Key Highlights

• JPY strengthens sharply against USD after BoJ opts to hold rates at 0.75%.
• Trilateral talks over Ukraine take place today in Abu Dabhi, but a breakthrough looks elusive.
• The U.S. is seeking unrestricted military access to Greenland.

Chart of the Day

U.S. mining stocks continue holdings surge, with $5000/oz in sight for gold

^{Source: BNY}

Risk sentiment has endured a tumultuous week, but the one asset class which has arguably remained consistent remains gold and precious metals. Much can happen, but $5000/oz appears to be in sight, and this is now being fully reflected in equity performance.

The sector surpassed semiconductor manufacturers within global equity holdings in mid-December, since when our data indicate unwillingness among asset allocators to move toward a significant overweight position in the industry, despite the significant moves in industrial metals at the beginning of the year. However, we can see that since mid-January, price action has been difficult to ignore; in recent sessions, holdings of U.S. mining stocks have surged to 40% above the rolling 12-month average. The figure for global mining stocks is even more extreme, at over 60% above the rolling 12-month average. In addition, by every regional measure we note that on a GICS Level 3 basis, the current level of holdings in metals and mining has now surpassed the peak for semiconductor stocks.

Geopolitical risk may have driven diversification interest, but the recent moves in JGBs and growing concerns about developed market fiscal stability will continue to weigh on fiat currencies, especially if developed market real rates fail to rise. Given the current policy trajectories, debt concerns are unlikely to be resolved. We therefore suspect asset allocators are making a secular case for precious metals to compensate for the lack of demand on the industrial side. 

What's Changed?

This is a DIY market: the boxes for risk have been delivered, but there are no directions for constructing elegant returns. The ongoing volatility in markets continues, with mixed results in global equities and bonds, and a weaker USD. EM equities and precious metals are the leading performers, with EU and U.S. shares lagging. Beyond geopolitical uncertainty, central bankers and fiscal policy are the key drivers. The BoJ kept rates on hold and lifted its CPI outlook, suggesting more hikes ahead, but warned on bond yields overshooting. JPY intervention fears rose, adding to volatility. China has set a tougher CNY reference rate of below 7 to the USD for the first time in two years, while speculation rises about a flexible 4.50-5.00% GDP target this year.

JGBs and JPY: BoJ Governor Kazuo Ueda did not indicate an early hike signal following the bank’s rate decision, but the board did upwardly revise its CPI and GDP outlooks. Only after the Ministry of Finance checked rates at banks did JPY rally. At lunchtime, PM Sanae Takaichi dissolved parliament, setting in motion the February 8 election. She has pledged to cut sales tax on food, without issuing new bonds to fund it. Ueda also warned on long-end rate moves driving potential action, which resulted in JGB curve flattening. 2y yields rose 3bp to 1.23%, while 10y rates rose 1bp to 2.24% and 40y fell 7bp to 3.895%.

Global flash PMIs: Japan showed more CPI pressures and Eurozone demonstrated continued growth, as manufacturing offset services with confidence rising and jobs falling. U.K. PMI beat expectations and added to retail sales surprises, driving up gilt yields. Australian PMI beat expectations in both services and manufacturing, reporting the best figures in five months. Indian PMI recovered from the December hit but remains below average. All told, January global growth is holding, but without much joy. Higher costs and mixed outlooks leave employment and investments at risk.

U.S. earnings: Intel’s Q4 earnings beat projections, but a weaker outlook hit its shares. The chipmaker swung to a bigger-than-forecast loss and projected further losses this quarter. The stock slid roughly 13% in premarket trading. This continues a trend for the U.S. market, as we set up for a heavy week ahead of reports and more expectations of rotation trades.

