Yesterday, the focus of market participants and forex traders was on December manufacturing activity data from the Institute for Supply Management (ISM). The index declined from 48.2 to 47.9 points versus preliminary estimates of 48.3, signaling a potential slowdown in the world’s leading economy.
On the other hand, the data could strengthen the dovish camp within the US Federal Reserve, raising expectations that policymakers may deliver another cut in borrowing costs at the January 29 meeting, from the current 3.50–3.75% range. In this context, it is worth noting comments from Minneapolis Fed President Neel Kashkari, who reiterated his skepticism toward recent macroeconomic reports suggesting easing inflation. He cited ongoing issues with data collection following last autumn’s record-long federal government shutdown. Kashkari emphasized that the main risks now lie in rising unemployment and the persistence of price pressures, as the effects of changes in trade policy are likely to unfold over several years.
Eurozone
The euro is weakening against the yen while showing mixed dynamics versus the US dollar and the British pound.
Today’s December services sector activity data came in weaker than expected: the index fell from 53.6 to 52.4 points, below forecasts of 52.6, while the composite index declined from 52.8 to 51.5 versus an expected 51.9. Negative momentum also intensified in Germany, where the indices adjusted from 53.1 to 52.6 and from 52.4 to 51.3, respectively, compared with preliminary estimates of 52.7 and 51.5. The most notable release for markets was Germany’s December inflation data, which showed a slowdown from 2.3% to 1.8%, while the harmonized index eased from 2.6% to 2.0%, against forecasts of 2.0% and 2.2. This confirms inflation’s proximity to the European Central Bank’s 2.0% target and increases the likelihood that borrowing costs will remain unchanged for an extended period.
United Kingdom
The British pound is losing value against the yen and showing mixed performance versus the US dollar and the euro.
Today, traders are focused on December services sector activity data. The index edged up from 51.3 to 51.4 points, less than expected (52.1), while the composite index increased from 51.2 to 51.4 versus preliminary estimates of 52.1. In addition, December data from the British Retail Consortium (BRC) were released, reflecting sales dynamics at stores open for at least one year. The indicator rose from 0.6% to 0.7%. Business representatives stated they would try to keep prices stable, although analysts believe this will be difficult due to tax indexation предусмотренная in the national budget.
Japan
The Japanese yen is strengthening against major counterparts — the euro, the pound, and the US dollar.
In the absence of major economic releases, price movements are being driven by external factors. Of note are recent comments from former Bank of Japan board member Masazumi Wakatabe, now a member of the government’s Economic Council, who urged the regulator to pursue monetary policy that anchors long-term inflation expectations around 2.0%.
He also stated that consumer price growth is likely to slow as cost-push factors fade, which in turn could support real wage growth in 2026. Tomorrow at 02:30 (GMT+2), investors will turn their attention to December services sector activity data. Forecasts suggest the index will decline from 53.2 to 52.5 points but remain in expansion territory, potentially supporting the national currency.
Australia
The Australian dollar is strengthening against the euro, the pound, and the US dollar, while showing mixed dynamics versus the yen.
According to data released today, services sector activity slowed from 52.8 to 51.1 points in December, slightly better than expected (51.0), while the composite index adjusted from 52.6 to 51.0 versus preliminary estimates of 51.1. These figures indicate the resilience of the national economy even amid global instability and confirm the likelihood that the Reserve Bank of Australia (RBA) will maintain its current monetary policy for an extended period.
Oil
Oil prices are showing mixed dynamics today.
An upward correction was observed following weekend reports of the launch of the military operation “Midnight Hammer” and the subsequent arrest of Venezuelan President Nicolás Maduro and his wife, Cilia Flores, who are now set to stand trial in New York on charges of narco-terrorism.
However, overall investor reaction to these events has been restrained, and downward momentum has already begun to strengthen again. Analysts note that if a full political transition occurs, US companies could significantly increase investment in Venezuela’s oil sector, boosting crude production and strengthening US influence in the global energy market.
According to Reuters, US President Donald Trump plans to meet with business representatives this week to discuss next steps, which could influence prices in the medium term. Analysts estimate that Venezuela’s oil output, which stood at 1.1 million barrels per day last year, could rise to 1.5 million barrels per day over the next two years. At 23:30 (GMT+2), the American Petroleum Institute (API) will publish its weekly report on crude oil, gasoline, and distillate inventories. The previous report showed an increase of 1.7 million barrels, and a continuation of this trend could exert short-term pressure on oil prices.
