Daily Market Outlook - Wednesday, Jan. 14

By Patrick Munnelly of Tickmill

Wednesday, January 14, 2026 5:18 AM EST

Businessman, Internet, Continents

Image Source: Pixabay

Global markets were poised to reach record highs as easing U.S. inflation data alleviated concerns over rising prices, fuelling investor enthusiasm amid the ongoing AI-driven boom. In commodities, metals emerged as the standout performers. The MSCI All Country World Index continued its ascent this year, supported by a new peak in Asian equities. Japanese stocks surged, with the Yen lingering near its weakest level since July 2024 due to speculation over a potential snap election. Expectations of additional stimulus and the weakened Yen propelled the Nikkei past the critical 54,000 mark for the first time on Wednesday. South Korea, a major player in the AI industry, extended its winning streak to nine consecutive sessions. Conversely, Chinese stocks stumbled as margin-financing requirements were raised to 100%. Cryptocurrencies joined the rally, with Bitcoin climbing to its strongest level in approximately two months, breaking out of weeks of subdued trading and aligning with the broader market upswing. Increased demand for alternative assets, spurred by geopolitical tensions, provided additional support. Bitcoin rose around 2.4% to nearly $96,500 during early Wednesday trading in Singapore, marking its highest intraday level since November 16. Ether followed suit, surging by as much as 5.1%. In the derivatives market, the upward momentum triggered a rapid unwinding of bearish positions, erasing over $500 million in short crypto bets. European equity-index futures signalled modest gains, while silver soared beyond $90 per ounce for the first time in history, and spot gold reached a new record high. Tin and copper also rebounded strongly, hitting fresh peaks. In Asia, attention was firmly on Japan as reports of Prime Minister Takaichi considering a snap election spurred market rallies. This optimism pushed bond prices lower and drove the Yen deeper into levels that might prompt intervention. Japan’s five-year government bond yield climbed to its highest point since the bond's inception in 2000.Oil prices stabilised after experiencing their steepest four-day rise in more than six months. Meanwhile, the U.S. Dollar maintained its prior session gains, as December’s inflation data did little to dampen optimism that the Federal Reserve might pause its cycle of interest-rate cuts.

The market seems sceptical of the recent disinflation trend in the US, showing a muted reaction to December's core CPI downside surprise (0.2% m/m vs. 0.3% median). This print continues last month's improvement, with core inflation slowing to 2.6% y/y from 3.0% in September. Earlier doubts about data accuracy due to October's incomplete figures have been dispelled by December's corroboration. Tariffs had minimal impact, as durables inflation fell to 1.2% y/y, the lowest since June. Upside pressures came from volatile food prices, shelter, and recreation, but these are not major concerns. Market worries about Trump potentially overheating the economy before mid-terms seem premature, with inflation risks likely delayed. For now, the improving trend could persist, challenging cautious rate cut pricing (<50bps this year).

Domestically, early 2026 UK survey data remains gloomy, but the UN world food price index suggests food price inflation may ease soon, aiding CPI normalisation and reducing real income erosion. In both the UK and the euro area, food inflation is concentrated in a few items, though the euro area shows signs of stabilisation. UK-specific issues, like high chocolate prices, highlight this disparity. However, with cocoa prices down 48% y/y, volatile categories may drive CPI inflation downward. While energy is key to hitting the 2% CPI target, easing food prices could provide additional positive momentum.

Later today, all eyes will turn to the earnings reports from Citigroup, Bank of America, and Wells Fargo. Investors are particularly eager to hear their thoughts on President Trump's suggested 10% limit on credit card interest rates. Meanwhile, JPMorgan Chase JPM, which announced quarterly profits surpassing analysts' predictions, warned that such a cap could have significant negative consequences for consumers, potentially impacting the broader financial market.

Overnight Headlines

China Ends 2025 With $1.2T Trade Surplus As Exports Soar
US Clears Path For Nvidia To Sell H200s To China Via New Rule
US Senate Introduces Crypto Market Regulation Bill
Bitcoin Climbs To Two-Month High Of $96,000 On Macro Tailwinds
Trump Administration Targets Home-Builder Buybacks In Housing Push
Early Data Hint At UK Economy Struggling To Rebound After Budget
City Of London Urges UK To Step Up EU Financial Talks
UK To Invest In Northern Rail Upgrades In Labour Growth Push
Trump Predicts Strong Economic Growth In 2026 During Detroit Speech
Trump Nominates David Macneil To US Federal Trade Commission
Novo CEO Eyes Major Deals In Obesity Drug Sector
Netflix May Amend Warner Bros. Bid To All-Cash Offer
Apple, Qualcomm Face Strains From Japan Glass Cloth Supply Crunch

FX Options Expiries For 10am New York Cut

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

EUR/USD: 1.1595-1.1605 (1.7BLN), 1.1625 (1.3BLN), 1.1630-35 (402M), 1.1650-55 (1.1BLN), 1.1700-05 (1.1BLN), 1.1755-65 (928M)
USD/CHF: 0.8025-30 (415M), 0.8050 (358M), 0.8070 (297M)
GBP/USD: 1.3380 (540M), 1.3525-30 (605M)
AUD/USD: 0.66775-85 (604M), 0.6700 (732M), 0.6750 (1.2BLN)
NZD/USD: 0.5745 (325M), 0.5815 (270M)
USD/CAD: 1.3800-05 (752M), 1.3900 (728M), 1.3990-1.4005 (868M)
USD/JPY: 158.00 (732M), 159.00 (484M)

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.