Bottom line: The U.S. markets are hunkered down for a long weekend of bad weather and more headlines about policy, politics and the Fed. President Trump has left Davos and seems ready to announce his choice for the next Fed chair. He also seems intent on continuing to push for more policy shifts ahead of the spring to run the economy hot. The U.S. House of Representatives has passed a series of budget bills, averting a risk of a shutdown at month-end, but the Senate also needs to act. The week so far has left U.S. shares lower, USD lower and bonds lower, making clear that there is doubt about the current mix for U.S. exceptionalism. PMI and consumer sentiment data seem unlikely to provide much relief either, leaving investors looking at alternatives and wondering about the reaction function from the Fed and the president next week. There is no clear compass and no new set of directions, leaving the rate markets the main tool for measuring any potential turnaround. 

What You Need to Know

Bank of Japan Governor Kazuo Ueda has overseen a decision to hold the policy rate at 0.75%, the highest level in three decades, while delivering a more hawkish inflation assessment that kept expectations for further tightening alive. The decision was unanimous except for board member Hajime Takata, who dissented in favor of an immediate hike, underscoring concerns about persistent inflation pressures. In its quarterly outlook, the BoJ revised up four out of six inflation forecasts and reiterated that further rate increases would be appropriate if projections materialize. The bank softened its assessment of economic risks, citing receding headwinds from U.S. tariffs. It signaled close monitoring of yen weakness, fiscal policy uncertainty ahead of the February election and firms’ April price-setting behavior as it considers the timing of its next move. USDJPY moved sharply after the decision, but Finance Minister Satsuki Katayama declined to say if the ministry had intervened in the FX markets, merely noting that she was “watching forex moves with high sense of urgency.” Nikkei +0.294% to 53846.87, USDJPY -0.228% to 158.05, 10y JGB +1.1bp to 2.257%

Russia’s latest talks with U.S. envoys failed to deliver a breakthrough on ending the war in Ukraine, with the Kremlin insisting that key territorial demands remain unresolved. President Vladimir Putin held nearly four hours of discussions with U.S. representatives Steve Witkoff and Jared Kushner, which Moscow described as constructive but insufficient for a long-term settlement without acceptance of Russia’s claims in eastern Ukraine. Talks are set to continue in Abu Dhabi, involving U.S., Russian and Ukrainian officials and focusing on the Donbas and possible modalities for freezing the conflict. Kyiv continues to reject demands to cede territory it still controls, even as it signals readiness to sign an agreement on postwar security guarantees. Despite the negotiations, fighting and strikes on energy infrastructure have intensified on both sides. PFTS 0% to 461.21, USDUAH +0.024% to 43.16,10y UGB +9.5bp to 13.524%.

The U.S. House of Representatives has passed its final set of 2026 government funding bills, marking a major milestone for Speaker Mike Johnson as Congress moves away from temporary stopgaps toward full-year appropriations. A three-bill mini-omnibus (also known as a “minibus”) covering Defense, Transportation, Housing, Health, Labor and Education was passed overwhelmingly, while the Department of Homeland Security bill narrowly cleared the chamber amid strong Democratic opposition over ICE oversight. The measures will be bundled with bills approved last week and sent to the Senate ahead of the January 30 deadline, setting up the first full-year funding agreement since March 2024. Despite internal Republican tensions and partisan divisions, lawmakers hailed the outcome as progress toward restoring a regular, committee-driven appropriations process. S&P Mini -0.068% to 6940.25, DXY -0.003% to 98.357, 10y UST -1.2bp to 4.233%.

The U.S. is seeking to rewrite its long-standing defense agreement with Denmark to remove limits on its military presence in Greenland, aiming for unrestricted access as it expands strategic operations in the Arctic, says Bloomberg. Under the existing 1951 agreement, amended in 2004, Washington is required to consult Denmark and Greenland before making significant changes, but U.S. negotiators want that language loosened or removed entirely. President Trump has said the U.S. would gain “total access” to Greenland, potentially involving expanded bases, missile deployments, mining rights and a stronger NATO role, in exchange for easing trade tensions with Europe. While Denmark and Greenland have signaled openness to expanding cooperation, both stress that any changes must be handled respectfully, leaving the final scope of U.S. access uncertain. Danish Prime Minister Mette Frederiksen intends to visit Greenland today. OMX COPENHAGEN 20 0.705% to 1789.915, EURDKK +0.008% to 7.4692, 10y DGB -0.4bp to 2.777%.

