Guardian Weekly Market Report – Issue 201

Reports of Note Due This Week

U.S. financial markets on Thursday will be eagerly awaiting the Federal Reserve’s preferred measure of inflation, the Personal Consumption Expenditures (PCE) Price Index which will be released at 8:30 AM. This week also brings us new home sales, the Case Shiller home price index and pending home sales.

• Monday:
  US Holiday (Martin Luther King Jr. Day)
  5:00 AM – Eurozone CPI (Dec, final)
  8:30 AM – Canada CPI (Dec)
  10:30 AM – BoC Business Outlook Survey (Q4)
  9:00 PM – China GDP (Q4) and key Dec indicators (Industrial Production, Retail Sales, Fixed Investment)
• Tuesday:
  2:00 AM – U.K. Unemployment Rate (Dec)
• Wednesday:
  2:00 AM – U.K. CPI (Dec)
  8:30 AM – U.S. Housing Starts & Building Permits (Dec)
  8:30 AM – Canada Industrial Product Price Index (Dec)
  10:00 AM – U.S. Pending Home Sales (Dec)
• Thursday:
  8:30 AM – U.S. GDP (Q3, third estimate)
  8:30 AM – U.S. Initial Jobless Claims (weekly)
  10:00 AM – U.S. Personal Income & Spending (Oct & Nov) and PCE Price Index
  6:30 PM – Japan CPI (Dec)
• Friday:
  2:00 AM – U.K. Retail Sales (Dec)
  8:30 AM – Canada Retail Sales (Nov)
  9:45 AM – U.S. S&P Global Flash PMI (Jan) – Manufacturing & Services
  10:00 AM – U.S. University of Michigan Consumer Sentiment (Jan, final)

Geopolitics

President Donald Trump has sharply escalated tensions with Europe by warning that he no longer feels bound to “think purely of peace,” linking his aggressive push to seize Greenland and threatened tariffs to his frustration at not receiving the Nobel Peace Prize, according to Norwegian Prime Minister Jonas Gahr Støre. European leaders reacted angrily, rejecting what they called blackmail and warning that Trump’s pressure campaign marks the lowest point in transatlantic relations in decades, with Germany and France vowing retaliation if needed. The European Union is weighing countermeasures, including use of its never-before-invoked Anti-Coercion Instrument, while trying to avoid outright escalation. Trump argues that control of Greenland is necessary to counter Russian and Chinese influence and has hinted at further economic and political pressure, as European officials debate responses ranging from tariffs to symbolic actions, underscoring a rapidly deepening rift between the U.S. and its traditional allies.

Iran signaled a partial de-escalation Thursday by indicating it would not proceed with executing protesters and by reopening its airspace, even as Donald Trump left open the possibility of U.S. military action over the regime’s deadly crackdown. The Pentagon is preparing to deploy additional U.S. forces, aircraft, air defenses and a carrier strike group to the Middle East, while the U.S. also began evacuating some personnel amid fears of escalation. Trump claimed his pressure helped halt planned executions, a point echoed by the White House and Iran’s judiciary, which said a high-profile protester would not face the death penalty, while Foreign Minister Abbas Araghchi said there was no plan for hangings. Despite calmer official rhetoric and resumed flights, rights groups report the death toll has surged past 2,600 with more than 18,000 arrests nationwide, underscoring that Iran’s harsh crackdown continues even as Washington weighs whether it can deliver a swift, decisive blow if it intervenes.

Syrian government forces are advancing across northeastern Syria toward Raqqa and Hasakah, targeting areas held by the U.S.-backed, Kurdish-led Syrian Democratic Forces after seizing major oil and gas fields in Deir al-Zor, a critical revenue source for the autonomous administration. President Ahmed al-Sharaa said it was unacceptable for a militia to control a large share of the country and its key resources, while Damascus has framed the offensive as an effort to prevent Syria’s fragmentation. The United States has urged de-escalation and is mediating talks, balancing support for its Kurdish partners with backing Sharaa’s push to consolidate control. France’s Emmanuel Macron warned against the offensive, but government forces, aided by Arab tribal fighters resentful of SDF rule, have continued advancing, taking strategic sites including Tabqa and key dams. Kurdish authorities say fighting persists and accuse Damascus of breaching agreements, raising the risk of wider instability in the oil- and grain-rich northeast.

Canada is moving to reset relations with China as ties with the United States deteriorate sharply under President Donald Trump, with Prime Minister Mark Carney announcing a “new strategic partnership” during a landmark visit to Beijing. Carney met President Xi Jinping and signaled a break with Washington on trade by agreeing to cut Canada’s 100% tariff on Chinese electric vehicles in exchange for reduced Chinese tariffs on Canadian farm products, while also introducing visa-free travel for Canadians. The shift follows years of strained Canada–China ties and mounting anger in Canada over U.S. tariffs and political threats, prompting Ottawa to diversify trade away from heavy reliance on the U.S. Carney acknowledged China remains a difficult partner, raised human rights concerns including the conviction of Jimmy Lai, and framed the pivot as pragmatic diversification in a more divided and unpredictable global order.