Authored by Joseph Lord via The Epoch Times,

A federal judge has blocked the government from searching data obtained in a raid last week on the home of Washington Post journalist Hannah Natanson.

The order from U.S. Magistrate Judge William B. Porter comes after the federal government on Jan. 14 executed a search warrant at Natanson’s home. According to The Washington Post, federal authorities seized a phone, two laptops, a recorder, a portable hard drive, and a Garmin watch during the raid.

The Standstill Order granted by Porter specifically says that the government must “preserve but … not review” the materials obtained in the raid while litigation on the matter moves forward.

An additional motion filed by Natanson and The Washington Post called on the court to order the government to return Natanson’s seized materials. Oral arguments on this motion will be held Feb. 6, with the court holding off on any intervention until then.

The brief order contains no discussions of the case’s merits or arguments, which will be delayed until after the Feb. 6 hearing.

Federal authorities say the search warrant was part of an investigation into a national security leak.

Aurelio Perez-Lugones, a government contractor with top secret security clearance, is at the center of the investigation. According to the FBI, Perez-Lugones is believed to have brought classified information from his job to his home.

In a criminal complaint, the FBI said it found documents marked “secret” and described as “related to national defense” in his basement, lunchbox, and car.

The raid on Natanson was related to this leak, though additional details on the nature of the information have not been provided.

“This past week, at the request of the Department of War, the Department of Justice and FBI executed a search warrant at the home of a Washington Post journalist who was obtaining and reporting classified and illegally leaked information from a Pentagon contractor. The leaker is currently behind bars,” Attorney General Pam Bondi wrote in a post on X.

“The Trump Administration will not tolerate illegal leaks of classified information that, when reported, pose a grave risk to our Nation’s national security and the brave men and women who are serving our country.”

First Amendment Concerns

Meanwhile, critics of the move—including The Washington Post—say that the unprecedented raid represents a major threat to First Amendment protections related to freedom of speech and freedom of the press.

According to the Reporters Committee for Freedom of the Press—which tracks issues affecting First Amendment freedoms as they relate to members of the media—the raid on Natanson’s home marks the first time in U.S. history that the Department of Justice (DOJ) has raided a journalist’s home in connection with a national security leak.

The president of the organization, Bruce Brown, described the raid as “a tremendous escalation in the administration’s intrusions into the independence of the press.”

Following the raid, The Washington Post immediately filed to have the materials returned, citing First Amendment protections and federal statutes that provide extra legal protections to journalists.

“The federal government’s wholesale seizure of a reporter’s confidential news-gathering materials violates the Constitution’s protections for free speech and a free press and should not be allowed to stand,” The Washington Post wrote. “It … flouts the First Amendment and ignores federal statutory safeguards for journalists. The seizure chills speech, cripples reporting, and inflicts irreparable harm every day the government keeps its hands on protected materials.”

The petition called for the court to “order the immediate return of all seized materials. Anything less would license future newsroom raids and normalize censorship by search warrant.”

Privacy Protection Act

Under the Privacy Protection Act of 1980, specific procedures are mandated for obtaining notes, communications, and other work-related data from journalists, requiring that these materials be obtained via a subpoena related to an ongoing criminal investigation.

Subpoenas can also be challenged in court before being executed, in contrast to a search warrant, which is generally only able to be challenged after the fact.

The Privacy Protection Act prohibits the use of standard search warrants as grounds for such a raid.

The bill was passed specifically to overturn a 1978 Supreme Court ruling in Zurcher v. Stanford Daily. In that instance, police had raided a newsroom with a standard search warrant, which the Supreme Court ruled lawful.

Congress, disapproving of the ruling, passed the Privacy Protection Act to make it more difficult for the government to obtain journalistic materials.

The Washington Post cited the statute in its filing, writing that returning the materials is justified as “much of it is protected by the Privacy Protection Act.”

The DOJ has been given until Jan. 28 to file a response to the suit.

Following Dinesh D’Souza and Dave Smith’s clash on what really is America First last week, fault lines were largely drawn on geopolitical lines. Core differences between the Carlson-Gaetz-Bannon and Shapiro-Levin-Loomer camps of the conservative movement lie on issues like the U.S. relationship to Israel, the capture of Maduro, with some GOP hawks still supporting intervention in Eastern Europe.

Given the divide is on these grounds, the question is: How has Trump done on foreign policy in his second term?

Answering this question, tonight we’ll host Trump’s former National Security Council Chief of Staff Fred Fleitz against Libertarian Institute founder and antiwar.com editor Scott Horton covering South America to Middle East to Europe to Asia.

What the President does with Iran in the face of Israeli and neocon pressure may be a key question in the coming days.

The only reason America doesn’t have good relations with Iran is because Israel forbids it. https://t.co/MgxCeUngXC

— Scott Horton (@scotthortonshow) January 20, 2026

Horton is firmly is the “stay the hell out” corner while Fleitz recently made his call for intervention known, citing agreement with former Speaker of the House Newt Gingrich:

“The demonstrations may have stopped or ebbed because security forces are shooting at even small groups of people who gather on the street. Iran’s FM yesterday told Fox that executions were off for Wednesday and Thursday but could not say about Friday. Other Iranian officials seem determined to begin executions. The regime is blaming the US, Israel, and drug traffickers  for the protests. Iranian officials are sending large funds out of the country. The US reportedly is moving military assets into the region, including the USS Lincoln aircraft carrier. I agree with Newt Gingrich that the Iranian regime is not about to fall but is struggling to survive.  I also agree with Newt that the Iranian people cannot overthrow the regime without outside help. Iran will never be the same after this brutal crackdown. The fall of the regime is within sight.”

My take on the current situation in Iran.

The demonstrations may have stopped or ebbed because security forces are shooting at even small groups of people who gather on the street.

Iran’s FM yesterday told Fox that executions were off for Wednesday and Thursday but could not…

— Fred Fleitz (@FredFleitz) January 15, 2026

Another open question of Trump’s foreign policy is the fate of Greenland. Hosting will be David Rand from the Human Reaction podcast.

We’ll see you tonight at 7pm ET, live on the homepage, X, and YouTube.
 

By Michael Every of Rabobank

Green Stocks Land

The Greenland crisis was logically always likely to end quickly, to market approval, due to European geostrategic weakness, but still herald a new world order that markets don’t understand and won’t like once they do. That’s exactly how it’s now played out.

At Davos, President Trump ruled out the use of force but gave Europe and NATO an ultimatum on Greenland: within hours, a ‘framework deal’ was struck and threatened US tariffs on eight EU countries have been removed. This reportedly echoes the post-imperial arrangement the UK has with Cyprus. The US gains time-unlimited (Trump: “Forever”) access to areas of Greenland around military bases, as well as concessions for critical minerals, and the island will host the US Golden Dome missile defense shield. There will also be a far greater, permanent European NATO focus on its defense and the Northern Passage.

Those who say TACO all the time will cluck here. Those who see Republicans serve up ‘American Greenland’ cake at a Kennedy Centre event, Trump forcing vastly higher defense spending on all US allies, being paid tariff revenues that aren’t part of any agreed FTA, receiving trillions in pledged inwards FDI which the US will direct, and putting Iran’s nuclear programme under rubble and Venezuela’s Maduro in a New York courtroom, will argue it’s Europe that yielded, and will be forced to spend even more on Arctic defence, and to move even further under a US shield and a critical minerals processing compact, not its own independent ones.  