Allies of U.K. Prime Minister Keir Starmer have moved to block Greater Manchester mayor Andy Burnham from returning to parliament following the resignation of Labour MP Andrew Gwynne, amid fears Burnham could mount a future leadership challenge. Senior figures say a “Stop Andy Burnham” campaign is underway within Labour’s ruling NEC, which is dominated by Starmer loyalists and controls candidate selection for the expected byelection. Critics argue Burnham’s return would be costly, risky and destabilizing ahead of May elections, while supporters warn that blocking him would provoke a backlash from MPs, unions and members. Burnham has downplayed speculation, insisting his focus remains on his mayoral role. The episode underscores growing unease within Labour over leadership speculation, electoral vulnerability and internal party control. FTSE 100 +0.177% to 10167.99, GBPUSD +0.015% to 1.3503, 10y gilt -0.9bp to 4.465%.

What We're Watching

U.S. January PMI manufacturing is forecast to improve to 52.0 vs. 51.8 in December.

U.S. November leading index is expected at -0.2% m/m vs. -0.3% in October.

U.S. final University of Michigan consumer sentiment is expected to be unchanged at 54.0. 1y and 5-10y inflation expectations are projected at 4.2% and 3.4%, respectively.

What iFlow is Showing Us

Mood: The pickup in equity buying momentum and selling in core sovereign bonds pushed iFlow Mood toward highs last seen in July 2024. iFlow Mood stands at 0.40.

FX: Mixed flows led by SGD, ILS, AUD and CZK outflows, against PLN, CLP and COP inflows. USD scored holdings narrowed slightly to -1.14, while EUR holdings (overheld) were reduced to 0.6.

FI: Japanese, Mexican, Peruvian and Philippine government bonds posted the most demand, against significant selling in Indonesia and Israel, followed by Turkish and South Korean government bonds and U.K. gilts.

Equities: There was broad demand for APAC equities, led by South Korea and China, while flows in the rest of the region were mixed. Europe, Mexico and South Africa were most sold, against buying in Brazilian, Australian and Japanese equities. Within EM APAC, the materials, utilities and industrials sectors were most bought, while communication services and financials sectors were the only two sectors with outflows. 

Quotes of the Day

“If a man knows not to which port he sails, no wind is favorable.” – Seneca the Younger

“There is no map. We are all pioneers.” – Glennon Doyle. 

Economic Details

The Eurozone’s January PMI signaled continued but modest private sector expansion, with the HCOB Flash Composite PMI Output Index unchanged at 51.5, marking the 13th consecutive month of growth. Manufacturing output returned to slight expansion, with the manufacturing output index rising to 50.2 and the headline manufacturing PMI to 49.4, while services growth softened, with the services business activity index slipping to a four-month low of 51.9. New orders increased for a sixth month but at the slowest pace since September, constrained by falling export demand. Employment declined for the first time in four months, driven by sharp job losses in Germany, even as France and the rest of the bloc saw continued hiring. Input and output price inflation accelerated, with selling price inflation the strongest since April 2024, while business confidence climbed to a 20-month high. Euro Stoxx 50 -0.218% to 5943.2, EURUSD -0.137% to 1.1739, BBG AGG Euro Government High Grade EUR +1.4bp to 2.986%.

Germany’s January private sector activity strengthened, with the HCOB Flash Composite PMI Output Index rising to 52.5 from 51.3, a three-month high broadly in line with its long-run average. Services led the expansion, with business activity at 53.3, while manufacturing output returned to marginal growth at 50.5 after contracting in December, although the headline manufacturing PMI remained in contraction at 48.7. New orders increased for a third time in four months, driven mainly by services, and business expectations rose to their most positive level since February 2022. Despite this improvement, labor market conditions deteriorated sharply, with employment falling at the fastest pace since mid-2020 amid smaller backlogs. Input cost inflation accelerated to near-three-year highs, pushing output price inflation to its strongest since May 2023. DAX +0.024% to 24862.48, EURUSD -0.137% to 1.1739, 10y Bund +0.1bp to 2.889%.

