NAB Morning Call Greenland heats up; Japan’s Liz Truss moment
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Jan 20, 2026 Ken Crompton, a market economist and strategist at NAB, delves into the fallout from Trump's Greenland comments, discussing the turmoil in currencies and bonds. He highlights the sharp sell-off in Japan's bonds, likening it to a 'Liz Truss moment' due to unfunded tax cuts. The conversation covers the fragility of US-European trade ties, rising commodity prices, and the shifting landscape of global finance, emphasizing the implications for investors and policymakers alike.
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Greenland Shock Reverberates Through Markets
- The Greenland episode has rippled across currencies, bonds, metals and equities, signalling potential long-term strain in US-European ties.
- Markets are treating the geopolitical risk as more embedded than previous Trump episodes, pushing safe-haven metals higher and the dollar lower.
Markets Still Price A 'Back Down' But Grow Nervous
- The market still assumes a chance President Trump will back down, but current moves are broader than simple headline risk.
- Treasury yields and volatility are rising, though within ranges seen during prior tariff threats last year.
Treasury Warnings And A Danish Fund's Gesture
- Ken Crompton recalled Treasury Secretary Bessent advising calm and warning about bond market risks during prior tariff spats.
- A small Danish pension fund's divestment of $100m in US Treasuries provided a headline but had limited market impact.