Asian Pacific markets mixed

US stock indices posted broad-based gains on Thursday, with leadership rotating back towards banks and small-cap stocks. The Dow and Russell 2000 outperformed, adding 0.6% and 0.9%, respectively. Both were helped by renewed interest in Financials. The S&P 500 and NASDAQ gained 0.3% each.

Source: TN Trader

Semiconductor stocks also got some love. There was widespread buying across the sector after the Taiwan Semiconductor Manufacturing Company (TSMC) delivered blowout fourth-quarter results. TSMC also announced plans to raise capital expenditures this year. This news was welcomed by investors as cap ex promises did much to boost AI-adjacent corporations for most of 2025.

The news reignited enthusiasm for the AI trade and helped lift Nvidia and AMD by around 2% each. The sector certainly has room to the upside following the pullback over the last quarter of 2025. Sentiment was further buoyed by news of a US–Taiwan trade agreement, under which Taiwanese chip and technology firms will invest at least $250 billion in US production capacity.

Banking stocks also moved back into favour following strong earnings from Goldman Sachs and Morgan Stanley. Shares of Goldman jumped more than 4%, while Morgan Stanley climbed nearly 6%, helping to lift the Dow as both are major constituents.

Earlier in the week, JP Morgan, Wells Fargo, Citigroup and Bank of America all sold off immediately after releasing their quarterly updates. Citigroup bounced back yesterday, as did JP Morgan and Bank of America to a lesser degree. Wells Fargo has continued to drop and has not found any support yet. Overall, it would be fair to characterise these banking results as mixed. But investors have hopes that a clutch of high-profile private companies, including SpaceX and OpenAI, will spark an uptick in IPOs this year.

Stock index futures were comfortably firmer across the board on Friday morning. Despite a hiccup earlier in the week, investor sentiment appears positive. There has been a broadening out of ownership with many investors snapping up overlooked stocks, which appear to offer good value when compared to the tech giants.

At the same time, a lot of froth was blown off AI and other tech stocks last quarter. While there are concerns over the Trump administration’s meddling and open hostility to the Federal Reserve’s Chair, Jerome Powell, the overall takeaway is that lower rates are coming regardless. Meanwhile, equities don’t appear overbought, and volatility is low. Geopolitical risk has once again taken a backseat. What could possibly go wrong?

There was a slightly negative tone across European stock indices on Friday. Despite strength across US stock index futures, it appeared that investors were more comfortable taking some risk off the table, no doubt mindful that US markets will be closed on Monday for Martin Luther King Day.

European traders were busy digesting ongoing geopolitical risks and taking a less sanguine approach than their US counterparts. This made sense given the strength across European and UK equities, which have seen all the major indices hit fresh record highs. No doubt a short period of consolidation would be very helpful from a bullish perspective, and that looks like what is developing as things stand.

Source: TN Trader

Semiconductor stocks gave European indices a boost earlier in the week, with ASML, ASM International and BE Semiconductor all posting strong gains following TSMC’s results.

Attention has now shifted back toward political developments. European troops arrived in Greenland as tensions continue over President Trump’s push to acquire or annex the territory. While talks between the US, Denmark and Greenland are set to continue, the lack of diplomatic resolution has kept markets cautious.

The US dollar ceded ground against all the majors in early trade on Friday. The cash Dollar Index pulled back from the six-week high made yesterday, dropping below 99.00. This saw the Japanese yen rally off recent lows, with the USD/JPY running into resistance just below 159.50.

Source: TN Trader

The yen got a lift following renewed verbal warnings from Japanese officials regarding potential intervention to counter excessive currency moves. Japan’s Finance Minister Satsuki Katayama said overnight that nothing would be ruled out to support the yen. This could include coordinated intervention with the US. The currency also got a lift after Reuters reported that some policymakers at the Bank of Japan (BOJ) favoured hiking rates sooner than expected to give the yen a boost.