France’s January private sector activity slipped back into contraction, with the HCOB Flash Composite PMI Output Index falling to 48.6 from 50.0, marking a three-month low. The downturn was driven by a sharp weakening in services, where activity fell to a nine-month low of 47.9, more than offsetting a strong rebound in manufacturing output to 51.9, its highest level in nearly four years, with the manufacturing PMI at 51.0. New orders declined at the fastest pace since July, reflecting subdued demand and client hesitancy amid political and fiscal uncertainty, while output prices were flat despite a modest rise in input costs. Employment continued to edge higher, driven by services, and business confidence jumped to a 16-month high on hopes of a resolution to the budget impasse. CAC 40 -0.091% to 8141.44, EURUSD -0.137% to 1.1739, 10y OAT -0.8bp to 3.508%.

France’s January wholesale trade business climate improved significantly, with the composite business climate indicator rising to 100, returning to its long-term average for the first time since November. According to INSEE’s bimonthly survey, sentiment rebounded from November, driven by a sharp recovery in balances related to past foreign sales and order intentions, which both moved back toward or above their historical norms. Order intentions strengthened in particular in wholesale trade of information and communication equipment, while other specialized wholesale segments also recorded marked improvements. Assessments of past sales and general business prospects continued to recover, though remaining slightly below average. Views on employment became less pessimistic, with both past and expected staffing balances improving, while opinions on selling prices edged higher but stayed below long-term norms.

France’s January industrial business climate improved further, with INSEE’s composite indicator rising three points to 105, its highest level since July 2022, moving well above the long-term average. The increase was driven primarily by a sharp rebound in balances related to personal production outlooks and an improvement in global order books, both of which moved further above their historical norms. Order book assessments strengthened more markedly for total orders than for foreign orders, while views on past production eased slightly but remained above average. Finished goods stock balances fell sharply and slipped below their norm. Employment indicators were broadly stable, with past staffing easing marginally and expected staffing unchanged, both still above average. Perceived economic uncertainty was stable at an elevated level.

France’s January retail and automotive trade business climate deteriorated sharply, with the composite indicator falling five points to 99, slipping just below its long-term average and unwinding most of December’s gain. The decrease was mainly driven by a clear drop in order intentions, particularly in retail excluding automobiles. Expected sales balances also fell, moving further below average, while past sales improved modestly and edged closer to normal. Stock level opinions declined toward their mean. Expected selling price balances eased back to average, while assessments of past prices improved. Employment expectations weakened further and moved away from their norm, while perceived economic uncertainty was unchanged and below average. Cash flow assessments deteriorated slightly to their weakest level since November 2023.

France’s January services business climate was unchanged, with INSEE’s indicator holding at 98 for a third month, having been below its long-term average since November. Business leaders’ views on expected demand and activity were stable but still below normal, while assessments of past activity improved for a third consecutive month and approached average levels. By contrast, sentiment on general sector prospects deteriorated slightly and returned to its long-term norm. Employment indicators were mixed, with a sharp fall in past staffing balances but a modest improvement in hiring intentions, both below average. Recruitment difficulties decreased further and fell below their historical mean. At a sector level, sentiment improved in road freight transport and real estate activities, but weakened notably in administrative and support services and in accommodation and food services.

U.K. retail sales volumes rose 0.4% m/m in December, reversing a 0.1% fall in November, but sales fell 0.3% q/q in Q4 after a strong summer. On a y/y basis, December volumes increased by 2.5%, while annual volumes for 2025 rose 1.3%, marking a second consecutive y/y gain but remaining below pre-pandemic levels. The q/q decline reflected weaker supermarket and non-store retail sales following robust Q3 demand, partly boosted earlier by favorable weather and major sporting events. In December, non-store retailers rebounded, supported by renewed demand for precious metals, while automotive fuel sales continued to fall. Food and non-food stores both recorded y/y gains in 2025, though online volumes stayed well below their 2021 peak.

