Markets Today: European economies expand, gold and silver plunge as markets await Fed Chair announcement and PCE data

[Ben Graham]

Asia Market Wrap - Warsh to lead the Fed? Markets optimistic

• Global markets react to Fed news
• European economies showed surprising resilience and growth at the end of last year.
• Commodity price plunge, Gold down over 7%, Silver down 10%
• US PCE data and Trump announcement of Fed Chair later

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

Global stock markets fell and the US dollar rose on Friday after President Trump signaled he has chosen Kevin Warsh to be the new head of the Federal Reserve.

Although Warsh generally prefers lower interest rates, investors view him as a "safe" choice who is unlikely to take extreme risks with the economy compared to other candidates.

This news hit Asian markets hard, causing them to drop 1.4% on their worst day this month, driven largely by significant losses in Chinese companies.

Despite this bad day, Asian stocks are still on track to finish the month with their best overall performance in three years, while Japan's Nikkei saw only a very small decline of 0.1%.

European economies resilient

The largest economies in Europe grew steadily at the end of last year, showing surprising strength despite facing many global challenges.

Even though exports were low and unpredictable US trade policies caused uncertainty, increased spending by regular people and businesses kept the economy moving forward.

This growth defied expectations that the region would suffer from trade wars, competition from China, and nearby military conflicts.

Germany and Italy both grew by 0.3%, beating predictions, while Spain performed the best with strong 0.8% growth. France also expanded by 0.2%, which was exactly what experts had expected.

European Session - Stocks eye positive end to January

European stock markets rose slightly on Friday, putting them on track to finish January with a 2.6% gain.

If this holds, it will be the seventh month in a row that stocks have gone up, the longest winning streak since 2021. Investors are feeling optimistic because of strong company profits, even though they remain worried about global trade wars and political tensions.

Big brands helped lead the market higher; Adidas shares jumped 4% after announcing record sales and a plan to buy back stock, while Swatch rose over 7% thanks to solid growth. However, experts warn that this "New Year excitement" might fade if companies don't keep performing well.

On the FX front, the US dollar strengthened on Friday, with the index that tracks its performance against six major currencies rising 0.37% to 96.48.

The dollar gained 0.5% against the safe-haven Swiss franc, while other major currencies lost value against the greenback.

The Euro dropped 0.3% to $1.1932, and the British Pound fell 0.4% to $1.3765.

Additionally, the dollar climbed 0.5% against the Japanese yen, reaching a level of 153.88 yen.

Currency Power Balance

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Source: OANDA Labs

Gold prices crashed more than 6.4% on Friday due to rumors that the next head of the Federal Reserve might prefer higher interest rates.

Despite this sudden drop, Gold is still on track to record its best single month of gains since 1982.

This historic rise has been driven by investors rushing to buy the metal as a safe place to protect their money during these uncertain economic and political times.

Silver and Platinum also experienced massive selloffs with Silver down around 10%.

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Economic Calendar and Final Thoughts

Data is largely thin today with Euro Area GDP released already. Geopolitical developments likely remain key with tariffs and the evolving US-Iran situation worth monitoring.

In the US session we will get some high impact data in the form of PCE data which is the Feds preferred inflation gauge.

Market participants are also distracted by news from the US, as they wait for President Trump to announce his choice for the next head of the Federal Reserve later today, with Kevin Warsh seen as the favorite.

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Chart of the Day - FTSE 100

From a technical perspective, the FTSE 100 index has bounced off the 100-day MA on the four-hour timeframe once more. This seems to a be a recurring theme this week.

This puts the index looking like it is on its way to fresh highs..

Immediate resistance rests at 10243 with a break above eyeing the 10277 handle before the 10300 handle comes into focus.

A move lower here may find support at 10178 before the psychological 10000 handle and the 200-day MA at 9973 comes into focus.

FTSE 100 Index Daily Chart, January 30, 2026

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Source: TradingView.com (click to enlarge)

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