Relentless geopolitics has continued to haunt global markets since the turn of the year, and last week offered little respite. What has changed, however, is not the scale of the headlines but the market’s tolerance for them. Investors appear increasingly fatigued by policy uncertainty and abrupt reversals from the US, where confidence has become harder […]
The second full week of 2026 was dominated by high-level political and macro headlines, leaving markets in a constant state of reassessment rather than conviction. Traders were confronted with a dense mix of headlines, ranging from renewed scrutiny of the Fed’s independence to mounting speculation over who will succeed Jerome Powell as Fed chair. At
Dollar climbed sharply in early US session as markets continued to pare back bets on a Fed rate cut in Q1 2026, a move driven by stronger-than-expected labor market data. Initial jobless claims fell back below the psychological 200k mark, countering dovish concerns about extended labor-market deterioration. Odds of a March rate cut have collapsed
Yen recovered broadly today after Japan delivered its strongest verbal intervention in months, temporarily slowing the currency’s slide. The shift in tone came as USD/JPY neared 160, its strongest level since July 2024, prompting officials to push back more forcefully against what they described as excessive moves. Crucially, the rhetoric was aimed at speed and
“Takaichi trade” remained the dominant theme in markets today. Nikkei added nearly 1.5% on the day, pushing to yet another record high as Japanese driven by expectations that Prime Minister Sanae Takaichi’s government will pursue expansionary fiscal policies and pro-growth reforms after the speculated snap election. Yen selloff extended earlier in the session, but momentum
Dollar gyrates in a tight range and remains an underperformer for the week, showing little reaction to December US consumer inflation data. With no meaningful downside surprise in the data, inflation figures effectively cemented expectations for a policy hold by the Fed at its upcoming meeting. Futures now assign around 95% probability that interest rates
Federal Reserve Chair Jerome Powell revealed on Sunday that the U.S. central bank has been served subpoenas by the Department of Justice that threaten criminal charges, raising concerns that the Trump administration is trying to undermine the institution’s independence. “On Friday, the Department of Justice served the Federal Reserve with grand jury subpoenas, threatening a
With the economic calendar nearly empty, markets are fixated on the escalating political risk surrounding Fed Chair Jerome Powell, who is now under federal criminal investigation linked to the renovation of the Fed’s headquarters and his congressional testimony on the matter. The move has taken markets by surprise, particularly given that Powell’s term as Fed
News of a US criminal investigation into Fed Chair Jerome Powell dominated global financial headlines, injecting a fresh dose of political risk into markets. While the investigation itself was unsettling, the sharper jolt came from Powell’s unusually direct response, which framed the episode as part of a broader campaign to pressure the central bank. In
The first full week of 2026 delivered a barrage of geopolitical shocks that would normally be expected to rattle global markets. Instead, investors largely looked through the noise, producing a market outcome that appears counterintuitive at first glance. The most dramatic development came from Latin America, where the US carried out a direct military intervention
Market conditions have settled after earlier risk-on moves, with European indexes and US futures showing little direction. The absence of follow-through buying suggests traders are shifting toward more cautious trading. With desks fully staffed again, attention is turning to Friday’s December US non-farm payrolls report. Dollar remains broadly on the back foot and will be
As liquidity conditions have normalized quickly after the holiday lull, markets are digesting the fallout from Washington’s weekend raid in Venezuela and the capture of President Nicolás Maduro. While the operation initially triggered a spike in geopolitical risk, price action suggests investors remain cautious but far from alarmed. The greenback rallied broadly alongside precious metals
Markets remain stuck in a year-end lull on the final trading day of the year, with liquidity thin and participation limited. Price action across asset classes reflects consolidation rather than conviction, as investors opt to close the year defensively rather than chase late moves. Stronger-than-expected China PMI data failed to lift sentiment. While the readings
Following a split decision to lower interest rates by another quarter point last month, the minutes of the Federal Reserve’s December meeting provided further clarification about officials’ mixed views about the outlook for rates. The minutes revealed participants expressed a “range of views” about the restrictiveness of the Fed’s current monetary policy stance. Most participants
Currency markets remain largely frozen, with holiday conditions draining liquidity and suppressing volatility. Also, the macro calendar offers no immediate catalyst, leaving markets with little to trade beyond positioning adjustments. As a result, price action across majors and crosses shows little urgency, with most traders waiting for January to re-engage. Focus now shifts to minutes
Currency markets have entered deep holiday mode, with trading exceptionally subdued despite sharp swings elsewhere, notably in precious metals. In FX, volume and volatility have both contracted sharply. With liquidity thin and risk appetite selective, traders are choosing patience over positioning, especially with little fresh macro information to work with. December minutes from the Fed
There is little on the economic calendar for the final week of the year, leaving Fed minutes from the December meeting as the lone focal point for markets during the New Year holiday stretch. The minutes are expected to shed light on the internal debate that produced a rare three-way split. Chicago Fed President Austan