U.K. private sector activity accelerated sharply at the start of 2026, according to S&P Global’s Flash U.K. PMI. The composite output index rose to 53.9 in January, a 21-month high, signaling the strongest expansion since April 2024. Growth was led by services, with business activity also reaching a 21-month high, supported by post-budget clarity, new projects and stronger investment demand. Manufacturing output expanded for a fourth consecutive month, aided by improved exports and customer restocking, with goods exports rising for the first time in four years. New orders increased at the fastest pace since October 2024, boosting business optimism to a 16-month high. However, rising wage and input costs continued to fuel price pressures and accelerated job losses, particularly in services.

U.K. consumer confidence remained deeply negative in January, with the GfK consumer confidence index rising by one point m/m to -16, marking a decade since the measure was last in positive territory. Although the reading improved from a low of -23 in April 2025, it remained below the near three-year high of -13 seen in July 2024. GfK noted that sentiment has been persistently weighed down by the COVID-19 pandemic, political upheaval and the cost of living crisis. In January, perceptions of personal finances improved, with the outlook rising 4 points to +6, while views on the wider economy deteriorated, including a 5-point drop in assessments of the past year. Despite steady wage growth, rising unemployment and December inflation at 3.4% continued to constrain overall confidence.

Sweden’s labor market data showed a continued rise in labor force participation toward the end of 2025, driven by higher employment rates for both men and women aged 15-74. The employment rate trended upward through the year, remaining close to post-pandemic highs, with male participation consistently above female participation, though the gap narrowed slightly. At the same time, unemployment edged higher, fluctuating around 8-9%, with increases for both men and women, reflecting a larger active labor force rather than outright job losses. The data suggest that stronger participation has expanded labor supply, even as hiring momentum has softened. Overall, the figures point to a more engaged workforce, with rising participation offset by moderately elevated unemployment as labor market conditions adjust. OMX +0.148% to 3007.499, EURSEK +0.133% to 10.601, 10y Swedish GB +1.2bp to 2.925%.

Sweden’s Q4 real estate prices softened across all major segments, despite gains earlier in the year. Prices for one or two-dwelling buildings fell 1% q/q at the national level, with the average price at SEK 3.8mn, while metropolitan prices ranged from just under SEK 5.3mn in Greater Malmö to SEK 6.9mn in Greater Stockholm. Prices of seasonal and secondary homes also declined 1% q/q, taking the average holiday home price to SEK 2.6mn. Agricultural real estate prices fell 2% q/q to an average of SEK 3.4mn. Multi-dwelling and commercial property prices recorded the sharpest decline, down 3% q/q to an average price of SEK 16.4mn.

Hungary’s November earnings showed strong nominal and real wage growth, with average gross earnings at HUF 756,400, up 8.9% y/y, while average net earnings rose 10.2% y/y to HUF 525,900. Real earnings increased by 6.2% y/y, reflecting consumer price inflation of 3.8%. Median gross earnings reached HUF 600,000 and median net earnings HUF 417,900, rising 10.1% and 10.5% y/y, respectively. Net wage growth outpaced gross earnings, supported by higher family tax allowances introduced in July and October. Regular gross earnings rose 8.7% y/y to HUF 665,100, with gains of 7.5% in the business sector, 10.4% in the budgetary sector and 14.4% in non-profit institutions. Over January-November, average gross earnings increased by 9.1% y/y. Budapest SI -0.079% to 125098.1, EURHUF +0.092% to 382.39, 10y HGB -4bp to 6.69%.

