This week we have earnings from tech giants, European banks and oil majors, rate decisions from the ECB and BoE (Thu), and the US January employment report (Fri).
We start the week with the final January HCOB manufacturing PMIs across the globe, and the UK and US S&P Global manufacturing PMIs. UK house prices and the US ISM manufacturing will also draw market attention on Groundhog Day, today. On Tuesday, focus turns to US JOLTS job openings print, while the IMF’s MD Georgieva speaks at the World Governments Summit in Dubai. The China RatingDog services PMI, Eurozone CPI and US ADP employment change and ISM services index figures are due on Wednesday. We also have Alphabet and UBS earnings reports on Wednesday, with Amazon and BNP Paribas reporting on Thursday. The ECB and BoE are both expected to hold rates on Thursday, and Germany factory orders, and US initial jobless claims will be of interest. The US employment figures will take centre stage on Friday. Markets currently expect employment to remain at 4.4%, and the non farm payroll is estimated at +65k in January. The University of Michigan Consumer confidence and sentiment figures will also be key for markets following recent signs of fragile household confidence.
Central bank chatter includes the Fed’s Bostic, and BoE’s Breeden on Monday. The Fed’s Bowman speaks on Tuesday. The ECB’s Lagarde and BoE’s Bailey both hold new conferences after the central banks’ rate decisions on Thursday. The ECBs Kocher and BoE’s Pill attend separate events on Friday.
Market sentiment last week reflected a high-stakes tug-of-war between “Big Tech” earnings and shifting US monetary and trade policy expectations. Although the S&P 500 briefly crossed the historic 7,000 level on Wednesday, momentum faded as investors digested mixed signals from the Magnificent Seven and a broader “wall of worry” extending beyond corporate fundamentals. Sentiment was further tested by escalating US trade rhetoric, including new 25% tariff threats on South Korea and potential 100% duties on Canada, as well as the market-moving nomination of Kevin Warsh to succeed Jerome Powell as Fed Chair when his term ends in May.
The FOMC held rates steady at 3.50%–3.75% in a 10–2 vote, signalling a pause in the easing cycle amid signs of a stabilising labour market. Chair Powell struck a tone of “cautious patience”, upgrading his assessment of growth to “solid” while stressing that policy is not on a preset path and will remain data-dependent. While acknowledging inflation remains near 3%, partly due to tariff related goods pricing, Powell firmly defended the Fed’s institutional independence, noting it has “served the public well” as his term approaches its conclusion.
Market moves were relatively contained. The 10-year US Treasury yield ended the week little changed at 4.24%, while the S&P 500 gained 0.34%. The US dollar weakened further, with the DXY falling 0.62%, pressured by policy uncertainty and speculation around coordinated FX intervention to support the yen. A partial rebound on Friday followed the Warsh nomination, though broader flows continued to favour gold and non-US currencies. Brent crude briefly touched a four-month high above $70pb, driven by Iran-related geopolitical risk and weather-related supply disruptions, before retreating after OPEC+ reaffirmed plans to keep output steady through March and signals of diplomatic de-escalation between Washington and Tehran emerged.
China’s policy stance continues to evolve, with authorities leaning into digital services and investment in physical assets to absorb labour, even as headline manufacturing remains soft, with the official PMI at 49.3. In contrast, the private sector is showing early signs of recovery, with the RatingDog (Caixin) PMI rising to 50.3, indicating improving export demand and labour market stabilisation. This private-sector resilience, alongside strong household demand for gold as a savings vehicle, points to an economy adapting through innovation while navigating its structural transition toward more sustainable growth.
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