- Commodities in the spotlight; gold and silver print fresh all-time highs
- Oil climb stops, as Trump “likes the price of oil at $53 a barrel”
- Dollar rally pauses; focus shifts to a busy Fedspeak and data calendar
- Japanese bond yields surge, dollar/yen reaches intervention zone
Geopolitics in the spotlight
Investor nervousness persists as US President Trump remains on the war trail. With the situation in Iran remaining critical and scarce reports pointing to an aggressive crackdown on street protests, the US President announced that help is on the way to protesters. That said, military action might have the opposite effect of pulling Iranians together against a common enemy, thus temporarily diffusing the civil unrest.
Financial markets continue to monitor these developments, with gold, silver and oil making headlines. Gold is posting a fresh all-time high daily – also benefiting from the current Trump-Powell spat – while silver has climbed to $91.54, up 26% already in 2026, acting like a meme coin. Interestingly, helped by another drone attack in the Black Sea and Trump’s warmongering, oil rose to a two-month high, testing the resistance set by $61.62 and the 100-day simple moving average.
The oil rally has paused at the time of writing, partly due to Trump stating that “he would like the price of oil at $53 a barrel”. Considering that most shale oil wells are unprofitable at this level, is the US President aiming to harm oil producers like Russia, or is he preparing for the November midterm US elections by keeping oil prices low?
Could the US Supreme Court announce its tariff ruling today?
Meanwhile, every time the US Supreme Court is scheduled to announce rulings on open cases, markets anticipate that judges will issue their opinion on tariffs. Hence, there is growing speculation that this might take place today. A positive ruling would please Trump, allowing him to further utilize tariffs as a means to achieve his targets, for example Greenland.
On the other hand, a negative ruling would prove more market-moving, resulting in an acute risk-off reaction. While the current tariffs would likely remain in place using another piece of legislation if the Supreme Court were to set boundaries to the President’s powers, essentially forcing him to gain approval from Congress first, it would make Trump even more unpredictable going forward.
For now, though, there seems to be progress in US-China trade relations, following reports that the US has decided to make it easier for Nvidia to export its H200 chips to China.
Fedspeak in focus as Trump’s attacks multiply
With Trump repeatedly attacking Fed Chair Powell, Fedspeak continues at full force, with most FOMC members, up to now, siding with Chair Powell in the current spat with Trump, partly by not endorsing rate cuts at this stage.
Today’s Fedspeak includes regional Fed Presidents Williams, Bostic, Kashkari, and Paulson, along with board member Miran. Understandably, all eyes are on NY Fed’s Williams for his economic analysis, but also on whether Miran expresses an opinion on the Fed probe, supporting Powell.
Data releases have taken a back seat; earnings commence
Following the uneventful US CPI release, with the market still pricing in 54bps of easing in 2026 with the first 25bps move priced in for July, the focus shifts to producer price data and retail sales. With JPMorgan CEO Dimon appearing somewhat upbeat about the US economy post-earnings, disappointing retail sales figures today could prove market-moving, potentially reversing the dollar’s recovery against the euro, which paused after the strong Chinese trade data.
Finally, US banks continue to report their Q4 and full-year earnings results this week, amidst commentary from Trump about imposing a cap on credit card interest rates.
Dollar/yen reaches intervention levels
Both Japanese yields and the yen have not taken lightly reports that PM Takaichi is preparing to call snap elections to restore the LDP’s majority in the Lower House, with February 8 now touted as the election date. The 10-year yield has surged to the highest level since 1999, and dollar/yen has entered the intervention territory. Upside pressure on both yields and the yen could persist until the BoJ actively intervenes, and/or Takaichi decides to back down from calling a new election, which looks unlikely at this stage.