Market Quick Take - 22 January 2026

SAXO

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Summary:

Equities: Wall Street bounced hard; Europe steadied after early jitters; Asia was mixed as Hong Kong tech rebounded.

Market drivers and catalysts

· Equities: Wall Street bounced hard; Europe steadied after early jitters; Asia was mixed as Hong Kong tech rebounded.

· Volatility: VIX lower, near-term stress fades, headline risk persists

· Digital assets: Bitcoin near $90k, Ethereum steady, crypto lagging equities

· Currencies: USD rebounds on easing US-Europe tariff worries, AUD strongest after robust jobs report.

· Commodities: Gold's haven status holds firm while heating demand drives diesel and natural gas sharply higher

· Fixed Income: Japanese government bonds rally sharply again. US treasuries rallied modestly as well.

· Macro events: US Nov Personal Spending & Eurozone Jan Consumer Confidence

Macro headlines

· The geopolitical temperature cooled after Trump abandoned his tariff threat against European countries, while announcing a framework agreement with NATO Secretary General Mark Rutte regarding Greenland, thus forgoing punitive tariffs on European nations. Earlier, at the World Economic Forum in Davos, he stated he wouldn't pursue acquiring Greenland by force, while Denmark still rejected Trump's request to negotiate a US takeover of Greenland.

· Australia Dec. Employment change was in at +65.2k vs. +27 expected and the unemployment rate for the month dropped to 4.1% vs. 4.3% expected. This sent short Australian rates rising sharply in greater anticipation of a rate hike from the RBA as soon as their next meeting on February.

· US pending home sales dropped 9.3% in December 2025, the largest decline since April 2020, and ended a four-month gain streak. All regions fell, notably the Midwest (-14.9%) and West (-13.3%), with a 3.0% year-over-year decrease. NAR Economist Lawrence Yun cited low inventory and hesitant buyers as factors.

· Canada's producer prices fell 0.6% MoM, with decreases in energy and petroleum prices contributing to the steepest drop in seven months. Lumber prices also fell, while non-ferrous metal prices rose. In December 2025, year-on-year producer prices increased 4.9%, down from November's 5.9%.

· Japan's trade surplus decreased to JPY 105.7 billion, missing the expected JPY 357 billion. In December 2025, exports grew 5.1% year-on-year to JPY 10,411.5 billion, while imports rose 5.3% to JPY 10,305.8 billion, reflecting strong year-end demand.

Macro calendar highlights (times in GMT)

0900 – Norway Rate Decision (expect unchanged)1330 – US Weekly Jobless Claims1500 – US Nov Personal Spending1500 – Eurozone Jan Consumer Confidence

Earnings events

· Today: Visa, LVMH, SK Hynix, Procter & Gamble, GE Aerospace, Intel, Abbott Laboratories, Intuitive Surgical, KLA Corp, Capital One Financial, Freeport McMoRan, CSX Corporation

· Friday: SLB

Equities

· USA: The Dow Jones Industrial Average rose 1.2% to 49,077.23, the S&P 500 gained 1.2% to 6,875.62, and the Nasdaq Composite added 1.2% to 23,224.82, as a broad rebound followed the prior day's selloff. Risk appetite improved on hopes that U.S.-Europe tariff tensions eased, and small caps led with the Russell 2000 up 2.0% to 2,698.17. Halliburton jumped 4.1% after an earnings beat, United Airlines rose 2.2% after results and 2026 guidance topped forecasts, Apple added 0.4% on reports of a major Siri overhaul, while Netflix fell 2.2% as investors weighed softer margin guidance and its Warner bid.

· Europe: The Euro STOXX 50 slipped 0.2% to 5,882.88 and the STOXX Europe 600 was flat (0.0%) at 602.67, as early trade jitters around U.S. policy headlines faded into the close. Losses in software and data names weighed, with SAP down 1.5% as investors debated whether generative artificial intelligence could pressure pricing, and Experian down 4.9% despite reporting solid underlying revenue growth. Burberry rose 5.0% after beating holiday sales expectations, while Rio Tinto gained 5.2% after strong quarterly production results, and markets kept one eye on policy signals from Davos and the next wave of earnings.

· Asia: Hong Kong's Hang Seng Index rose 0.4% to 26,585.06, South Korea's Kospi added 0.5% to 4,909.93, while Japan's Nikkei 225 slipped 0.4% to 52,774.64 and Australia's ASX 200 fell 0.4% to 8,782.90. Sentiment improved in Hong Kong as regulators moved to curb volatility and misleading disclosures, helping tech and consumer names rebound. China Vanke jumped 4.6% after bondholders agreed to defer repayment on a 1.1 billion yuan bond, ASMPT rose 4.3% as it explored strategic options, and Alibaba gained 2.2% while SMIC advanced 3.7% as broader tech appetite recovered.

