Fra Danske Bank:
Sofie Grundvad Pedersen, [email protected] , Assistant Analyst
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In the US, December CPI is expected to rise, reversing November distortions from data delays and Black Friday discounts. We forecast headline CPI at +0.3% m/m SA (2.7% y/y) and core CPI at +0.4% m/m SA (2.8% y/y), above consensus. While an even higher reading cannot be ruled out, any unusually strong monthly figures should be viewed as distorted. Energy prices are expected to continue capping headline inflation. Fed speeches by Musalem and Barkin are scheduled for the evening.
In France, the prime minister faces two motions of no confidence over the government’s handling of the EU’s Mercosur trade agreement, though both are unlikely to pass due to political divisions. Meanwhile, uncertainty surrounds the timing of a potential no-confidence vote tied to the 2026 budget, as PM Lecornu may invoke article 49.3 to bypass parliamentary approval and adopt the budget. Our base case remains that a 2026 budget will eventually be passed without new snap elections and include a budget deficit of around 5.4% of GDP.
Economic calendar
In geopolitics , President Trump announced that any country conducting business with Iran will face a 25% tariff “on any and all business being done with the US”. According to his post on Truth Social, the tariff on imports from Iran’s trading partners is effective immediately. However, Trump provided no further details, including whether the tariff would apply universally to all of Iran’s trading partners. Currently, the only secondary tariff in place targets India for purchasing Russian oil. The announcement comes ahead of a much-anticipated Supreme Court ruling on the legality of many of Trump’s broader tariffs.
Orsted , the Danish renewable energy company, is set to resume a major wind turbine project in the US, despite efforts by the Trump administration to shut it down. On Monday evening, a court ruling overturned the construction halt affecting two of Orsted’s wind farms in the US. The judge granted approval for Orsted to continue work on the Revolution Wind project, which is expected to be fully completed in the second half of 2026.
In the euro area, investor sentiment showed a stronger-than-expected improvement in January, as the Sentix Investor Confidence indicator rose to -1.8 (cons: -4.9, prior: -6.2). This marks the highest level since July and signals a positive start to 2026, with improved sentiment reflected in broad equity indices.
In Denmark , CPI inflation dropped to 1.9% in December from 2.1% in November, driven by a sharp decline in fuel prices. Food prices continued their downward trend, falling another 2% in December, mirroring last year’s movement. Looking ahead, January inflation is set for a big dip as the removal of the electricity tax takes effect, likely bringing inflation close to 1%.
In Japan , rumours of a snap election are circulating, with LDP members suggesting PM Takaichi may dissolve the Lower House when it reconvenes on 23 January. Her cabinet enjoys strong public support, making this a good opportunity to aim for a parliamentary majority. However, this strategy carries risks, as seen in the political fallout for her predecessor after a similar move in autumn 2024. These uncertainties have already weighed on the yen, which traded weaker on Friday amid speculation. A shift to election campaigning could amplify political instability, posing further risks to JPY in the near term.
Equities : Global equities staged a late-session rally to end the day 0.2% higher. The early part of the trading session saw remarkable stability in light of the US DoJ’s subpoena of the Fed. Even the VIX was, after a brief spike, grinding lower through the day. As such the “relentless” rally in equities this year continued. S&P500 ended 0.2% higher, Nasdaq 0.3% higher, Russel2000 0.4% higher and Stoxx600 0.2% higher. Futures are marginally lower overnight. Overnight, the yen declined following media reports on new PM Takaichi intends to call for snap elections.
FI and FX: USD/JPY has moved higher overnight from the 158.00 levels towards 158.75 (weakest since 2024) and Japanese yields have risen, with the 10y JGB about 6bp higher, as reports suggest PM Takaichi may call for snap elections soon. EUR/USD trades rather stable within a 1.1660 and 1.1670 range overnight and US yields are also steady overnight with 10y UST at 4.18%. In the near-term, the developments around the DoJ subpoenas sent to the Fed may overshadow macro releases, including today’s US CPI figures. In Scandies, EUR/SEK has dipped below 10.70 with the next strong support level at the 2025 low (3 April) at 10.6652.
See also our in-depth FI and FX morning comment *
Reading the Markets USD – The Fed’s liquidity regime change , 13 January
Geopolitical Radar: What’s next after US assault on Venezuela? , 9 January
Euro Area Macro Monitor – 2025 ends with a solid growth momentum , 9 January
China Headlines: US-China relations take a hit after Venezuela raid, PMIs recover, CNY strengthening continues , 8 January
The Nordic High Yield Market – Q4 25: Like a year on its own , 8 January
Executive Briefing – Volatile politics, steady economies , 7 January
Flash Comment Denmark – Greenland has only limited impact of the Danish economy , 7 January
Report completed: 13 January 2026, 07:00 CEST
Report first disseminated: 13 January 2026, 07:30 CEST
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