Hungary’s labor market remained relatively tight in December, with 4.624 million people employed and an unemployment rate of 4.4%. The unemployment count stood at around 211,000, while employment among those aged 15-74 averaged 4.642 million in October-December, down 46,000 y/y. Male employment rose by 24,000 y/y, while female employment decreased by 23,000. The employment rate for those aged 15-64 was broadly flat at 74.8%, with rates of 78.5% for men and 71.1% for women. Unemployment was evenly distributed by gender, at 4.5% for men and 4.3% for women, while registered jobseekers fell 2.2% y/y to 216,000.

Japan’s national CPI inflation eased further in December 2025, reflecting moderating energy prices and some softening in headline momentum. The headline CPI rose 2.1% y/y (November: 2.9%), while core CPI excluding fresh food increased 2.4% y/y (November: 3.0%); “core core” inflation excluding fresh food and energy remained relatively firm at 2.9% y/y, pointing to still-elevated underlying price pressures. On a seasonally adjusted basis, headline and core CPI both fell 0.1% m/m, while core core CPI rose 0.1% m/m. The deceleration in headline inflation was driven largely by energy, with electricity, gas and gasoline prices together subtracting around 0.4 percentage points from y/y inflation, alongside renewed declines in fresh food prices. By contrast, processed food, dining out, accommodation services and cellphone charges continued to post solid increases, underscoring persistent cost pass-through in services and non-energy goods. For 2025 as a whole, average headline CPI rose by 3.2% y/y (2024: 2.7% y/y), core CPI by 3.1% (2024: 2.5%) and core-ex food and energy CPI by 3.0% (2024: 2.4% y/y), confirming a third consecutive year of inflation around or above the BoJ’s 2% target. Overall, while headline inflation cooled into year-end, the stickiness in core-ex-food and energy measures suggests the BoJ will keep its tightening stance. Nikkei +0.294% to 53846.87, USDJPY -0.228% to 158.05, 10y JGB +1.1bp to 2.257%.

Japanese flash PMI shows the country’s private sector output expanding at the fastest rate in 17 months in January, with the composite PMI at 52.8 vs. 51.1 in December. Manufacturing and services PMIs rose to 51.5 (December: 50) and 53.4 (December: 51.6), respectively. The improved performance at the start of the year coincided with a stronger increase in new business, which contributed to a record rise in the volume of outstanding work. Companies responded by raising their staffing levels to the greatest extent since April 2019. Prices data meanwhile showed a further sharp upturn in operation

Japan’s November final labor survey shows that nominal wage growth remained positive but continued to lag inflation, resulting in another contraction in real wages. Average cash earnings rose 1.7% y/y to ¥313,531 for establishments with five or more employees (2.0% y/y for firms with 30+ employees), supported by steady gains in scheduled pay (+1.9% y/y) and regular wages (+1.9% y/y), while special payments declined by 1.5% y/y, dampening overall growth. By worker type, general workers saw firmer increases in cash earnings (+2.1% y/y) and regular pay (+2.4% y/y), whereas part-time workers recorded modest headline growth (+1.2% y/y), though hourly wages rose a robust 4.0% y/y, reflecting labor tightness at the margin. However, elevated inflation continued to erode purchasing power: real cash earnings fell 1.6% y/y when deflated by CPI excluding imputed rent (CPI +3.3% y/y), and declined by 1.2% y/y using headline CPI (+2.9% y/y). Overall, the data underscore a persistent gap between nominal wage gains and inflation, suggesting household real income conditions remain under pressure despite gradual underlying wage firming.

Japan’s December department store sales fell 1.1% y/y, ending a four-month run of gains, with total sales of roughly ¥654bn as weaker inbound demand offset resilient domestic spending. Sales in the ten biggest cities declined by 0.4% y/y, while regional areas fell 3.6% y/y, in a second consecutive drop. Domestic sales rose 0.6% y/y for a fifth straight month, supported by strong demand for jewelry, watches and other high-end goods, as well as solid seasonal food sales during the extended year-end holiday period. By contrast, tax-free inbound sales dropped 17.1% y/y, with both spending and shopper numbers down sharply, reflecting a steep decline in Chinese visitors. For full-year 2025, total department store sales fell 1.5% y/y.