For markets, that’s the good news. The bad news is that the liberal world order is shattered.

Trump didn’t invade – and he was never going to except in some fevered imaginations. Yet he demonstrated to Europe he could, as could others in the future, and there’s presently nothing they can do about it. That’s how the world always worked until the past few decades, and it’s how it will work again going forwards.

For example, as Europe looks north-west, this week saw the US suddenly withdraw support for the Kurdish region of Syria that has thrived in recent years as it opts to back the former-jihadi Syrian president instead: there are already reports of appalling violence being inflicted on Kurds there. If Europe noticed that development to its south-east, it’s completely powerless to do anything about it if it disagrees – which isn’t clear at all either.

Moreover, on top of trade, energy, tech, finance, and NATO/Ukraine as points of relative European geostrategic weakness, once one accepts realpolitik, consider that if Europe ever ‘pivots to China’, as some have whispered, the US can ‘pivot to Russia’ and arm it against Ukraine and Europe. If Europe thinks it has that China card in its pocket, it needs to be aware that the US still has more of them.

That’s hardly the foundation for a solid Western alliance. Indeed, even with tariff threats removed, the European establishment loves America but in private evidently wishes Trump were gone – ECB President Lagarde walked out of a Davos dinner after anti-EU barbs from US Commerce Secretary Lutnick. Equally, the US President states in public that he loves Europe and his admin that they wish its establishment was gone (see the NSS). So where to from here?

Logically, leaderships could change. November 2026 looms, as does the French presidential election in April 2027. Yet some genies aren’t so easily put back into bottles.

As such, it’s down to the realpolitik of who has the best cards. Canada’s PM Carney, who didn’t meet Trump at Davos, earlier made a much-publicized speech which stated: “Many countries are drawing the same conclusions – that they must develop greater strategic autonomy: in energy, food, critical minerals, in finance and supply chains. And this impulse is understandable. A country that can’t feed itself, fuel itself or defend itself has few options. When the rules no longer protect you, you must protect yourself.” That sounds exactly like Trump.

Yet as George Magnus points out, Carney citing Czech anti-communist dissident Vaclav Havel’s ‘The Power of the Powerless’ to call out Trump and the polite hypocrisies of the liberal world order doesn’t sit easily with him heading to China to strike trade deals. That’s Trump’s game, played with far weaker cards. Today, the powerless are… powerless.

Indeed, Trump noted from the Davos stage: “Canada lives because of the United States. Remember that, Mark, the next time you make your statements.” As the Canadian press puts it, ‘At Davos, a new great game dawns for the world. Which way, Canada?’ And all of us.

In the short term, green land – because TACO, or because Europe in 2026 is Egypt of 1956. In the long term, it’s unclear – and starkly binary.

Europe and others can try to go their own way. For example, Spain just urged the EU to create a joint army. Yet that’s the same Spain that adamantly refuses to spend 5% of GDP on defence within NATO. Talk is cheap. Preparation for war, or for strategic autonomy, is mind-blowingly expensive, and the US can block these moves every step of the way. Or European disunity can block itself: the European parliament just voted for the new EU-Mercosur deal to be given judicial review, which will delay it for a year. Trump deals seem to get agreed on a handshake or a tweet.

Or Europe and others will see policy after policy directed by the US. Consider the EU just watered down its green rules to ensure it can keep flows of Qatari LNG; and symbolically, the World Economic Forum is considering moving from Davos to new places. Like Florida?

Long-term planning is going to be very hard if you don’t know who is doing it for you – the US, or Europe – or China?

Domestic politics will also twist and turn in tandem. In Australia, the opposition coalition between the Liberals and the Nationals has just shattered again for the second time in a year. This time, it may not come back together as One Nation surge in the polls.

In markets, at Davos, ‘Wall Street Chiefs Try to Lay Low to Avoid Trump’s Trolling’ says Bloomberg, which summarises the mood.

Eyes are on the Supreme Court, which in hearing oral arguments expressed scepticism over Trump’s bid to sack Lisa Cook from the Fed, with specific mention of the importance of its independence. That Trump front matters as much, if not more, than Greenland, and potentially opens up a new world order to the same extent. If he wins there it would again mean green land at first, because “rate cuts!”, but then serious questions over what/where next.

There is also relative calm in Japan, which is also in the green following efforts to stabilize things after the wild volatility in JGB markets this week. That trend, which some try to paint as “a quarrel in a faraway land between people of which we know nothing”, with no implications for sensible developed markets like Europe, is also a warning. Japan just ran its fifth consecutive annual trade deficit in 2025, and it’s that development –alongside “it’s baaack” inflation– which is undermining its ability to stabilize its markets without relying on the kindness others.

That structural threat looms ahead for many economies and is another reason why they need to not only be ‘resilient’ but to run trade surpluses —which obviously not everybody can– or find a bloc they can sit within that will support them. And sometimes that choice is made for them.

Crowds of Canadian citizens stood in long lines across Alberta for hours this week to sign a petition for a referendum on leaving Canada – officially titled “A Referendum Relating to Alberta Independence.”  The petition requires at least 177,000 signatures in order to trigger the referendum, which would ultimately decide if the province will separate.

Petitions have 120 days to collect the signatures needed.  Pro-separation groups say they could get as many as 1 million signatures, which would be a clear indication that Alberta will leave Canada.  Alberta’s population is currently 5 million people.

Some petition locations reported as many as 10,000 signatures in a day and the public response is described as “concerning” by critics who want to remain part of Canada’s “constitutional monarchy.”  Alberta is widely considered the most conservative province in the country and has been at odds with the far-left Canadian government (ruled by Ontario progressives). 

The referendum would mean a simply Yes/No question for voters on separation.  A majority (51% or more) would then lead to a legal process overseen by the Canadian federal government.  Come polls indicate that 60% of Albertan citizens are still opposed to the measure, however, the recent turnout for the petition suggests the tide is turning.  Recent conflicts with progressive elites in the Canadian government have driven Albertans to question their relationship. 

Alberta fought against the leftist government’s pandemic lockdowns, church and business closures and draconian vaccination requirements.  They remain in opposition to Canada’s new gun laws which are incrementally removing all firearms from private hands.  They have also been at odds with the federal government over resource development, energy policy, carbon taxation and economic marginalization. 

Essentially, Alberta is a different nation when compared to the Canadian norm.  It is also a commodity treasure trove that Canada exploits to feed its coffers while rarely giving anything back to provincial citizens. 

