Last week saw a clear divergence in global economic performance. In the United States, signs of slowing growth dominated the data, with declines in manufacturing indicators, employment figures, and factory orders, offset by relative resilience in the services sector, improved consumer confidence, and continued labor market strength reflected in lower unemployment and higher wages. This results in an economy losing momentum without entering a sharp recession. In the euro area, data showed easing inflationary pressures and relative stability in the labor market, alongside weaker momentum in services activity and trade. Performance varied across countries, with strong services activity in Spain, while Germany and France experienced slower consumption and exports. In the United Kingdom, the services sector continued to expand modestly amid a sharp contraction in construction, while Switzerland showed relative stability in consumer spending. In Canada and Australia, data were mixed, reflecting improving activity but rising pressures in labor markets. Japan recorded stronger manufacturing activity and household spending, offset by a slowdown in services. Meanwhile, China continued to post a gradual recovery, with stable services activity and a slight uptick in inflation, signaling a modest but still fragile improvement in the world’s second-largest economy.
Market Analysis
USD/JPY
The US dollar strengthened by around 1% against the Japanese yen since the beginning of the year, extending its gains for a fourth consecutive session and reaching 158.19 on Friday, its highest level in a year. In this context, the Bank of Japan warned about the risks of excessive exchange rate volatility, signaling a potential intervention by Japanese authorities to support the local currency. The Relative Strength Index (RSI) currently stands near 63, indicating positive momentum for the USD/JPY pair. In addition, a bullish crossover is visible between the MACD line (blue) and the signal line (orange), reinforcing the likelihood of continued positive momentum.
JP Morgan Chase
Shares of JP Morgan Chase have risen by around 2% since the start of the year. Markets are awaiting the bank’s fourth-quarter earnings release on Tuesday, January 13, 2026. Expectations point to earnings of $4.94 per share, compared with $4.81 in the previous reading. Revenues are expected to reach $44.89 billion, up from $43.74 billion previously. The RSI currently stands at 59, signaling positive momentum for the stock. Meanwhile, the MACD indicator shows a bullish crossover between the MACD line (blue) and the signal line (orange), supporting a positive outlook for JP Morgan Chase shares.
Palladium
Palladium prices continue to trend higher, reaching $1,908 on Friday, the highest level since December 29, 2025. Palladium has gained around 13% since the beginning of the year, outperforming most other assets such as Bitcoin, global equity indices, and gold. Expectations point to a continuation of the upward trend in the coming period. The metal is currently supported by several factors, most notably expectations of US interest rate cuts, with markets pricing in two cuts by the Federal Reserve this year, which enhances the appeal of non-yielding assets such as precious metals. Palladium is also benefiting from strong industrial demand, particularly from the automotive sector, especially in regions tightening emissions standards. In addition, supply constraints continue to support prices, as demand exceeds available supply, creating upward pressure. Western sanctions on Russia, the world’s largest palladium producer, are also contributing to reduced global supply, further supporting prices. The RSI currently stands near 65, indicating positive momentum, while the MACD shows a bullish crossover between the MACD line (blue) and the signal line (orange), reinforcing expectations of continued positive momentum.
German DAX Index
Despite ongoing economic slowdown and negative factors weighing on the German economy, German equities are moving in the opposite direction. The DAX index continues its upward trajectory, reaching 25,281 points on Friday, an all-time high. The index posted gains of around 23% last year and is up approximately 3% since the start of the year, outperforming most other European equity indices. Several factors are providing positive momentum for German equities, most notably the strong performance of certain sectors, led by the defense sector. Rheinmetall shares surged by around 154% last year, in addition to gains of nearly 21% since the beginning of this year. The banking sector is also receiving additional support amid growing optimism surrounding the approval of a large fiscal stimulus package by the German government. The RSI currently stands at 77, placing the index in overbought territory and reflecting strong bullish momentum. Meanwhile, the MACD indicator shows a bullish crossover between the MACD line (blue) and the signal line (orange), providing further upward momentum.
Key Events This Week
Markets will be closely watching several important economic indicators and data releases this week.
On Tuesday, attention will be on the US Consumer Price Index and new home sales, in addition to a 30-year US Treasury bond auction.
On Wednesday, markets will focus on China’s export and import data, as well as producer prices, retail sales, existing home sales, and US crude oil inventories.
On Thursday, markets will monitor UK GDP and industrial production data, euro area industrial production, as well as US initial jobless claims, the Empire State Manufacturing Index in New York, and the US manufacturing PMI.
Finally, US industrial production data will be released later in the week.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