Australia’s January PMI showed a marked acceleration in private sector activity, with the composite output index rising to 55.5 from 51.0. This was the joint-highest reading since April 2022 and signaled the fastest expansion in five months. Services business activity increased to 56.0 from 51.1, while the manufacturing PMI edged up to 52.4 from 51.6 and the manufacturing output index rose to 52.1 from 50.5. Stronger growth was driven by faster expansions in new business across both sectors, supported by improved external demand and the strongest rise in export orders in three-and-a-half years. Employment continued to grow, though at a slower pace than December, leading to a marginal rise in backlogs for the first time in nine months. Input cost and output price inflation both softened vs. December. ASX +0.125% to 5486.46, AUDUSD +0.132% to 0.6849, 10y ACGB +2.1bp to 4.818%.

New Zealand’s Q4 CPI inflation rose to 3.1% y/y, up from 3.0% in Q3 2025 to the highest rate since Q2 2024 (3.3%). Key contributors were electricity (+12.2% y/y), local authority rates (+8.8% y/y) and rent (+1.9% y/y). Other notable increases included meat and poultry (+8.2% y/y), overseas accommodation (+9.1% y/y) and milk, cheese, and eggs (+9.8% y/y). Tradable components inflation rose further to 2.6% (Q3: 2.2% y/y), while non-tradable components inflation was steady at 3.5% y/y. Quarterly inflation was 0.6% q/q in Q4 2025, driven mainly by a 7.2% q/q rise in international air transport prices, especially airfares to Asia, Australia and Africa. Petrol prices increased by 2.5% q/q, while vegetable prices fell 16.5%, exerting something of a downward effect on inflation. NZX 50 -0.801% to 13448.24, NZDUSD -0.338% to 0.5908, 10y NZGB +2bp to 4.589%.

South Korea’s January 2026 composite consumer sentiment index (CCSI) stood at 110.8, one point higher than in December 2025. Sentiment regarding current living standards improved to 96 points (December: 95), while the future outlook measure remained steady at 100 (December: 100). Future household spending expectations increased slightly to 111 points (December: 110), with views on future household income unchanged at 103. Views on current and future domestic economic conditions rose to 90 (+1) and 98 (+2), respectively. The one-year expected inflation rate held at 2.6%, with three-year and five-year expectations at 2.5%. KOSPI +0.758% to 4990.07, USDKRW +0.123% to 1466.95, 10y KTB -4.7bp to 3.55%.

India’s January private sector activity rebounded sharply, with the HSBC Flash Composite PMI Output Index rising to 59.5 from 57.8 in December, signaling expansion above the long-run average. Manufacturing output increased to 59.9 from 57.3, while services business activity rose to 59.3 from 58.0, alongside a pickup in new orders across both sectors. The manufacturing PMI climbed to 56.8 from 55.0, the strongest improvement since October, supported by faster growth in production, new business and purchasing activity. Export demand strengthened, with international orders recording the largest rise in four months. Employment returned to growth after stalling in December, while input costs and output charges rose at a faster but still moderate pace. SENSEX -0.888% to 81576.19, USDINR +0.314% to 91.9125, 10y INGB +1.6bp to 6.651%.

Singapore’s private residential market cooled further in Q4 2025, reported the Urban Redevelopment Authority. The overall private residential price index rose by 0.6% q/q, easing from a 0.9% increase in Q3, while prices for 2025 as a whole rose by 3.3%, the smallest annual gain since 2020. The overall private residential rental index fell by 0.5% q/q, marking the first decline since Q2 2024, although rents still increased by 1.9% over the course of 2025. About 2,000 private residential units, including executive condominiums, were completed in Q4, lifting total completions for the year to around 8,000 units. Looking ahead, approximately 57,000 units are expected to be completed in coming years, supported by elevated government land sales supply, including an H1 2026 confirmed list pipeline around 50% above the average for the past decade. STI +1.27% to 4889.65, USDSGD -0.172% to 1.2788, 10y SGB -1.1bp to 2.141%.

