Markets Today: Chinese Inflation Edges Higher, Gold Steady with NFP & Supreme Court Decision Now in Focus

[Ben Graham]

Asia Market Wrap - Nikkei Rallies, Finishing the Week 3.2% Higher

Most Read: 2026 US Dollar Forecast: How the Fed, Government Spending, and AI Will Drive Volatility

Asian stock markets fluctuated within a narrow range on Friday as investors waited cautiously for the upcoming US jobs report and a major Supreme Court ruling on President Trump’s tariffs.

Despite an initial dip, Japan’s markets ended the day strong. The Nikkei index climbed 1.6% to close at 51,939.89, securing a 3.2% gain for the week. This rally was largely powered by Uniqlo’s parent company, Fast Retailing, which surged nearly 11% after posting strong earnings; this single stock was responsible for more than two-thirds of the Nikkei's total rise for the day.

Japanese automakers also had a good day, boosted by a weaker yen (which increases the value of their overseas profits) and a sense of relief regarding trade tensions. Investors were reassured that China’s new export ban on "dual-use" military items would not completely cut off supplies to civilian Japanese companies.

Mazda, Toyota, and Honda all posted solid gains. However, not all news was positive; the retailer Aeon slumped nearly 8% after its earnings disappointed investors. Traders are now looking ahead to the earnings report from robot-maker Yaskawa Electric, due later today, which is seen as a key indicator for the health of the manufacturing sector.

Please note that Japanese markets will be closed this coming Monday for a holiday.

Chinese Inflation Edges Higher, Near 3-Year Highs

China's annual inflation rate rose slightly to 0.8% in December 2025, up from 0.7% the previous month. While this is the highest level since early 2023, it still missed the 0.9% rate that experts had predicted.

This marks the third month in a row that consumer prices have increased, driven largely by a jump in food costs, specifically fresh vegetables and fruit which saw their biggest rise in over a year.

Outside of food, prices remained mostly stable. Clothing and healthcare costs went up, but housing prices dipped slightly, and transportation costs continued to fall. Core inflation (which ignores volatile food and energy prices) held steady at 1.2%, its highest point in nearly two years.

Overall, inflation for the entire year was flat, finishing well below the government's target of around 2%.

European Session - European Shares Higher as Rio Tinto Eyes Glencore Takeover

European stock markets opened higher on Friday, bouncing back from two days of losses caused by weak earnings and political tension.

The STOXX 600 index is now on track for its best winning streak since May, largely thanks to a massive 8% jump in shares of Glencore. This surge happened after rival mining giant Rio Tinto announced it is in early talks to buy Glencore, a deal that would create the world's largest mining company. While Glencore stock hit an 18-month high on the news, Rio Tinto's shares dropped 2.2%.

The broader European market rose 0.4%, led by gains in energy and mining companies. Other notable movers included Anglo American, which rose 2.4% on news that its deal with Teck Resources is likely to be approved by European regulators.

Tech stocks also performed well; ASML gained 2.1% and STMicroelectronics rose nearly 1% after positive revenue reports from industry partner TSMC.

Investors are now waiting for the crucial US jobs report later today, which is expected to show that hiring slowed down in December.

On the FX front, the US dollar rose slightly on Friday, reaching its highest level in a month, as investors waited for the upcoming jobs report and a major Supreme Court ruling on President Trump's tariffs. The dollar also strengthened against the Japanese Yen for the fourth straight day.

In contrast, the Euro dropped to $1.1644 after data showed that German exports unexpectedly fell, even though industrial production actually improved.

Other major currencies struggled as well: the British Pound fell 0.2%, while the Australian and New Zealand dollars both dropped, with the "Kiwi" hitting its lowest point since early December.

In the cryptocurrency market, Bitcoin fell 1% to around $90,170, and Ether slid nearly 1% to roughly $3,085.

Currency Power Balance

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Source: OANDA Labs

Gold prices recovered some of their earlier losses on Friday as investors balanced geopolitical risks against other market factors while waiting for the upcoming U.S jobs report.

Although gold dipped slightly to about $4,466 per ounce, it is still on track for a weekly gain of over 2%. High prices have reduced buying in India, but demand in China has increased following the holidays.

Other precious metals also performed well: silver rose 0.6% to roughly $77 (heading for a 6% weekly gain), while platinum and palladium also moved higher, with palladium surging over 3% to $1,840.

Oil prices climbed for the second day in a row, rising about 1.3% due to concerns about supply disruptions in Venezuela and unrest in Iran.

Brent crude reached $62.82 per barrel and US crude hit $58.52. After a strong jump on Thursday, both types of oil are set to finish the week with gains, marking their third straight weekly increase.

Read More:

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Economic Calendar and Final Thoughts

The European session is set to see the release of Euro Area retail sales data before attention turns to the US session.

This week has given us mixed signals about the US economy: the service sector looks good and private hiring is decent, but the number of open jobs has disappointed. While layoffs dropped significantly in December, this is mainly because companies did most of their firing earlier in the year. In fact, for all of 2025, job cuts jumped 58% to over 1.2 million the highest level since 2020.

Despite that gloomier yearly picture, traders are feeling a bit more optimistic about today’s jobs report. The unofficial "whisper" expectation among traders has risen to 65,000 new jobs, while the official expert forecast sits at 70,000.

However, the most important number to watch today might actually be the unemployment rate, as the Federal Reserve is focused heavily on how many people are out of work. It is expected to improve slightly to 4.5%.

If we see that improvement combined with 50,000 to 100,000 new jobs, it will likely be enough to stop the Fed from cutting interest rates in January and keep the chances of a March cut low. My own outlook is for 50,000 new jobs and an unemployment rate of 4.5%.

Additionally, the US Supreme Court is scheduled to rule on tariffs today. Most experts expect the court to rule against the tariffs, which could actually boost the dollar, as investors believe removing these trade barriers would strengthen the job market and encourage the Federal Reserve to keep interest rates higher.

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Chart of the Day - FTSE 100

From a technical perspective, the FTSE 100 index has finally breached the psychological 10000 mark.

Price has pulled back since with bouts of volatility and that shouldn't be a surprise. When price breaches such psychological levels we do tend to see some volatile price swings.

The one concern for bulls at the moment is that the index is hovering in overbought territory which means a pullback may be imminent.

Immediate support which may be tested in the near-term include the 9973 and 9943 handles respectively.

However, a key level on the four-hour chart for bullish continuation will be the psychological 10000 mark. A break of this level could bring a deeper correction into play.

FTSE 100 Index Daily Chart, January 9, 2026

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Source: TradingView.com (click to enlarge)

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