Wow, an absolute insane lineup of people – that goes entire city blocks – of people in Calgary waiting to sign a petition to make Alberta an independent sovereign nation. pic.twitter.com/HqB1xaJRs8

— Keean Bexte (@TheRealKeean) January 11, 2026

Canadian courts initially blocked a referendum question on separation, asserting that the implications of the question were too vague and did not align with constitutional requirements.  Instead of appealing the decision, Alberta turned to the legislature. Within days, the legislature passed Bill 14, amending the Referendum Act to remove the requirement that referendum questions align with the Constitution.  Separatists quickly got a revised referendum question approved, and the petition process resumed

Another obstacle to the separation is a lawsuit brought by the Sturgeon Lake Cree Nation goes far beyond provincial politics. The First Nation is seeking an urgent injunction to stop Alberta’s petition process.  They say a separation would be in violation of their original treaty with the Crown.  The claim sets up a possible loophole allowing the federal government to deny separation, but the notion that a Native treaty supersedes provincial law is rather thin.  Alberta’s separation would simply mean that the Cree would have to negotiate a new treaty.

Arguments against the referendum say that Alberta is “landlocked”, which would make its separation economically disastrous.  This is not entirely true.  Their shared border with the US and newfound sovereignty would allow the province to establish more significant oil pipelines (pipelines which the Canadian government has consistently blocked in the past).  This development along with greater resource exploration and an alliance with American interests would make Alberta one of the wealthiest regions in the western hemisphere.

Furthermore, Alberta stretches within 700 miles of the arctic, an area of the world which is quickly becoming central to geopolitics.  Early warning systems and NORAD bases in Alberta are integral to US security.  These bases could be shut down in the event that conflicts between Canada and the US escalate.  A free Alberta could become vital to US defense.

The debate over US ownership of Greenland is only one element of a larger global shift to the North.  Alberta’s exit from Canada and potential alliance with the US could have vast implications for international relations.       

US natural gas futures are ripping higher, up roughly 75% in just three trading days, and are on pace to post the largest weekly gain on record.

The move has all the signs of a classic winter-driven short squeeze, with traders scrambling to cover as a polar blast descends into the Lower 48.

An intense Arctic blast and a sprawling winter storm system, drawing comparisons to the Blizzard of ’96, are set to sweep across the eastern half of the US this weekend.

Weather models point to prolonged sub-freezing temperatures, raising the risk of freeze-offs in the Appalachian Basin, a critical US NatGas supply region.

Energy research firm Criterion Research was the first to warn that NatGas production disruptions across Appalachia could materially tighten balances at the worst possible time, just as heating demand spikes. Any sustained freeze-offs would not only pressure spot supply but could also stress regional power grids.

Criterion Research explained:

Winter is Coming for Appalachia

This week’s Appalachian nat gas production is already down 1.1 Bcf/d versus last week, and the extreme cold is just getting started.

Pittsburgh overnight lows are headed to -6.8°F at their most intense levels next week, with this cold coming in lower and longer than Winter Storm Elliott (Dec 2022.)

During Eliott, regional production dropped 25-30%.

Winter is Coming for Appalachia
This week’s Appalachian nat gas production is already down 1.1 Bcf/d versus last week, and the extreme cold is just getting started.

Pittsburgh overnight lows are headed to -6.8°F at their most intense levels next week, with this cold coming in… pic.twitter.com/l2oyl80cfe

— Criterion Research (@PipelineFlows) January 22, 2026

We cited Criterion Research on Wednesday (read here), which outlined where the production freeze-offs are likely to emerge.

Production Freeze Offs Coming

The screenshot from our Mapping Analytics Platform below shows all Appalachian production meters in the region (green dots) and processing plants (pink dots) – and the key item to watch is where winter precipitation hits and where the power outages… pic.twitter.com/PjWxQPc3Zo

— Criterion Research (@PipelineFlows) January 21, 2026

At least 175 million people across the Lower 48 will face snow, rain, sleet and ice through the weekend as record-breaking cold pours into the eastern half of the US. Below-zero temperatures are expected to boost heating demand at a time when pipeline freeze-offs could disrupt gas production.

We warned on Wednesday:

Recall Winter Storm Uri in 2021, when extreme cold paralyzed the NatGas supply and collapsed the ERCOT grid in Texas for a week. A scenario like that could be in play in parts of the eastern US, regions where power grids are already tight because of bad ‘green’ energy policies colliding with the era of data centers.

Ole Hvalbye, an analyst at SEB AB, commented on Natty prices ripping higher: “This is a textbook winter-driven squeeze: fast, violent, and sentiment-shifting.”

While it’s ancient history now – even preceding the record long government shutdown – and nobody will care, moments ago the BEA reported that its first revision of third quarter GDP came in a bit hotter than expected as US GDP grew slightly more than initially reported, supported by stronger exports. Due to the recent government shutdown, this updated report for the third quarter of 2025 replaces the release of the third estimate originally scheduled for December 19, 2025, the BEA reported.

Inflation-adjusted gross domestic product increased at a revised 4.4% annualized rate, the fastest in two years, and up 0.1% from the initial estimate, primarily reflecting upward revisions to exports and investment that were partly offset by a downward revision to consumer spending. That said, the change was minuscule: it went up from an unrounded 4.340% to 4.370%.

Compared to the second quarter, the acceleration in real GDP in the third quarter reflected upturns in investment, exports, and government spending, as well as an acceleration in consumer spending. Imports decreased less in the third quarter than in the second. 

Real GDP was revised up 0.1 percentage point from the initial estimate, primarily reflecting upward revisions to exports and investment that were partly offset by a downward revision to consumer spending. Imports were revised up. 

Here is the breakdown: 

• Personal consumption contributed 2.34% to the bottom line, slightly lower than the 2.39% originally reported.
• Fixed Investment added 0.15%, also revised lower from 0.19%
• Change in private inventories was a net improvement, raising from -0.22% to -0.12%, if still subtracting from the bottom line
• Net trade (exports less imports) was also revised favorably up from 1.59% to 1.62%
• Finally, government added 0.38% to the bottom line print, effectively the same as 0.39% before.

And visually:

Real gross output increased 3.2% in the third quarter, reflecting increases of 4.4% for private services-producing industries and 2.1% for government that were partly offset by a decrease of 0.1% for private goods-producing industries. Real gross domestic income (GDI) increased 2.4% in the third quarter, the same as previously estimated. The average of real GDP and real GDI increased 3.4%, the same as previously estimated.

From an industry perspective, the increase in real GDP in the third quarter reflected increases of 5.3 percent in real value added for private services-producing industries and 3.6 percent for private goods-producing industries that were partly offset by a decrease of 0.3 percent in real value added for government.  

Finally, while it’s beyond ancient history now, the price index for gross domestic purchases increased 3.4% in the third quarter, the same as previously estimated. The personal consumption expenditures (PCE) price index increased 2.8 percent, and the PCE price index excluding food and energy increased 2.9%, both the same as previously estimated. A much more timely print of core PCE for November will be reported at 10am today.

Authored by Joseph Lord via The Epoch Times,

The U.S. House of Representatives will vote on a multi-bill package to fund the federal government on Thursday.

The legislation includes funding for the departments of Defense, Homeland Security, Labor, Health and Human Services, Education, Transportation, and Housing and Urban Development.

Most portions of the bill are expected to pass easily as members of both parties seek to avoid a repeat of the 43-day government shutdown, the longest in U.S. history, that accompanied the previous government funding fight.

House Minority Leader Hakeem Jeffries (D-N.Y.) and Senate Minority Leader Chuck Schumer (D-N.Y.) are among those, and both leaders have expressed a desire to work with Republicans to pass the 12 annual government funding bills ahead of the Jan. 30 funding deadline.