Singapore’s July-December CPI showed CPI-All Items rising 0.9% y/y for general households, unchanged from H1, with inflation at 0.4% for the lowest 20% income group, 0.9% for the middle 60% and 1.2% for the highest 20%. Excluding imputed rentals for housing, CPI increased by 0.4% y/y for the lowest 20% income group, 1.0% for the middle 60% and 1.4% for the highest 20%. For full-year 2025, CPI-All Items rose 0.9% y/y, down from 2.4% in 2024; by income group, inflation moderated to 0.6%, 0.9% and 1.2%, respectively. Health insurance, food, accommodation, motor cars and public transport were the main upward contributors, partly offset by lower electricity, information and communication costs and reduced holiday expenses.

Taiwan’s December wholesale, retail and food services activity showed mixed performance, reflecting divergent sector dynamics. Wholesale turnover reached $1.25tn, rising 6.6% y/y, driven by strong AI and cloud computing demand that lifted machinery and equipment wholesaling by 19.9%, while food and beverage wholesaling edged up 0.2% y/y; weaker demand weighed on construction materials and vehicle wholesaling, down 13.4% and 10.6% y/y. Retail sales rose 0.9% y/y to $437.9bn, supported by vehicle sales and year-end promotions, though apparel and department store sales decreased amid warm weather and later Lunar New Year timing; full-year retail sales fell 0.2%. Food service revenue slipped 1.1% y/y to $95.0bn in December, but full-year turnover increased by 2.9%. TAIEX +0.679% to 31961.51, USDTWD -0.13% to 31.56, 10y TGB +0.5bp to 1.41%.

Taiwan’s December industrial production rose 21.57% y/y, with manufacturing output up 22.98%, while m/m production increased by 11.01%, or 5.80% on a seasonally adjusted basis. The industrial production index reached 131.76, driven primarily by the information and electronics sector amid sustained demand for AI, high-performance computing and cloud services. Within manufacturing, electronic components output increased by 19.32% y/y, led by integrated circuits, while computer, electronic and optical products surged 133.10% y/y on strong server and semiconductor equipment demand. By contrast, basic metals fell 9.56% y/y, chemicals declined by 3.42% and automotive production decreased by 1.57% amid weak end-market demand. In Q4, industrial production rose 17.27% y/y, while full-year output increased by 16.70%.

Taiwan’s December financial conditions showed moderate monetary and credit expansion, according to the central bank’s latest update released overnight. M1B and M2 grew by 0.39% m/m and 0.35% m/m, respectively, while annual growth slowed to 4.85% for M1B and 5.00% for M2, reflecting net capital outflows. For 2025 as a whole, average annual growth in M1B and M2 was 3.56% and 4.54%, respectively. Total outstanding loans and investments of monetary financial institutions rose 0.84% m/m, lifting annual growth to 6.21%, driven by stronger bank claims on the private sector and government. Including life insurers and reclassified loans, overall financial institution lending grew by 6.06% y/y.

Thailand’s exports rose 16.8% y/y in December, beating expectations and accelerating from a 7.1% increase previously. This lifted full-year 2025 export growth to 12.9%, the strongest figure in four years. The Ministry of Commerce attributed the performance to electronics and electrical appliances, supported by AI-related upgrading and supply chain diversification: shipments to the U.S. surged by 54.3% y/y in December and rose 32% over 2025, while exports to China increased by 4.4% y/y in December and 12.6% for the year. December imports climbed 18.8% y/y, resulting in a smaller-than-expected trade deficit of $352mn, while full-year imports also rose 12.9%, taking the 2025 trade deficit to $5.3bn. SET +0.233% to 1314.7, USDTHB -0.574% to 31.21, 10y TGN -1.1bp to 1.865%.