The latest Market Talks covering FX and Fixed Income. Published exclusively on Dow Jones Newswires throughout the day.
0917 GMT - The hit to GDP could be hit by as much as half a percentage point among European nations threatened by President Trump's extra tariffs over Greenland, Goldman Sachs economists Giovanni Pierdomenico and Sven Jari Stehn say in a note. A 10% tariff, which Trump said would go into effect on Feb. 1, would lower GDP by 0.1-0.2 points in the affected countries, via lower exports, while that would rise to 0.25-0.5 points for a 25% tariff, they say. All of these GDP hits would come on top of the 0.4% real GDP drag estimated from last year's tariff increases, the economists note. However, it remains highly uncertain whether these tariffs will be implemented, they say.(edward.frankl@wsj.com)
0916 GMT - China's growth could stay positive but moderate slowly to 4.7% this year, says UOB economist Ho Woei Chen in a note. The country's December macroeconomic data indicates growth remained skewed toward exports and industrial production, while retail sales and investment continued to be biased lower, he says. Chinese officials are likely to repeat the "around 5%" economic growth target for 2026 in March, which possibly requires a stronger step-up in fiscal and monetary policy accommodation, he says. He also expects the effect of U.S. tariffs and a higher base for exports to become more evident this year, although tailwinds from global technology demand may provide some upside. China's gross domestic product expanded 5% last year when adjusted for deflation, according to data released by the country's National Bureau of Statistics. (megan.cheah@wsj.com)
0914 GMT - China sees more urgency to shore up domestic growth, says HSBC Global Research analysts in a note. China's economy rounded out the year on a softer footing as GDP growth slowed to 4.5% in 4Q due to a high base. The underlying data showed growing pressures on the domestic economy, with a slide in investment spending.Beijing has front-loaded fiscal funds for consumption and investment, while monetary support includes recent interest-rate cuts, higher quotas for targeted sectors and a lower commercial mortgage downpayment threshold. The exports boost to growth is likely to dip this year, and China will need more policy measures to support domestic growth, especially to engineer a lift for investment, they add. (jiahui.huang@wsj.com; @ivy_jiahuihuang)
0907 GMT - The euro recovers after briefly reaching a seven-week low against the dollar overnight on President Trump's threats to impose tariffs against several European nations as he pressures Denmark to sell Greenland to the U.S. While the euro could fall given the negative growth implications, investors are mindful that further escalation could ultimately weigh on the dollar as well with the "sell America" narrative "lurking in the background," Danske Bank's Kristoffer Kjaer Lomholt says in a note. So far the market reaction is relatively modest, however. This might be partly because the Supreme Court is expected to strike down Trump's tariffs soon, he says. The euro rises 0.2% to $1.1620 after reaching a low of $1.1570 overnight. (renae.dyer@wsj.com)
0900 GMT - President Trump's tariff announcement over the weekend effectively reopens the trade war between the European Union and the U.S., after a temporary truce reached in July, ING economists Carsten Brzeski and Bert Colijn say in a note. The threats escalate trade tensions into one driven less by economic logic and more by political motives, they say. Additional tariffs of 25% would probably shave 0.2 percentage points off European GDP growth, they say, though that model-based estimate falls short in capturing the full impact of new uncertainty and geopolitical tensions. "What is clear is that a full-blown trade war between the EU and the U.S. would leave only losers," they economists say. (edward.frankl@wsj.com)
0853 GMT - Oil prices fall on a broader risk-off tone across markets after President Trump vowed to impose tariffs on several European countries in an effort to pressure Denmark to sell Greenland to the U.S. Meanwhile, with no further escalation in U.S.-Iran tensions over the weekend, concerns about supply disruptions subsided. In early trading, Brent crude is down 1.1% to $63.42 a barrel, while WTI slips 1% to $58.82 a barrel. "Structurally, crude remains under pressure from expectations that supply will outpace demand this year, although pockets of tightness persist, including shortages from Kazakhstan due to Black Sea disruptions," says Soojin Kim from MUFG. (giulia.petroni@wsj.com)