Though it includes some spending cuts, the package largely holds funding levels at fiscal year 2025 rates.

Republicans are expected to back the legislation largely along party lines.

Rep. Tom Cole (R-Okla.), the lead Republican on the House Appropriations Committee, praised the bill in a statement, saying it “reflects the core tenets of American strength: combat-ready forces, secure communities, effective education and health systems, and modern transportation. At every level, it applies innovation and discipline to deliver results without waste.”

In line with leadership’s desire to avoid a government shutdown, the sections of the bill related to funding for the departments of Defense, Labor, Health and Human Services, Education, Transportation, and Housing and Urban Development are expected to gain Democratic support as well.

However, one segment of the funding has proven divisive.

DHS Funding Controversy

Ahead of the vote, Democrats came out en masse against the portion of the bill that would fund the Department of Homeland Security (DHS).

Democrats have been increasingly critical of the agency that oversees Immigration and Customs Enforcement (ICE), criticism that has only intensified in the wake of the ICE-involved shooting of Renée Nicole Good in Minneapolis.

In the aftermath of the shooting, Democrats have called for President Donald Trump to back off on the deployment of ICE agents to Democrat-run areas, while the party’s progressive wing has renewed calls to “abolish ICE.”

In Congress, lawmakers have largely urged funding cuts or policy reforms.

While this package includes reforms, several Democrats have indicated that they don’t go far enough and have expressed an intention to oppose the bill.

Despite this opposition, the DHS funding measure is expected to pass with wide GOP support and support from some Democrats.

ICE Reforms

The bill would implement several changes to ICE’s policies and procedures.

One measure in the bill would provide $20 million to ICE for the procurement and deployment of body cameras for ICE and other immigration agents engaged in domestic law enforcement activities. It would similarly require standardization of ICE and immigration agents’ uniforms.

It provides additional funding for civil liberties-related oversight of ICE activities.

The bill would also mandate additional training for immigration agents operating within the U.S. interior, with a focus on de-escalation.

It also instructs DHS Secretary Kristi Noem to ensure that all immigration agents are properly trained on Americans’ First Amendment right to record federal agents during public operations.

It also provides substantially fewer detention beds than were requested by the administration, instead cutting the number. While 50,000 beds were requested, an increase, the bill would cut the total number of detention beds to 41,500, marking a decrease of 5,500 beds.

It also slightly reduces funding for enforcement and removal operations, cutting $115 million.

However, for many Democrats, these reforms don’t go far enough.

Democrats Split

Democrats are split on the issue, though many have expressed opposition to the bill.

Rep. Lauren Underwood (D-Ill.), a member of the House Appropriations Committee, expressed opposition to the bill in a post on X.

“The 2026 Homeland Security funding bill that the House is voting on this week is an easy NO for me. It’s a blank check with no accountability for DHS’s outrageous abuses,” Underwood wrote.

Several other House Democrats on the Appropriations subcommittee have similarly indicated plans to oppose the bill.

However, others have indicated plans to support the bill or have otherwise said they’re undecided.

Rep. Rosa DeLauro (D-Conn.), the lead Democratic appropriator, has said she’ll back the legislation, citing the reforms.

Rep. Henry Cuellar (D-Texas), a moderate in a red-trending district, has also expressed his intention to support the bill.

Following last week’s plunge back below 200k, analysts expected a small rise to 209k this week but the number of Americans filing for jobless benefits for the first time remained flat at 200k. Notably, as is usual at this time of year, non-seasonally-adjusted claims spiked…

Source: Bloomberg

…basically hovering at its lowest levels since 1969…

Source: Bloomberg

New York and Georgia saw the largest drops in jobless claims while Puerto Rico saw a modest increase in claims…

Continuing jobless claims also ticked down (to 1.849 million Americans) – the lowest since November…

Source: Bloomberg

All of which fits with the ebbing of rate-cut expectations for this year…

Source: Bloomberg

…likely much to the chagrin of President Trump.

US equity futures and global stocks are sharply higher as the S&P again marches toward a new ATH while the latest vol spike subsides, after Trump’s tariff pivot eased geopolitical fears, though Greenland and other flashpoints mean the optimistic mood is laced with some caution. As of 8:00am ET, S&P 500 futures rose 0.5% after the benchmark’s biggest advance since November as a relief rally over President Donald Trump’s pivot on Greenland continued, with a flurry of activity in the artificial-intelligence space adding support to tech stocks: Nasdaq 100 futures climbed 0.8% as names linked to the build-out of AI-infrastructure outperformed in premarket trading, while all Mag 7 members advanced in premarket trading with Fins/Industrials also standout performers as Staples are mostly lower. The 10-year is flat 4.24%, dollar similar DYX $99 and Bitcoin same place as yesterday $89.8k. Commodities are mixed: nat gas surges for a third day of follow through up 14% prompt to $5.56 – highest level since late 2022 – on bruising cold across the US, while crude, copper, gold all taking a breather this morning as WTI may fall below $60/bbl. Today’s macro data gives an update on Q3 metrics, November spending / PCE, and new jobless claims. 

In premarket trading, Mag 7 stocks are rallying alongside index futures (Alphabet +2%, Tesla +1%, Microsoft +0.8%, Amazon +1%, Nvidia +0.9%, Apple +0.5%, Meta +1.9%)

• Venture Global Inc. (VG) is up 10% after the company won a dispute with Spain’s Repsol SA involving the sale of liquefied natural gas shipments from its export plant in Louisiana.
• Abbott (ABT) falls 4% after posting fourth quarter results.
• Axogen (AXGN) is down 7% after the health care firm said it will offer $85 million of shares of its common stock.
• Knight-Swift (KNX) falls 2% after the freight transportation company posted fourth quarter earnings that fell short of expectations.
• Mobileye (MBLY) drops 6% after the maker of software and hardware technology for automobiles provided revenue guidance for 2026 missed the average analyst estimate.
• Procter & Gamble Co. (PG) slips 1.6% as growth in a key sales metric stagnated in the latest quarter while volume slipped, showing that US consumers spent cautiously in the final months of the year.
• Rocket Lab (RKLB) falls 2% after the company said qualification testing of the Stage 1 tank resulted in a rupture during a hydrostatic pressure trial.
• Sphere Entertainment (SPHR) rises 3% as BTIG upgrades the live entertainment and media company to buy, citing multiple catalysts driving the stock’s upside potential.

In corporate news, Lululemon’s founder lashed out over the company’s latest product flop, calling it a “total operational failure” that he blamed on the company’s board of directors. GameStop CEO disclosed the purchase of 500,000 shares of the gaming retailer, sending the stock higher in premarket trading. 

The rebound in stocks followed Trump’s announcement of a framework agreement with NATO to end a days-long standoff over Greenland. The rally gained momentum on Thursday as NATO’s chief said the breakthrough didn’t involve discussion of the territory’s sovereignty, easing concerns over a key sticking point, focusing rather on the broader issue of security. 

This week’s events have rewarded TACO trade dip buyers, while also serving as a reminder that volatility is never far away. Fundamentals for 2026 still look excellent, according to Tikehau Capital’s Raphael Thuin. There’s “a rare alignment of stars” going on, with double-digit earnings expected, good economic growth and possible rate cuts.

