Financial Markets Daily Report07 January 2026
In yesterday's session, European government bond yields broadly fell after December inflation numbers for Germany and France came in lower than expected, lowering odds of future rate hikes from the ECB. Investors will be attentive to today's release of December CPI in the euro area, looking for more hints on the rate path in the short term.
Lower euro area sovereign yields weighed on the euro, which weakened against the dollar. The dollar also strengthened against other major peers due to its safe-haven nature in periods of large geopolitical uncertainty. Still, key jobs data releases in the US this week will be important for the future of the Fed's monetary policy outlook and the dollar's path.
In commodities markets, oil prices fell as global oversupply outweighed the uncertainty around the recent capture of Venezuelan's leader Nicolás Maduro. Gold prices continued to rise after the attack, acting as a safe-haven asset, and is now trading just below $4500/ounce, close to the all-time record it reached before the end of the year.