0847 GMT - Yields on U.K. government bonds, or gilts, edge lower amid demand for safe-haven assets after the U.S. threatened tariffs on European nations unless the U.S. can secure a deal to acquire Greenland. Concerns about U.S.- eurozone trade tensions are driving appetite for safer assets. Investors also await U.K. labor market data and inflation data this week for insights on the possible path of interest rate cuts by the Bank of England. Weak data could raise the prospects of more rate cuts. Ten-year gilt yields decline 0.5 basis point to last trade at 4.405%, Tradeweb data show. (miriam.mukuru@wsj.com)
0839 GMT - Eurozone government bond yields decline in early trade after U.S. President Trump threatened tariffs on eight European countries unless the U.S. can secure a deal to buy Greenland. "We open the week with a furry of geopolitical headlines and renewed trade tensions which should challenge the strongly positive risk sentiment we've seen in markets over recent weeks," ING rates strategists say in a note. Ten-year eurozone government bond yields decline across the board, with the 10-year Bund yield down 1.3 basis points at 2.790%, according to Tradeweb. This week's PMI numbers should also prove important, especially for euro rates, ING's strategists say. (emese.bartha@wsj.com)
0822 GMT - President Trump's latest tariff threats on European nations over Greenland are "unacceptable", the DIHK German Chamber of Commerce and Industry says. "Highly controversial political goals are being linked to economic sanctions in an unacceptable manner--at the expense of German and other European companies and American consumers," DIHK foreign trade director Volker Treier says. The latest announcement once again demonstrates how unpredictable U.S. trade policy has become, he says. The European Union should now act together, but de-escalation and defusing the trade conflict should remain the priority, Treier says. The EU's anti-coercion instrument must be reviewed, though its use should remain a last resort, he says. (edward.frankl@wsj.com)
0801 GMT - Malaysia's exports growth likely slowed in the final month of 2025, according to the median estimate from seven economists polled by The Wall Street Journal. Exports are estimated to have risen 2.7% on year, decelerating sharply from November's 7.0% increase to end a relatively resilient year on a soft note. Imports likely increased 7.4%, leading to a trade surplus of 14.1 billion ringgit. Kenanga IB economist Muhammad Saifuddin Sapuan reckons a high base effect was likely the main factor behind the anticipated exports slowdown in December. The data are due Tuesday. (yingxian.wong@wsj.com)
0801 GMT - The Swiss franc rises as President Trump's threat to impose 10% tariffs against several European nations drives investors to safe-haven assets. Trump vowed to impose the tariffs by February 1 in his efforts to take control of Greenland from Denmark. The tariffs will be imposed on goods from the U.K., Norway and six EU countries that sent troops to Greenland for a military exercise. While there's demand for safe havens, there are "no signs of panic with the market clearly hoping an off-ramp will be found," Rabobank's Jane Foley says in a note. The euro falls 0.2% to 0.9293 Swiss francs after reaching a two-week low of 0.9268 overnight, LSEG data show. (renae.dyer@wsj.com)
0758 GMT - The imposition of tariffs marks an escalation in Trump's rhetoric on Greenland and shows that he is serious in escalating matters to acquire the island, Jefferies' Mohit Kumar says in a note. Trump threatened a 10% tariff on eight European countries as of Feb. 1, to be raised to 25% from June 1, unless the U.S. secures a deal to purchase Greenland. Jefferies' base case is that the Feb. 1 deadline will get postponed as diplomatic talks will start between the EU and the U.S. "However, we do not think that Trump will reverse his policy of these additional tariffs, as the matter of Greenland is not so easy to resolve," the global economist says. (emese.bartha@wsj.com)
(END) Dow Jones Newswires
January 19, 2026 04:17 ET (09:17 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
