14/01/2026 - 07:54 UTCThe USDX showed resilience on Tuesday, closing 0.29% up as investors digested the latest inflation data. The December Consumer Price Index (CPI) report revealed that headline inflation held steady at 2.7% year-over-year, meeting market expectations perfectly. While the month-over-month headline figure rose 0.3%, the core reading, which strips out volatile food and energy costs, climbed a more modest 0.2%, coming in slightly below consensus forecasts.
Despite the initial cooling signaled by the core data, the USDX managed to gain ground as market participants focused on the "slow road" back to the Federal Reserve’s 2% target. The steady inflation print reinforces the narrative that the central bank will likely hold rates steady at its late-January meeting, with the first potential rate cut not anticipated until mid-2026. This "higher-for-longer" sentiment, coupled with the fact that inflation is not cooling as rapidly as some had hoped, provided underlying support for the US Dollar throughout the session.
In other news, President Trump warned that a Supreme Court ruling against his global trade tariffs would result in a "complete mess" for the U.S. economy. The President emphasized that striking down the duties could trigger complex legal demands for hundreds of billions in refunds, creating a nearly impossible financial burden for the country. The high court’s decision, expected as early as Wednesday, will determine if the administration overstepped its authority by using emergency powers to bypass Congress on trade policy. These legal stakes arrive as the White House officially implements a new 25% levy on any country conducting business with Iran, further intensifying global trade tensions.
As of 06:19 AM GMT Wednesday, Asian equity indices showed a dynamic mid-week performance with the China SSE declining -0.14%, while the China SZSE rose 0.52%. The Hong Kong 50 advanced 0.24% and the Japan 225 jumped 0.65%, with Japanese benchmarks hitting fresh record peaks.
General Asia news was dominated by Japanese stocks, which led regional gains as speculation intensified regarding a potential snap election in early February. Prime Minister Sanae Takaichi is expected to leverage high approval ratings to push for expanded fiscal stimulus, a sentiment that also weakened the yen and boosted export-heavy heavyweights. Conversely, broader market sentiment was slightly tempered by negative cues from Wall Street's overnight session, where bank shares faced a rout.
China news centered on a policy shift from Beijing, which raised the minimum margin required for stock purchases to 100% to curb overspeculation. This move initially caused mainland shares to reverse early gains, although optimism remained high in the technology sector following successful debuts of "AI tigers" like Z.AI and MiniMax.
US and individual stocks saw mixed results in the previous session; TSMC edged down -0.15% while Nvidia rose 0.49% following news of authorized H200 chip exports to select Chinese customers. Investors are now pivoting their focus toward TSMC’s upcoming fourth-quarter earnings report on Thursday, which is viewed as a bellwether for global semiconductor demand. Meanwhile, the main US equity indices retreated from their recent records as traders braced for incoming producer inflation data and further guidance from the financial sector.
In the days ahead, market focus shifts to top-tier economic data and the high-stakes TSMC earnings report to dictate the direction for the USDX and global equities. Investors will monitor the U.S. PPI and Core PPI (both forecast at 0.2%) alongside Retail Sales (0.5%) and Core Retail Sales (0.4%) to gauge inflation and consumer resilience. The labor market remains in focus with Unemployment Claims (215K), while international attention turns to UK GDP (0.1%) and a scheduled speech from BoE Gov Bailey.
The EUR/USD pair weakened on Tuesday, slipping below the 1.1650 mark, as solid US labor market data continued to underpin the Dollar, offsetting signs of easing inflation.
The US Dollar regained ground after the December Consumer Price Index (CPI) largely met market expectations. Headline inflation held steady, while core CPI eased slightly on an annual basis, reinforcing the narrative of gradual disinflation. While these figures would typically strengthen the case for Federal Reserve rate cuts, recent employment data has complicated that outlook.
Following the CPI release, US President Donald Trump renewed criticism of Federal Reserve Chair Jerome Powell, urging a “meaningful” rate cut via a post on his Truth Social platform. Meanwhile, St. Louis Fed President Alberto Musalem struck a cautiously hawkish tone, suggesting the US economy could grow at or above potential in 2026.
