NAB Morning Call Escalate to de-escalate, again
Jan 22, 2026
Markets are reacting to geopolitical shifts as President Trump's Greenland U-turn steadies equities while keeping gold high. A surprising drop in Australia’s unemployment rate has traders eyeing a potential February interest rate hike. Meanwhile, the US sees stronger spending and GDP revisions, coupled with improving jobless claims. New Zealand struggles with a dip in retail sales, while Japan treads cautiously with its yen and monetary policy amidst upcoming CPI risks. Plus, expectations rise for global PMIs and retail figures across Europe and North America.
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Geopolitical De‑Escalation Calms Markets
- Markets calmed after President Trump's Greenland U-turn, lifting equities and easing immediate geopolitical risk concerns.
- Persistent uncertainty kept gold and silver supported despite the equity bounce.
Australian Jobs Data Raises RBA Hike Odds
- Australia reported a much lower unemployment rate at 4.1% with 65,000 jobs added, driving stronger RBA hike expectations.
- Markets moved to price roughly a 58% chance of a 25bp RBA hike in February and greater cumulative tightening for the year.
Watch Australia's CPI Before Positioning
- Monitor next week's Australian CPI closely as markets now price a higher chance of an RBA February hike.
- Re-assess positions if CPI confirms continued above-target inflation and capacity pressures persist.