“Despite a very positive market narrative about 2026, geopolitical crisis and US tariffs can fuel volatility spikes at any time,” said Raphael Thuin, head of capital markets strategies at Tikehau Capital in Paris. “The fast-changing AI industry, like last year, also represents both a big upward potential as much as a potential downward risk.”

Sentiment was also lifted after Japanese bonds rebounded for a second straight session.

Small-cap stocks look set to continue their strong run after outperforming the S&P 500 for 13 straight sessions, with contracts on the Russell 2000 broadly tracking those on the S&P 500 on Thursday.

Meanwhile, the AI narrative is back, with Asian chip stocks surging after Wednesday’s bullish comments on AI spending from Nvidia’s Jensen Huang. The theme is getting more juice from news that Anthropic’s revenue run rate is said to have more than doubled since last summer.  News that Alibaba Group Holding Ltd. is preparing to list its chipmaking arm added to a series of upbeat moves in tech after bullish comments from Nvidia Corp. Details emerged that Anthropic PBC’s revenue run rate has more than doubled since last summer, while OpenAI was locked in talks about a fresh funding round at a marked-up valuation. 

In geopolitics, NATO’s chief said a breakthrough over Greenland was secured without discussing the territory’s sovereignty with Trump, focusing rather on the broader issue of security. Ukraine’s Zelenskiy arrived in Davos to meet with Trump. Speakers at the event today include Elon Musk and Larry Fink. Amid renewed speculation that foreigners may sell US assets, JPMorgan strategists said there’s been little sign of foreign investors shunning US assets amid the Greenland tensions. 

In other assets, Goldman raised its December 2026 gold price forecast by more than 10% to $5,400 an ounce, on the assumption that investors who bought gold as a hedge will maintain positions. Global natural gas prices continue to soar amid freezing weather. A sweeping crypto market bill is likely to be delayed by several weeks as key lawmakers shift their focus to potential housing legislation in support of Trump’s affordability push. 

Out of the 52 S&P 500 companies that have reported so far in the earnings season, 83% have managed to beat analyst forecasts, while 12% have missed. 

PCE data for October and November will likely corroborate evidence that tariff pass-through is fading. That could support the case for rate cuts later in the year. Trump suggested that’s he’s down to just one choice for next Fed chair, and said Rick Rieder and Kevin Warsh are good options.

In Europe, the Stoxx 600 is up 0.9% after four days of declines, with telecoms, construction and auto sectors leading the gains.  Here are the biggest movers Thursday:

• Orsted rallied as much as 5.5% after Oddo BHF upgraded to outperform from neutral, citing a “structural change of regime at the Danish offshore wind developer
• Volkswagen shares rise as much as 6.1% after the German carmaker delivered a positive surprise on free cash flow in its automotive division, driven by improvements in working capital and lower investment spend
• AB Foods climbs as much as 1.5% after the conglomerate reported first-quarter constant currency sales which Shore Capital analyst Clive Black (hold) said were “a bit better” than the group guided for earlier this month
• Aryzta shares jump as much as 14%, the most in more than three years, as analysts see the Swiss baker’s 2025 performance and outlook for the coming year as a first step to regain investor trust
• Baltic Classifieds Group shares rise as much as 6.9% after Morgan Stanley initiates the online classifieds company at overweight, citing its regional leadership position across verticals and a favorable macro backdrop
• Basic resources is the worst-performing sector in Europe on Thursday after copper declined to its lowest intraday level in almost two weeks, weighing on miners
• Essity drops as much as 5.3%, with a miss on sales overshadowing an adjusted Ebita beat by the Swedish personal care products producer
• Bankinter shares decline as much as 2.9%, the only lender declining on the Stoxx 600 Banks Index, after the Spanish bank reported earnings in line with analysts expectations
• Wickes shares climb as much as 2.2% after the home improvement products retailer reported “solid” second-half results, with analysts encouraged by evidence of market share gains

Earlier in the session, Asian stocks advanced, poised to snap a three-day losing streak, after US President Donald Trump retreated from his tariff threat on European nations and investors returned to tech stocks. The MSCI Asia Pacific Index gained 0.7%, boosted by tech shares — including TSMC and Samsung Electronics — after Nvidia CEO Jensen Huang’s comment about AI spending fueled optimism for the sector. South Korea’s stock benchmark Kospi briefly crossed the 5,000-level, a threshold targeted by the country’s president during his campaign last year.

In FX we saw muted moves with the dollar little changed.  The pound was little changed.

In rates, treasuries are little changed, lagging most European bond markets but outperforming gilts, hit by potential UK leadership challenge to Prime Minister Starmer. Focal points of US session include weekly jobless claims and November personal income and spending data — which embeds PCE price indexes — and $21 billion 10-year TIPS auction.  US 10-year yield near 4.24% is within 1bp of Wednesday’s closing level with UK counterpart about 2bp cheaper on the day and Germany’s richer by about 1.5bp. Gilts underperformed European peers after a pathway for a potential leadership challenge against Prime Minister Keir Starmer emerged. 

In commodities, gold erases an earlier decline, trading little changed around $4,830/oz. Oil prices falling, with Brent slipping toward $64/barrel and extending after Trump comments on potential talks with Iran. Gas surged 14% to $5.56, its third day of gains, on freezing cold.

US economic calendar includes third estimate of 3Q GDP and jobless claims (8:30am), November personal income and spending (10am) and January Kansas City Fed manufacturing activity (11am)

Market Wrap

• S&P 500 mini +0.6%
• Nasdaq 100 mini +0.8%
• Russell 2000 mini +0.5%
• Stoxx Europe 600 +1.3%
• DAX +1.4%
• CAC 40 +1.3%
• 10-year Treasury yield little changed at 4.24%
• VIX -0.8 points at 16.07
• Bloomberg Dollar Index little changed at 1205.89
• euro little changed at $1.1687
• WTI crude -1.1% at $59.93/barrel

Top Overnight News

• NATO Secretary General Mark Rutte said Greenland’s sovereignty wasn’t discussed with Trump but that talks centered on Arctic security in a “practical sense.” BBG
• Emboldened by the U.S. ouster of Venezuelan President Nicolás Maduro, the Trump administration is searching for Cuban government insiders who can help cut a deal to push out the Communist regime by the end of the year. WSJ
• US House GOP leaders are struggling to strike a deal with Republican hard-liners tonight that would allow the final government funding package to advance. “The Rules Committee recessed Wednesday evening without a solution. Senior Rs hope to reconvene the panel by 9 pm”: Politico
• Volodymyr Zelenskiy is traveling to Davos to meet with Trump, a person familiar said. US envoys Steve Witkoff and Jared Kushner will go to Russia for talks with Vladimir Putin. BBG
• It took just $280 million of trading to push Japan’s government bond market into meltdown, with a $41 billion wipeout across the Japanese curve. The disconnect between the size of the wipeout and the amount that actually traded shows how Japan’s sometimes illiquid bond market has become a weak spot in the global financial system. BBG
• For the first time since the start of the private-credit boom, large numbers of individual investors are trying to get their money out. Several of the biggest funds eligible to wealthy individuals received requests from about 5% of shareholders to cash out at the end of last year, well above the normal volume, according to SEC filings. WSJ
• South Korea isn’t delaying the first $20 billion tranche of its US investment pledge, Finance Minister Koo Yun Cheol said. Project selection is ongoing, making execution unlikely in the first half. BBG
• Japan’s exports rose a less-than-expected 5.1% in December. South Korea’s economy unexpectedly shrank last quarter. The Malaysian central bank kept its policy rate at 2.75% as expected. BBG
• US natural gas surged to the highest since 2022, jumping more than 70% in three days as brutal cold lifts demand amid short covering. A storm is set to hit starting tomorrow, plunging Texas into a deep freeze that may also disrupt production. BBG
• The Fed will finally get core PCE data for October and November today. Both headline and core inflation are expected to rise year on year, but the monthly figures will probably indicate that tariff pass-through is fading. BBG

