Trump’s EU Tariffs & Greenland, US Data Recap

U.S. & Japanese yields surge higher, equity futures fall (S%P 500 futures -1% & Nasdaq -1.4%, note US holiday today), dollar falls, precious metals jump (tariffs) while industrial metals weaken (China data), and nat gas jumps 12%.

While Trump threatens 10% tariff on 8 European countries (applying to exports worth 1-1.5% of Euro area GDP) the EU readies counter tariffs of Eur 93 bio in retaliation (and holds $8 trillion of U.S. bonds and equities, a financial weapon). Treasury Secretary Scott Bessent said President Donald Trump will not back down from acquiring Greenland, arguing Europe is too weak to ensure its own security. While Canada’s Prime Minister Mark Carney just made clear Canada would militarily fight against the US should Trump invade Greenland.

Interestingly regarding the U.S. bond market vol, the 30-day trading range for the 10-year note yield on Friday was the tightest since 1972, while corporate bond spreads hit their lowest level since 2007.  The market is short yields at the front of the curve, as they currently break higher.

Also in Japan 30-yield yields jumped 12bp, this is rapidly turning into a crisis.

And there was data! U.S. Industrial production jumped 0.4% MoM (est 0.1%), while we had mixed data in China GDP QoQ beat (+1.2%), Industrial production beat (5.2% YoY), unemployment rate beat 5.1%, while house prices weakened further -2.7% YoY, fixed asset investment worsened -3.8% YoY (est -3.0%), retail sales came below forecast +0.9%, and new bank loans shrink to 7-year low (Chart 1, PBOC, Kobeissi Letter)

The Fed will inject $55.3 billion over the next 3 weeks, beginning next Tuesday.
one of the biggest QE programs in us history. "Fed and Trump are set to add $0.6 Tn of fresh QE liquidity in 2026 via T-bill, MBS buying, reinvestment" BoFA's Michael Hartnett.

China’s birth rate hits lowest on record. China’s birthrate fell in 2025 to its lowest level since 1949, underscoring deepening demographic pressures despite new government incentives to boost fertility.

Korean stocks are up every session so far this year. The Kospi index has more than doubled over just nine months.

TRUMP SAYS HE WILL BE SUING JPMORGAN CHASE OVER THE NEXT TWO WEEKS OVER 'DEBANKING' HIM AFTER JAN 6 PROTEST

The median age of U.S. homebuyers’ hits record high of 59-years-old.

Imagine telling someone 40 years ago that Japan would go from 40% of the global stock market to 5%. And the US would go from 30% to 64%!

Data this week:

Monday – EZ inflation, Canada inflation, FED injects $15-20 bio of liquidity

Tuesday – UK employment, German ZEW, FOMC report

Wednesday – UK inflation & retail sales

Thursday – Australian employment, U.S. GDP & PCE price index

Friday – BOJ rate decision, Japan employment, UK retail sales & global flash PMIs

And potentially the Supreme court ruling on tariffs.