Asia Market Quick Take – January 14, 2026

Key points:

• Macro: Headline CPI edged up 0.3% MoM; Core CPI cooled to 0.2% MoM
• Equities: Stocks lower with banks falling on JPM earnings, credit card fee crackdown
• FX: JPY weakens on election news; USDJPY approaches potential intervention level 160
• Commodities: Oil at highest since late October; silver hits $89
• Fixed income: Treasuries rose modestly in the front end and belly on softer core CPI

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Disclaimer: Past performance does not indicate future performance.

Macro:

• U.S. annual inflation held at 2.7% in December, consistent with November and expectations. Energy prices eased, gasoline fell, and natural gas rose. Used car price growth slowed; food and shelter costs increased. Core inflation stayed at 2.6%, its lowest since 2021, below the expected 2.7%. Monthly CPI rose 0.3% due to shelter costs, with core CPI at 0.2%, under the forecasted 0.3%.
• Trump reaffirmed a proposal for a 10% cap on credit card rates for one year. He announced upcoming housing affordability plans, with details to be unveiled at Davos. He praised the impact of the $200 billion mortgage bond purchase and stated that lowering mortgage rates would be easier with Fed support, adding that Powell will be out soon.
• U.S. recorded a $144.7 billion budget deficit in December, up from $86.7 billion a year earlier. Receipts grew 6.6% to $484.4 billion, spurred by income taxes and social insurance. Outlays rose 16.3% to $629.1 billion, mainly for Social Security, Health and Medicare, and defense, affected by payment timing.
• U.S. Economic Optimism Index fell to 47.2 in January from 47.9, below the forecast of 48.2. The Six-Month Outlook decreased 2.5% to 43.3, and Confidence in Federal Policies dropped 4.2% to 43.5. Meanwhile, the Personal Financial Outlook increased 1.7% to 54.9.
• U.S. new single-family home sales edged down 0.1% in October to 737,000, surpassing the forecast of 715,000. Sales declined in the West, Northeast, and Midwest but rose in the South. The housing supply was 488,000 homes, representing 7.9 months' worth, while the median price increased 8% to $392,300.

Equities: 

• US - S&P 500 slipped 0.2%, the Dow dropped nearly 400 points, and the Nasdaq edged down 0.1%. JPMorgan fell 4.2% despite solid results, pressured by weak investment‑banking fees and concerns over Trump’s proposed one‑year 10% cap on credit‑card interest rates. Visa and Mastercard sank more than 4%, adding to sector weakness, while Delta Air Lines lost over 2% after issuing a soft earnings outlook. Brief support from in‑line December CPI faded as markets refocused on expectations for Fed rate cuts later this year.
• EU - European stocks closed at record highs Tuesday, with the STOXX 50 up 0.2% to 6,030 and the STOXX 600 steady at 610. A softer U.S. core inflation print of 2.6% eased concerns about delayed Fed rate cuts, while worries over Fed independence subsided after Republican lawmakers pushed back on the DOJ’s probe into Chair Powell. Ørsted jumped 5.3% after a U.S. judge allowed work to resume on its nearly finished Revolution Wind project. Other gainers included argenx, TotalEnergies, Siemens, Santander, and Airbus. Saint‑Gobain, Vinci, and Sanofi led the decliners.
• HK - Hang Seng gained 182 points, or 0.7%, to 26,793 on Tuesday, marking a third straight advance driven by broad sector gains. Sentiment improved as the EU reconsidered tariffs on Chinese EVs, while China Vanke drew attention for seeking a 90‑day extension on a CNY 2 billion bond repayment. U.S. futures also dipped amid concerns over Fed independence. GigaDevice Semiconductor surged 40% in its Hong Kong debut, while Dongfeng Motor rose 6.4%, alongside strong moves in Wuxi Biologics, Zijin Gold, China Taiping, and Henderson Land.

Earnings this week:

• Wednesday: Citigroup, Bank of America, Wells Fargo
• Thursday: First Horizon, TSMC, Morgan Stanley, Goldman Sachs, BlackRock
• Friday: No notable earnings

FX:

• Dollar Index rebounded Tuesday after initial losses post a cooler CPI report, which didn't change the Fed's stance. USD regained strength, while ADP showed steady job gains. Geopolitical tensions grew with Trump's rhetoric on Iran.
• In G10 FX, all currencies fell against the USD. CAD, EUR, and GBP had smaller losses while the JPY and Antipodeans underperformed. JPY was pressured by the “Takaichi trade,” following the PM's election announcement, with USDJPY peaking at 159.19, nearing potential intervention levels at 160. Finance Minister Katayama expressed concerns over the JPY's weakness, which temporarily eased USDJPY.
• AUD remained near the lower end of its 0.6673-6727 range despite exceeding expectations in Australian Westpac Consumer Confidence.
• CAD outperformed, buoyed by rising oil prices, with USDCAD in a narrow 45-pip range.

Commodities:

• Oil steadied after its biggest four-day gain in over six months as US officials planned a White House meeting on Iran, with WTI near $61 after a 9% rally and Brent above $65 on Tuesday, while President Trump urged Iranians to continue protests and said he would “act accordingly” after gauging fatalities.
• Gold held near a record as softer-than-expected US inflation supported further rate-cut bets amid elevated geopolitics, trading around $4,595 after touching $4,634.55, with December core inflation seen artificially depressed by the record-long shutdown. Silver hit a record $89.119 before easing to just above $87, building on a 148% rally since 2025 driven by a historic short squeeze and speculative frenzy.

Fixed income:

• Treasuries posted modest front‑end and intermediate gains, steepening the curve after softer core CPI; while gains partly faded, strong demand at the 30‑year auction pulled yields back toward session lows amid above‑average futures volumes and US‑morning block trades. In Japan, bond futures fell ahead of a five‑year sale, with the Ministry of Finance set to auction ¥2.5 trillion December 2030 notes.

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