The BOJ meets next week. Investors have been selling yen after speculation rose that Prime ⁠Minister Sanae Takaichi was ready to cash in on her popularity by calling a snap election. While this is a big gamble, if it pays off, she could end up with a strong mandate for additional fiscal stimulus to help boost growth.

The weaker yen is positive for exporters, but it makes imports more expensive, which could trigger another rise in inflation. Most analysts believe that the authorities would intervene physically if the USD/JPY rose to 161.00-162.00.

Gold was little changed in early trade on Friday, and prices continue to consolidate around $4,600. There’s some evidence of resistance around $4,640, and this has proved difficult to clear. There has been some reduction in safe-haven demand as geopolitical risks around Iran have eased for now.

Source: TN Trader

President Trump appears in no rush to engage militarily. He said that according to the regime, the massacres of protestors have ended, and that those arrested will not be subject to capital punishment.

Let’s hope. Improved risk sentiment has led to a recovery in equities, and while the Fed is expected to ease monetary policy this year, the forecast is that they will keep rates on hold until the summer. This is weighing on the non-yielding metal.

Silver slumped sharply yesterday but subsequently rallied to end the session little changed. It was lower again overnight but then bounced off $89.50. Silver remains within sight of its all-time high of $93.60 hit on Wednesday.

The question for traders is whether these recent selloffs are a sign that silver is about to correct down sharply from here, or if it is simply building momentum for another squeeze higher? It remains significantly overbought when measured by its daily MACD, which is twice as high as levels reached at the peak of its last bull market in April 2011. That must cause some concern. But at the same time, there are a few rules where silver is concerned.

Source: TN Trader

Just ten days ago, following the extraction of Nicolas Maduro and his wife from Venezuela, crude oil slumped in a move which saw front-month WTI break under $56 per barrel. It looked as if it was on course to make new cycle lows by taking out the April 2025 low of $54.85. But it wasn’t to be. Since then, a perfectly normal bout of short covering was then entwined with a series of geopolitical events, which led to a sustained rally.

Source: TN Trader

This saw oil break out above the downtrend channel, which had been building since the summer, for an overall gain of just under 12% into this Wednesday’s high. Prices subsequently dropped. And while crude has not fallen back inside the trend channel, it does appear that resistance around $61.30 is proving significant.

News that the Trump administration had rowed back on its threat to target the Iranian regime following its despicable treatment of protestors has taken some of the heat out of the oil price. But it appears that there’s still a geopolitical premium in there. If that starts to drop out over the next few sessions, then the downtrend may resume. But upside risks remain for now.

Natural gas prices were little changed overnight but were a touch above the five-month lows hit yesterday. Weekly storage data showed a draw that came in below expectations, offering limited directional impulse. Trading conditions remain volatile, with wide intraday ranges continuing to attract short-term positioning rather than longer-term conviction.

Bitcoin has continued to consolidate above $95,000, a level which appears to be building as support. It’s a similar situation for Ether, which is also consolidating above support around $3,300.

Both cryptos have made a series of higher highs and higher lows over the past month, which is constructive from a bullish perspective. Despite this week’s sudden uptick in stock market volatility, price action has stabilised. This is another positive development as traders await fresh catalysts.

The VIX ticked modestly higher but remains anchored at relatively low levels, underscoring the market’s ongoing resilience. While geopolitical headlines and valuation concerns persist, volatility remains subdued, suggesting investors are still comfortable maintaining equity exposure heading into the new week.

Attention now turns to further banking earnings, with names such as M&T, PNC, Regions Financial and State Street reporting. Netflix, Visa and Johnson & Johnson headline next week’s calendar. Data flow remains relatively light in the US, and there’s a market holiday on Monday. Elsewhere, next week brings key data releases including UK CPI, global PMIs, inflation data and the Bank of Japan monetary policy meeting.

The US–Taiwan trade agreement remains a focal point, particularly for the semiconductor sector. The Japanese yen continues to draw support from intervention rhetoric. Precious metals have calmed down going into the weekend. Global equities continue to show resilience despite mounting macro and geopolitical crosscurrents. Crude oil is at a crossroads.