Markets Open Weaker, Core US PPI Inflation, Bitcoin

Realisation that Warsh wants to reduce the balance sheet aggressively, CME’s second precious metals margin requirements increase in 3 days, and general risk off contagion. Weak manufacturing PMIs in China won’t help the mood. Today silver is down another 10.5%, gold -6% platinum -8%, natural gas -18%, Asia getting hit: South Korea -5.5% (after circuit breakers) Indonesia down another 5%, Nasdaq -1.5%, S&P500 -1.1% and crypto also belted over the weekend with Ethereum down -20% in 3 days.

The silver top is in, last week was all about chasing easy money. Every bubble starts with price action, gold broke $2,080, continues with narrative, central bank buying, and ends with rabid retail speculation. Since covid we’ve had crypto bubbles, WFH stocks, meme stocks, NFTs, risk parity ETFs, nickel, AI, and more……  there will be huge losses announced in due course, and asset markets will remain nervous. But what’s the next trade? Curve steepening looks an obvious one, currently at 72bp, a cycle high. Copper and uranium will take a short term hit as leverage is unwound but remain long term buys on supply shortages….?

December U.S. PPI inflation comes in at 3.0%, above expectations of 2.7%. Core PPI inflation unexpectedly RISES to 3.3%, above expectations of 2.9%.

China’s Manufacturing PMI fell to 49.3 in January 2026 (-0.8 pts MoM), slipping back into contraction alongside weaker demand conditions. The New Orders Index fell to 49.2 (-1.6 pts MoM), signalling softer manufacturing demand conditions entering the new year.

The S&P Global PMI surveys continue to show the UK is an outlier on employment - and not in a good way - despite signs of a new year bounce in output. (Firms blame higher labour costs because of UK government policies) (Chart 1, S&P global PMI with HCOB)

Tom Lee’s Bitcoin investment is down $6.7 billion, Cathie Wood said live on CNBC that bitcoin bottom is in and that it is about to go parabolic, Michael Saylor’s MicroStrategy's Bitcoin position officially turns red as Bitcoin falls below $76,000……….. Price action and risk management beat guru narratives every time.

Data this week:

Monday – U.S. mfg. PMI, Canada PMIs

Tuesday – RBA rate decision (+25bp hike expected), US JOLTS job openings

Wednesday – China services PMIU.AS. services PMI & ADP

Thursday – ECB & BOE rate decisions (no changes expected)

Friday – U.S. & Canada payrolls.