- US index futures are extending yesterday’s losses, with US100, US500 and US30 down around 0.5%. Before the cash session, US Bancorp and 3M are set to report earnings. After the close, the main focus will be on Netflix, whose shares are down more than 6% year to date and are trading nearly 30% below their all time high. Interactive Brokers and United Airlines are also due to report.
- Sentiment in Europe is weak as well, after the region posted its worst session since mid November yesterday. Germany’s DE40 has already pulled back more than 700 points from its record high and is down nearly 0.7% ahead of the European open. Investors’ attention is starting to shift toward the World Economic Forum agenda in Davos, with Trump’s speech scheduled for tomorrow.
- On the macro side, the spotlight today is on UK labour market data, Germany’s ZEW sentiment survey, and US ADP private payrolls. Later today, the US Supreme Court may also issue a ruling on tariffs.
- Gold has broken to fresh record highs, and markets are showing a classic rotation into safe havens. Silver gained strongly alongside gold, reaching new all-time high although today it is down more than 0.7% today despite a 0.8% gain in gold.
- US Treasuries fell, in line with a broader global selloff in bonds. Investors have become more cautious toward US assets as trading resumed in the US after Monday’s break.The key source of market anxiety is Donald Trump’s tariff threats, including Greenland-related remarks, which have revived fears of escalating trade tensions and put market confidence to the test after the earlier AI-driven bullrun. Fitch Ratings warned that the Greenland issue increases geopolitical risk in Europe.
- Asian equities were also under pressure, with stocks down around 0.4% and the tone across markets clearly cooling. Japan was a particular focus, with the 40-year government bond yield rising to 4%, its highest level since the instrument was introduced in 2007. The People’s Bank of China kept interest rates unchanged at 3.5%.
- Longer-dated debt saw the biggest move. The US 30-year yield rose by around 4 bps to 4.88%, signalling lower bond prices. The dollar index slipped to its lowest level in two weeks, reinforcing the deterioration in sentiment toward US assets.
- In Japan, another sign of weaker demand for government debt was soft demand at a 20-year bond offering, below the 12-month average. The bond selloff was broad-based: prices fell in Australia and New Zealand, and German bund futures also weakened, confirming the global nature of the move.
- Oil is edging lower, while US Henry Hub natural gas (NATGAS) futures are extending their rally, up more than 3% today.
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