Looking ahead, market participants will monitor remarks from European Central Bank Vice-President Luis de Guindos on Wednesday for clues on the Eurozone policy outlook. In the US, attention will turn to Producer Price Index (PPI) data, November Retail Sales, and comments from several Federal Reserve officials for further guidance on monetary policy.
Bitcoin climbed on on Tuesday after major corporate holder Strategy disclosed a fresh multibillion-dollar purchase of the cryptocurrency. However, the rally lost momentum as indicators continued to point to subdued retail demand, particularly in the United States.
Bitcoin’s advance followed news that Michael Saylor-led Strategy Inc. purchased 13,627 Bitcoins at an average price of $91,519, amounting to roughly $1.25 billion. The acquisition lifts the company’s total Bitcoin holdings to 687,410 coins, further cementing its status as the largest corporate holder of the digital asset.
The transaction marked Strategy’s biggest Bitcoin purchase since July 2025 and was financed through the issuance of common stock and preferred equity. The announcement helped ease concerns that the firm had slowed its accumulation strategy, after only modest purchases since mid-December.
While corporate buying provided near-term support, broader demand signals remained weak. Bitcoin continued to trade at a discount on Coinbase relative to global prices, according to Coinglass data—a metric widely viewed as a proxy for U.S. retail sentiment.
Elsewhere in the crypto market, altcoins outpaced Bitcoin, aided in part by largely in-line US consumer price inflation data for December. Core CPI came in slightly below expectations but was unchanged from November, doing little to alter expectations that the Federal Reserve will keep interest rates steady at its late-January meeting.
Oil futures advanced further on Tuesday, brushing aside private survey data showing a larger-than-expected rise in US crude inventories, as mounting geopolitical risks continued to inject a supply-risk premium into prices.
According to data from the American Petroleum Institute (API), US crude inventories increased by approximately 5.3 million barrels in the week ended January 9—well above market expectations for a build of around 2 million barrels.
Gasoline inventories surged by roughly 8.2 million barrels, while distillate stocks, which include diesel and heating oil, rose by about 4.3 million barrels. Despite the bearish inventory data, oil prices remained supported by escalating supply-side concerns.
Heightened tensions in Iran, a major OPEC producer, remained a key focus for markets. The country is experiencing its largest wave of anti-government protests in years, with widespread unrest and reports of heavy casualties amid a forceful security crackdown.
US President Donald Trump warned of potential military action should Iranian authorities continue to use lethal force against demonstrators. He also announced plans to impose a 25% tariff on any country conducting business with Iran, aiming to further isolate Tehran economically.
Supply risks were not confined to the Middle East. Russia’s oil export infrastructure has also come under renewed strain amid the ongoing conflict with Ukraine. Ukrainian forces have targeted key Russian oil facilities and export hubs, including the Caspian Pipeline Consortium (CPC) terminal near Novorossiysk.
US equities finished Tuesday’s session lower after early gains faded, as weakness in banking shares—sparked by a decline in JPMorgan—overshadowed data pointing to cooling inflation.
Markets were closely focused on the December US Consumer Price Index, a key inflation gauge closely watched by Federal Reserve policymakers. With inflation and labor market conditions remaining the Fed’s primary policy drivers, recent data suggest the central bank is in no rush to ease. Last week’s Nonfarm Payrolls report highlighted continued resilience in the jobs market.
JPMorgan Chase kicked off the quarterly earnings season, posting fourth-quarter revenue and earnings that exceeded expectations. However, shares fell after the bank reported weaker investment banking results and absorbed costs related to its acquisition of Apple’s credit-card portfolio. The largest US bank saw profits decline 7% after accounting for a previously announced $2.2 billion credit reserve tied to the takeover of Apple’s card program from Goldman Sachs.
Investors are now looking ahead to earnings reports from Bank of America, Wells Fargo, and Citigroup on Wednesday, which could help shape broader market sentiment in the early weeks of 2026. Strong results may offer reassurance about corporate balance sheets and the overall health of the US economy.
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