Investor sentiment in North America and overseas remained tense amid significant shifts in the financial markets. Following a sharp decline in global bond prices, many turned to gold as a safe asset, driving its value to a new high.
Market Overview
Global equity markets continued to struggle. In the United States, the acquisition dynamics regarding Greenland introduced uncertainty, particularly with President Donald Trump speaking at the World Economic Forum in Davos.
Wall Street Update
- Wall Street futures showed volatility, initially trending lower but then pointing upward in pre-market trading.
- Major companies reporting earnings include Johnson & Johnson, Charles Schwab Corp., and Halliburton Co.
Mantas Vanagas, a senior economist at Westpac, noted the “sell America” sentiment significantly influenced market movements as investors reassess their commitments to U.S. assets.
International Stock Market Movements
- The pan-European STOXX 600 fell by 0.8% during morning trading.
- Britain’s FTSE 100 decreased by 0.07%.
- Germany’s DAX dropped 1.38%.
- France’s CAC 40 declined by 0.57%.
- In Asia, Japan’s Nikkei closed 0.41% lower, whereas Hong Kong’s Hang Seng rose by 0.37%.
Commodity Insights
In commodities, oil prices stabilized despite concerns surrounding production issues in Kazakhstan and rising geopolitical tensions tied to U.S. tariff threats.
- Brent crude futures increased by 0.3%, reaching US$65.12 per barrel.
- West Texas Intermediate (WTI) crude also rose by 0.3%, trading at US$60.54 per barrel.
Gold saw impressive gains, climbing 2.1% to US$4,861.91 per ounce and achieving a record high of US$4,887.82 earlier in the session.
Currency and Bond Developments
The Canadian dollar made gains against the U.S. dollar. Early trading saw the loonie fluctuate between 72.23 and 72.52 US cents.
- Over the past month, the Canadian dollar saw a decline of approximately 0.86% against the greenback.
- The U.S. dollar index fell 0.21% to 98.43, marking its most significant drop in over a month.
- The euro rose by 0.1% to US$1.1738, while the British pound dipped slightly by 0.02% to US$1.3438.
In the bond market, the yield on the U.S. 10-year note reached 4.302%.
Upcoming Economic Reports
Several economic indicators are set to be released today that may influence market movements:
- 8:30 a.m. ET: President Trump’s speech in Davos.
- 8:30 a.m. ET: Canada’s industrial product and raw materials price indexes for December.
- 10:00 a.m. ET: U.S. pending home sales for December, with expectations of a 1.0% decline.
- 10:00 a.m. ET: U.S. construction spending for October, projected to rise by 0.1% month-over-month.
These events are critical as they will provide further clarity on market dynamics amidst current investor uncertainty.