Trade/Tariffs

• Switzerland’s Parmelin via X said he had a very constructive talks with USTR Greer.
• UK Business Secretary Kyle said the European customs unions is not currently on the radar of the UK government.
• China’s Commerce Ministry said China is concerned with the EU excluding some of Chinese tech suppliers.

A more detailed look at global markets courtesy of Newsquawk

APAC stocks traded entirely in the green, tracking the rebound on Wall Street after President Trump withdrew plans for additional tariffs on EU countries. ASX 200 opened around +0.8%, lifted by the improved global tone after US tariff removal, though the index later dipped following a hotter-than-expected Australian jobs report. Nikkei 225 posted firm gains of nearly 2%, snapping a five-day losing streak as chipmakers and financials advanced and JGBs stabilised. Hang Seng and Shanghai Comp the laggards, despite a brief recovery tech and easing trade-tension concerns after the US rollback of tariffs.

Top Asian News

• Australia’s Nationals Leader said coalition can no longer continue.

European equities (STOXX 600 +1.3%) are firmer across the board. Sentiment has tracked tailwinds from APAC and Wall St which traded higher after market sentiment was kept at ease following Trump’s Davos speech where he vowed to not use military action against NATO allies and later withdrew tariff plans on some European countries. European sectors are all in the green. Autos takes the top spot, boosted by gains in Volkswagen (+5%) and Michelin (+3.3%) after providing positive trading updates.

Top European News

• German Chancellor Merz said there needs to be significant defence investment.

FX

• DXY is currently flat and trades within a narrow 98.72 to 98.82 range; the low for the day coincides with its 200 DMA. Some further pressure in the index could see the test of its 100 DMA (98.69).
• Focus this morning has been solely on US President Trump, who provided updates on both Greenland and the Fed. Starting with the former, Trump mentioned that he had a very productive meeting with NATO’s Rutte, and they have formed a framework for a future deal. Notably, Trump announced that the scheduled tariffs on eight European countries would not go ahead – leading to a familiar “TACO” trade to take place across markets. Elsewhere, on the Fed, Trump said he would like to keep NEC Director Hassett when he is, and now has two or three left in mind for the Chair role. This follows familiar commentary from last Friday, which spurred some strength in the Dollar as markets come to terms with a potentially less dovish appointment; Polymarket odds show Warsh (44%) as the favourite, Rieder (31%) and then Waller (14%).
• G10s are broadly firmer against the Dollar; Antipodeans lead with clear outperformance in the AUD after a hotter-than-expected jobs report. Elsewhere, the JPY is the G10 underperformer this morning, and trades within a 158.17 to 158.89 range; high for the day marks a WTD peak, though still shy of its YTD high at 159.45. Overnight pressure in the JPY was attributed to December exports/trade balance missing expectations. Since, the JPY was mildly strengthened on reports that Japan now forecasts the primary balance to be in a deficit (prev. forecast surplus) in FY26. At face value, a negative, but perhaps given the relatively small deficit amount, eases recent fiscal-related fears.
• Finally, Norges Bank kept rates steady at its January meeting and largely reiterated the commentary/guidance from the December confab. As such, there was little reaction in EUR/NOK.

Fixed Income

• A relatively contained start for fixed income after a tumultuous first few sessions of the week.
• As it stands, the complex is awaiting geopolitical updates from the numerous meetings and briefings scheduled for today, the first of which is due now at the Peace Board signing with President Trump. From these, we look for clarity that the TACO narrative around Greenland is correct, and if the reporting around a deal like the one the UK has with Cyprus is correct.
• For fixed, this leaves USTs and Bunds firmer with gains of three and 13 ticks respectively. Just eclipsing Wednesday’s 111-22 best for USTs, while Bunds have a little way to go to first recoup the 128.00 figure and then get to Wednesday’s 128.25 high.
• Gilts outperform, on the back of a smaller-than-expected level of UK borrowing in December. The latest PSNB figure of GBP 11.6bln was around GBP 2.5bln below consensus. Despite the elevated level and still precarious state of UK finances, the December print has been enough to lift Gilts by 39 ticks at best to a 92.12 peak, eclipsing Wednesday’s 92.04 best but still shy of the 92.51 WTD peak from Monday.

Commodities

• Crude is on the backfoot, as the TACO trade takes the sting out of a near-term escalation on Greenland. However, we still wait to see details on how the deal will be done and exactly what the US will walk away with and demand; initial reporting suggests it will be similar to the UK-Cyprus arrangement. Further pressure also stemming from the Private inventory report, which posted a larger-than-expected headline crude build. WTI and Brent down to USD 60/bbl and USD 64.57/bbl, lower by c. USD 0.60/bbl.
• European gas is on the back foot, lower by around a EUR/MWh for Dutch TTF. However, this comes after the benchmark extended to a EUR 41.92/MWh peak early doors, a move driven by US NatGas settling higher by some 25% on Wednesday, alongside continued focus on the European & APAC cold spell.
• Spot gold has been tarnished by the removal of near-term risk premia by Trump’s tariff U-turn. However, the numerous geopolitical meetings and opportunities for commentary today mean a return of premia is a real possibility. As it stands, XAU is holding at USD 4822/oz, having recovered from the USD 4772/oz overnight low but pushed lower once again in recent trade after the PBoC commentary that they will be increasing their supervision of the gold market.
• US Energy Secretary Wright said global oil production would need to more than double to meet rising demand and prevent energy poverty.
• US President Trump is reportedly personally controlling the release of funds generated from Venezuela’s oil, Semafor reported citing an official.
• PBoC to reportedly strengthen supervision of the gold market, via Xinhua.
• Japanese copper smelters reportedly remain in discussions over charges for 2026 with miners.
• China’s UBS SDIC silver futures fund will be suspended form market open until 10:30 am local time (2:30am GM) on the 23rd January.
• MMG (1208 HK) reported Q4 copper production of 108.6k/T of output, -7% Y/Y.
• Goldman Sachs raises its year-end gold price target to USD 5,400/oz (prev. USD 4,900/oz).
• US Private Inventory Data (bbls): Crude +3.0mln (exp. +1.8mln), Distillate -0.03mln (exp. -0.2mln), Gasoline +6.2mln (exp. +2.5mln), Cushing +1.2mln.