Volatility

· Market volatility eased further after yesterday's rebound in equities, but pricing still reflects a cautious mindset rather than full relief. The VIX closed at 16.9, with very short-dated measures such as VIX1D near 12, signalling that immediate stress has faded. However, the 9-day VIX around 15.9 suggests investors remain alert to headline risk, particularly around geopolitics, trade rhetoric, and key US data releases later this week.

· Based on current options pricing, the S&P 500 is expected to move about ±57 points (±0.8%) into Friday, pointing to a more contained, but still meaningful, risk range for the remainder of the week.

· 0DTE skew indicator (today's expiry): options pricing shows calls slightly more expensive than puts around the current index level. This inverted skew suggests investors are paying relatively more for short-term upside exposure than for immediate crash protection, a pattern often seen after sharp rebounds when confidence improves, but conviction remains fragile.

Digital Assets

· Digital assets are stabilising alongside broader risk markets, but continue to lag the strength seen in equities. Bitcoin is holding close to the $90,000 level, while Ethereum trades just above $3,000, with major altcoins such as Solana and XRP modestly firmer. The overall tone is constructive, but cautious, with gains failing to fully follow the equity rally.

· For investors, the most important signal remains ETF flow dynamics. Recent outflows from Bitcoin and Ethereum spot ETFs, including IBIT and ETHA, indicate that institutional demand has yet to return in a sustained way. That backdrop helps explain why price moves remain choppy rather than trending. Until ETF flows stabilise or turn positive again, rallies in crypto are likely to remain liquidity-driven rather than conviction-led.

Fixed Income

· Japan's government bonds found strong support again Thursday as yields fell for longer-dated JGB's, especially for 10-year and longer maturity debt. The 10-year benchmark yield dropped back another some four basis points to 2.24%, now some 12 basis points from the spike high on Tuesday, while the benchmark 30-year by late Thursday had backed out more of the spike in yields on Tuesday, trading late in Tokyo's Thursday session down five basis points near 3.68%. Short Japanese yields are close to unchanged with almost no anticipation of a rate hike at the Friday BoJ meeting.

· US treasuries rallied Wednesday, perhaps in part by a stabiliation in the unsteady Japanese bond market. While benchmark 2-year yields remain pinned just below the key 3.60% area, the benchmark 10-year yield dropped back below 4.25% Wednesday from multi-month highs just above 4.30% the prior day.

Commodities

· Gold's safe-haven credentials were only briefly challenged after Trump, together with NATO, announced a "framework" deal on Greenland, marginally lowering the geopolitical temperature. However, Trump's speech in Davos left little doubt that the global landscape has changed, continuing to support demand for hard assets. Gold has so far retraced just USD 60 of a nearly USD 300 rally since Friday, while Goldman Sachs raised its year-end forecast to USD 5,400.

· Silver has seen a slightly deeper pullback, but losses have been capped by ongoing reports of strong retail demand in Turkey, India, and China, where buyers are willing to pay elevated premiums as refiners scramble to meet demand. That said, the risk of industrial demand destruction may slow its advance. The gold-silver ratio remains one to watch for direction.

· Crude trades steady near the upper end of its current range, with WTI trading above USD 60 and Brent above USD 65, supported by a +7% weekly jump in distillate prices as record-breaking cold across the U.S. lifts demand for diesel and heating fuels. Natural gas has been the standout, continuing its sharp rally to around USD 5.30, up 70% since Friday.

Currencies

· The US dollar rebounded slightly on Wednesday in the wake of Trump's more conciliatory tone on Greenland and tariffs on EU countries. EURUSD dipped back below 1.1700, trading 1.1690 in late Asian hours Thursday after a 1.1670 low.

· USDJPY surged back higher on broad yen weakness as the rally in Japanese bonds failed to provide a sentiment boost for the currency, hitting session highs late in Asia's Thursday session at 158.85. EURJPY was testing all-time highs above 185.50.

· AUD jumped higher across the board on strong jobs data (see above). AUDUSD rose above 0.6800 at one point in Thursday's Asian session, its highest level since October of 2024. Odds for a 25-bp rate hike at the next RBA meeting on Feb. 3 have risen above 50% after this data.

Source: SAXO

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