Daily Market Outlook - Tuesday, Jan. 13

By Patrick Munnelly of Tickmill

Tuesday, January 13, 2026 5:51 AM EST

Businessman, Internet, Continents

Image Source: Pixabay

The rally in markets carried over to Asia, where attractive valuations and promising growth prospects drew investors’ attention away from U.S. markets. The MSCI All Country World Index, a key barometer of global equity performance, climbed 0.1% to hit a record high as Asian stocks reached new peaks. Futures for European equities hinted at further gains, though U.S. markets were expected to open on a quieter note following the S&P 500’s record close on Monday. While markets embraced a bullish sentiment, U.S. Treasury prices dipped, pushing the benchmark 10-year yield up by over 1 basis point to 4.19%. Meanwhile, gold and silver rebounded from earlier losses after Citigroup shared an optimistic outlook for both metals. Brent crude oil surged to its highest level since November, driven by comments from former President Trump about potential sanctions on nations dealing with Iran. Japan saw the most action, with its stock market rallying and government bond yields climbing as speculation grew that Prime Minister Takaichi might call for a snap election. The Japanese Yen tumbled to its weakest level against the U.S. Dollar since July 2024. Stocks in defence and nuclear sectors soared, fuelling what analysts have dubbed the “Takaichi trade”, which combined market gains, falling bond prices, and a softening currency. Asian investors were particularly focused on developments in Japan, where concerns about a potential election raised expectations of increased fiscal spending and accelerated inflation. This left the Yen trailing behind its Group-of-10 peers, adding to the day’s dynamic market narrative.

Domestically, the British Retail Consortium reported a 1.0% y/y rise in UK retail sales for December on a like-for-like basis, below the 1.3% consensus and slower than November's 1.2%. Total sales growth also eased to 1.2% y/y. Despite muted figures, the 'Golden Quarter' (Black Friday to Christmas) showed improvement from 2024, with Q4 2025 retail sales up 1.4% 3m/y versus 0.4% in 2024. However, real-term growth was minimal, as shop prices rose 0.7% y/y in Q4 2025, implying retail volumes grew just ~0.6% 3m/y, weaker than pre-Covid years when falling prices boosted real growth. Retail underperformed GDP in 2025, and the holiday season didn’t change that trend. In early 2026, gilts have outperformed with 10yr yields ~10bps lower, unlike marginally higher US Treasury yields. The 10yr UST-gilt yield spread has moved in line with policy rate expectations (1y1y OIS spread). However, over a longer view, the 10yr spread remains higher than pre-2023 levels due to a higher term premium linked to UK fiscal sustainability concerns. With reduced gilt supply post-Budget, some investors see potential for further narrowing of the cross-market spread.

Euro STOXX 50 futures are showing a rise of approximately 0.3%, building on Monday's 0.3% gain that propelled the index to a fresh all-time high. So far this year, the index has climbed around 4%.Shares of Orsted are likely to see an upward move after a U.S. federal judge gave the green light for the company to restart work on its Rhode Island offshore wind project. Meanwhile, UBS is expected to grab attention as reports from the Financial Times suggest CEO Sergio Ermotti plans to step down in April 2027. Looking ahead, all eyes will be on December's U.S. Consumer Price Index (CPI) figures as economic data begins to stabilise following the government shutdown late last year. Economists surveyed by Reuters anticipate a 0.3% rise in the CPI for December. On an annual basis, the CPI is projected to have increased by 2.7%, mirroring November's growth rate.

Overnight Headlines

Trump Imposes 25% Tariff On Countries Doing Business With Iran
ECB’s Villeroy Backs Powell, Calls 2026 Rate Hikes ‘Fanciful’
Fed’s Williams Says Current Rate Level Supports Jobs, Inflation
Japan Warns Of Yen Intervention As ‘Takaichi Trade’ Returns
Citi To Cut 1,000 Jobs Amid Cost-Trimming Drive
BlackRock To Lay Off 1% Of Staff As Restructuring Deepens
Meta To Slash 10–15% Of Reality Labs Workforce
Bullish Oil Options Surge As Iran Risk Escalates
UK Retail Sales Growth Slowed Ahead Of Christmas
Job Losses In European Car Parts Sector Top 100,000 In Two Years
EU–China Agree To Resolve Dispute Over EV Imports
Novo Nordisk Sees Oral GLP-1 Pills Capturing One-Third Of Market
Microsoft Warns China Is Gaining Ground In AI Outside The West

FX Options Expiries For 10am New York Cut

(1BLN+ represents larger expiries, more magnetic when trading within daily ATR)

EUR/USD: 1.1625 (510M), 1.1640-50 (630M), 1.1700-05 (1.2BLN), 1.1725 (401M)
USD/CHF: 0.7915 (712M), 0.7970 (251M)
GBP/USD: 1.3400 (505M), 1.3500 (251M)
AUD/USD: 0.6675-80 (700M), 0.6690 (431M), 0.6700 (1BLN), 0.6710 (448M)
NZD/USD: 0.5800 (517M), 0.5830 (373M)
USD/CAD: 1.3925 (900M)
USD/JPY: 157.00 (421M), 157.50 (504M), 158.25 (300M), 158.50 (622M)

CFTC Positions as of January 9th:

Speculators have reduced their net short position in CBOT US 5-year Treasury futures by 90,044 contracts, bringing it down to 2,312,753.
The net short position in CBOT US 10-year Treasury futures has been decreased by 24,106 contracts, resulting in a total of 915,552.
Speculators have cut their net short position in CBOT US 2-year Treasury futures by 52,953 contracts, now totaling 1,346,654.
There has been a reduction of 9,392 contracts in CBOT US UltraBond Treasury futures, resulting in a net short position of 245,747.
Speculators switched their position in CBOT US Treasury bonds to a net short of 6,832 contracts, compared to 14,222 net long contracts the previous week.
The net short position in Bitcoin stands at 734 contracts.
The Swiss franc reflects a net short position of 40,266 contracts.
The British pound has a net short position of 30,538 contracts.
The Euro has a net long position of 162,812 contracts.
The Japanese yen holds a net long position of 8,815 contracts.