Geopolitics: Ukraine

• Russia’s Kremlin said meeting between US envoy Witkoff and Russian President Putin will be after 7-8pm Moscow time.
• US President Trump and Ukrainian President Zelensky are set to meet at 12:00 GMT, via a Spokesman.
• US envoy Witkoff said a lot of progress has been made on Ukraine, getting to the end. Believes tariff free zone would be a gamechanger.
• Ukraine’s top negotiator Umerov said he met with US envoys Witkoff and Kushner, discussed security guarantees and post-war reconstruction.

Geopolitics: Middle East

• A Palestinian source said there is an understanding between Hamas and the US administration that the organization will hand over its weapons and tunnel maps in exchange for recognition as a political organisation, via Sky news.
• US ambassador said all options are on the table [on Iran] and President Trump will keep his promise.
• Israeli military source quoted by local press: “The US military is mobilizing large capabilities in the region in preparation for the possibility of a large-scale confrontation with Iran”, Sky News Arabia reported. “Concern in Tel Aviv that Washington will strike Iran hard at first and then withdraw its forces quickly and leave Israel facing a new reality on the ground”. “Tel Aviv doubts the ability of the United States to find a real alternative to the Iranian regime in the event of its overthrow”.

Geopolitics: Others

• The Trump administration is actively seeking regime change in Cuba by the end of 2026, the WSJ reported citing sources; the administration assess Cuba’s economy as weak following the capture of Venezuela’s Maduro.
• The proposal by NATO’s Rutte does not include the transfer of overall sovereignty, Axios reported citing sources; the plan includes the increase of security in Greenland and NATO activity in the Arctic.
• NATO’s Secretary General Rutte said the issue of Greenland remaining with Denmark did not come up in his conversation with President Trump.
• NATO’s Rutte said there is still a lot of work to be done for the Greenland deal, AFP reported.
• US President Trump’s deal for Greenland is said to involve small pockets of land, according to NYT.
• Greenland deal is reportedly to involve small pockets of land, the NYT reported.
• German Finance Minister, on US President Trump’s Greenland deal, said have to wait and not get hopes up too soon.

US Event Calendar

• 8:30 am: 3Q T GDP Annualized QoQ, est. 4.3%, prior 4.3%
• 8:30 am: 3Q T Personal Consumption, est. 3.5%, prior 3.5%
• 8:30 am: 3Q T GDP Price Index, est. 3.8%, prior 3.8%
• 8:30 am: 3Q T Core PCE Price Index QoQ, est. 2.9%, prior 2.9%
• 8:30 am: Jan 17 Initial Jobless Claims, est. 209k, prior 198k
• 8:30 am: Jan 10 Continuing Claims, est. 1890k, prior 1884k
• 10:00 am: Nov Personal Income, est. 0.4%
• 10:00 am: Nov Personal Spending, est. 0.5%
• 10:00 am: Nov Real Personal Spending, est. 0.3%
• 10:00 am: Nov PCE Price Index MoM, est. 0.2%
• 10:00 am: Nov PCE Price Index YoY, est. 2.79%
• 10:00 am: Nov Core PCE Price Index MoM, est. 0.2%
• 10:00 am: Nov Core PCE Price Index YoY, est. 2.8%

DB’s Jim Reid concludes the overnight wrap

Now where were we before the weekend news? We’ve seen a big recovery over the last 18 hours after Mr Trump has seemingly agreed a deal on Greenland with the tariff threat for February 1st being withdrawn.

Indeed, the lows for the week came pretty much just before Mr Trump spoke at Davos. The first sense of relief for markets came after Trump’s suggestion that the US wouldn’t use force to acquire Greenland. This then strengthened after the European close, as Trump posted that he would not be imposing the threatened tariffs starting February 1st, citing agreement on “the framework of a future deal with respect to Greenland”. So that led to a big relief rally as investors priced out escalatory scenarios, with financial stress easing across multiple asset classes. The S&P (+1.16%) rose, and the return to US assets meant 10yr Treasury yields rallied by -5.0bps, and US HY spreads (-7bps) also tightened. That said, gold prices (+1.43%) hit another record of $4,832/oz, taking its YTD gain up to +11.86% already, even as they briefly fell to flat on the day after Trump’s post.

The framework deal over Greenland was apparently reached in Trump’s meeting with NATO Secretary General Rutte. Trump did not offer specific details but called the deal “a little bit complex” in a CNBC interview, suggesting that it would cover issues like mineral rights and the planned Golden Dome missile-defence shield and would last “forever”. The New York Times reported that a compromise option discussed within NATO earlier in the day would see the US taking control over small pockets of Greenland for military bases, with Axios reporting that the proposal will respect Denmark’s overall sovereignty over the island. So, while it’s not yet clear exactly what concessions the US will be getting, these appear to have been markedly scaled back compared to Trump’s recent demands for “complete and total control” of Greenland.

Earlier in the session, markets had rallied after Trump said in his Davos speech that “People thought I would use force. I don’t have to use force. I don’t want to use force. I won’t use force”, which eased fears about a military escalation. However, there was still lingering uncertainty as Trump also said he was “seeking immediate negotiations to once again, discuss the acquisition of Greenland by the United States”. Indeed, markets gave up much of their initial gain after Denmark’s foreign minister Lars Lokke Rasmussen said “We will not enter into any negotiations on the basis of giving up fundamental principles. That is something we will never do”. His tone changed after Trump’s announcement of a framework deal, with Rasmussen saying “The day is ending on a better note than it began”.

Risk assets similarly breathed a big sigh of relief after Trump’s post, with the S&P 500 rising by as much as +1.67% intra-day before closing +1.16%. This was a broad rally with all 11 of the index’s sector groups higher on the day, with tariff-sensitive sectors outperforming. Indeed, the Philadelphia Semiconductor Index (+3.18%) hit an all-time high, while the pharma & biotech industry group (+2.34%) was one of the biggest advancers in the S&P 500. Still, the relief rally left the S&P nearly one percent below Friday’s close.  Another US asset that struggled to fully recover was the dollar. The greenback rose +0.34% against the euro, erasing about a third of its decline since Friday. 

Whilst the Greenland news was main the driver boosting markets, another supportive factor was the start of the Supreme Court case into Lisa Cook’s removal from the Fed’s Board of Governors. We don’t have a verdict yet, but the start of arguments showed that some of the conservative justices were questioning some of the Trump administration’s arguments. For example, Justice Brett Kavanaugh said that it would “weaken if not shatter the independence of the Federal Reserve.” So that was viewed as favouring the chances the court would rule against Cook’s removal, which in turn would make it harder for Trump to refashion the Board with his own appointees.

Together with the Greenland news, this helped drive a bull flattening in Treasuries. At the long-end of the curve, which has been most sensitive to concerns around Fed independence, 30yr yields were down -5.7bps on the day to 4.86%, whilst the 10yr yield fell -5.0bps to 4.24%. By contrast, 2yr yields fell by a marginal -1.1bps on the day, having been down -3bps intra-day shortly before Trump spoke in Davos. Yields are flat to a basis point higher across the curve this morning.

