions will continue to support the economyNeed to pay attention to those risks affecting Japan's economy and pricesRisk factors include forex and financial market developmentsWill continue to raise policy rate if economy, prices move in line with forecastsTamura and Taka proposed changes to outlook report language but were voted downFinancial environment remains accommodative after December rate hikeIt will take some time until the impact of the rate hike affects the real economy more broadlyFrom the opening comments so far, he doesn't seem to be one to be in a rush to get to the next rate hike. And he's not making any standout remarks on the currency and bond market developments, at least not yet. He will definitely make a mention or two in the coming half hour. So, just look out for that. For now though, the comments above mainly covers the reasoning behind their decision making today. This article was written by Justin Low at investinglive.com.

67 of 79 (~85%) of economists said rates would remain unchanged through 2026All 83 economists expect no change to the deposit rate for the 5 February policy decisionThe poll numbers sum up very well the market expectations currently towards the ECB. And the ~85% share of opinion of no change in rates for this year is even higher than the poll last month (~75%) and in November (~66%). So, that reflects an increasing and stronger view that the central bank is not going to be able to do much on the policy front in 2026.As things stand, the ECB looks like they have gotten inflation down to as close as 2% as they can get it to. Stubborn price pressures in the likes of Germany and Spain is making it tough for the central bank to take any further action to ease interest rates. And potential stagflation risks in the former is still something that policymakers need to be mindful of.Given the circumstances, they also have to be mindful of the more persistent impact of things like US tariffs. The drive up in inflation may not be over and could circle back in due time. As such, the other side of the coin suggests that they have to retain some flexibility to be open to the idea of perhaps needing to raise interest rates again in the coming year or two.In fact, a majority of a smaller sample of 36 respondents in the poll said that the next step by the ECB would be a rate hike and not a rate cut.So, that's where we are seeing the ECB now. This article was written by Justin Low at investinglive.com.