Financial Markets Daily Report21 January 2026
Markets turned risk-off on Tuesday as Trump renewed tariff threats against Europe linked to his controversial Greenland acquisition proposal. Equity indices fell on both sides of the Atlantic, with the tech-heavy Nasdaq leading losses. Implied volatility rose, pushing the VIX higher.
Long-term sovereign yields climbed, steepening curves. With no major macro data releases, the move was largely driven by contagion from a sharp rise in Japanese yields after the Prime Minister announced an expansionary fiscal plan ahead of February 8 elections, raising deficit concerns.
The geopolitical spat over Greenland weighed on the dollar, which depreciated against the euro, while the Swiss franc acted as a safe haven. Bitcoin, often seen as a proxy for risk appetite, fell sharply versus the dollar. In commodities, gold surged to fresh intra-day highs, while Brent crude edged up in an increasingly volatile market.