Over in Europe, markets had a relatively weaker performance, with bonds and equities struggling to gain traction but rallying from the day’s lows after the Trump speech with futures higher this morning. The STOXX 600 (-0.02%) was basically flat on the day, with losses for Germany’s DAX (-0.58%) set against gains for the UK’s FTSE 100 (+0.11%) and France’s CAC 40 (+0.08%). Notably, we also saw European defence stocks underperform as fears eased about a military escalation, with Rheinmetall down -2.91%. However, Stoxx (+1.17%) and Dax (+1.27%) futures are higher this morning.

Then for sovereign bonds, there was also a fresh bout of losses, with yields on 10yr bunds (+2.4bps), OATs (+1.7bps) and BTPs (+2.8bps) all moving higher. That comes as concerns around energy inflation have continued to gain traction, with European natural gas futures touching €40/MWh for the first time since June amid recent cold weather and declining gas storage.

Here in the UK, 10yr gilts (0.0bps) were a relative outperformer after the latest inflation print for December. It showed headline CPI picking up a bit more than expected to +3.4% (vs. +3.3% expected), but core CPI surprised on the downside at +3.2% (vs. +3.3% expected) which helped to offset the headline beat.

In Asia, the Nikkei (+2.01%) is leading the gains driven by bank stocks with the KOSPI (+0.87%) supported by chipmakers and autos. The S&P/ASX 200 (+0.75%) is also firm following unexpectedly robust jobs data for December (details below). Conversely, Chinese stocks are flattish. S&P 500 (+0.20%) and Nasdaq (+0.30%) futures are edging up further. 10 and 30yr JGB yields are -4.0bps and -5.0bps lower respectively.  

Returning to Australia, the unemployment rate has decreased to a seven-month low of 4.1% from 4.3% in November, better than market expectations of 4.4%. Net employment surged by 65,200 in December compared to November, which saw a revised drop of 28,700. This figure significantly exceeded market forecasts of a 27,000 increase, while full-time employment rebounded by 54,800, in contrast to a decline of 56,500 in the preceding month. Against this background, the Australian dollar (+0.62%) is appreciating, trading at 0.6804 against the US dollar, marking its highest level in 15 months, while three-year government bond yields (+7.6bps) have reached a more than two-year high of 4.25% as we go to print. Meanwhile, markets are anticipating a 61% probability of a rate hike from the RBA on February 3rd, an increase from 26% prior to the data release.

Separately, exports in Japan increased for the fourth month in a row, rising by +5.1% year-on-year in December. This marks a decrease from the +6.1% increase observed in November and fell short of the median prediction of a +6.1% gain. Meanwhile, imports grew +5.3% year-on-year, surpassing the anticipated rise of +3.6%. This indicates stronger domestic demand and elevated input costs. Consequently, Japan reported a trade surplus of ¥105.7 billion, which is considerably less than the expected surplus of approximately ¥360.0 billion.

Looking at the day ahead, US data releases include the weekly initial jobless claims, the updated estimate of Q3 GDP and PCE inflation for November. In the Euro Area, we’ll also get the European Commission’s preliminary consumer confidence indicator for January. From central banks, we’ll get the ECB’s account of their December meeting. Finally, today’s earnings include Intel, General Electric, and Procter & Gamble.

Via City AM,

• Data centre planning applications in England and Wales jumped 63% in 2025, driven largely by AI-related demand and investor enthusiasm.

• Developers are increasingly targeting unconventional sites, from abandoned hotels to former coal mines and landfills, to secure planning approval.

• Power availability and grid constraints are likely to limit how many approved projects are ultimately built, encouraging “bring your own power” models.

Data centre planning applications hit an all-time high in the UK in 2025, City AM can reveal, as investors rushed to gain a foothold in the burgeoning AI market.

More than 60 separate planning applications for the construction of new data centres were filed in England and Wales over the course of the year, according to a City AM analysis of more than 300 local authority planning databases, representing an increase of 63 per cent compared to 2024.

The analysis excluded extensions to existing data centre sites, revisions to past applications  and applications for other developments which included a data centre as part of the plans, meaning the true figure for the number of data centres seeking planning approval is likely to be significantly higher.

The surge in applications lays bare the scale of the demand for compute by the nascent AI industry, with large language models requiring more and more power to operate, and property businesses racing to re-invent themselves as data centre developers to cash in on investor appetite.

Dame Dawn Childs, chief executive of Pure Data Centres, told City AM: “With this AI bubble that everyone’s talking about…because of the increased valuations for powered land, everyone’s trying to get a piece of the pie, and that creates a bunch of fizziness.

“We’re seeing lots of people who are sending out on a daily basis: ‘we’ve got this significant plot of land with all of these megawatts of power in the middle of nowhere, it’ll be an AI gigafactory, buy it for a gazillion pounds’ – they’re absolutely trying to get increased valuations for scrappy industrial land.”

The lion’s share of the demand came from AI applications by Magnificent 7 firms, Childs said, but added that even without AI, there would likely have been a significant increase in applications due to increased cloud computing adoption across the British economy.

The analysis found that around half of the planning applications were situated in London and the South East, regions known as a European hotspot for data centres, though there were also signs of a growing number of data centres being constructed across different parts of the UK. Seven different applications were submitted in Wales during the year, along with another seven in the East Midlands, four in the North West and four in Yorkshire.

The analysis also found property firms becoming more and more creative over the sites chosen to redevelop into data centres in a scramble to gain planning approval. In Watford, developers picked the site of an abandoned Mercure hotel to build a data centre, while in Hackney, the old Truman brewery has been earmarked for conversion. In Nottinghamshire, a shuttered coal mine could be turned into a data centre, while in Chesterfield, a former landfill site could find a new lease of life churning out AI content.

These more ambitious developments were being led by technological advances by data centre hyperscalers, Childs said.

“Previously they needed their cloud regions to be within a certain geography, driven by the cost of power, the availability of power and the price of land,” Childs said.

“They’ve extended that margin now and for some of them they’ve actually doubled the circumference within which they’d be happy to have a child data centre site linked back to their central hub in a cloud region.”

The surge in data centre planning applications is also thought to have been propelled by the launch of the government’s AI Opportunities Action Plan just under a year ago, in which it called for the creation of ‘AI Growth Zones’ – areas designed to build AI infrastructure and attract outside investment and expertise. To date more than 200 submissions for AI Growth Zones have been made by local authorities across the UK.

Planning and power challenges

But the total number of AI data centres ultimately built is likely to be substantially lower than the number of planning applications filed, amid competition for investment and a scarcity of power supplies.

Google’s first UK owned and operated data centre, which opened last year, suffered a series of setbacks before it was ultimately completed.

When the first planning application for the site was submitted in 2018, Thames Water warned it had “identified an inability of the existing water network infrastructure to accommodate the needs of this development proposal”, while a utilities report found the local power supply was inadequate and a new 6km-long cable would have to be dug underground (including drilling under the M25) to connect up to a second National Grid substation.

As a result of power constraints, the “bring your own power” model is also being seen more and more across Europe, in which data centre developers partner with energy specialists to ensure power demands can be met, Childs said.

“Investors are either cautious and savvy and really understand the market… or they are new entrants who are just throwing their hat in the ring to jump on the bandwagon.”