Blog week ending, 30th January 2026
Markets:
- Local and global markets were mixed but ended the week slightly higher, with attention focused on the upcoming US interest rate decision, US technology company earnings and rising trade tensions.
- In local stock news, Santos rose as Australia’s second biggest gas company announced the first gas from its Barossa project 300km off the coast of Darwin.
- Volatility continued for rare earth producers including Lynas after the Trump administration flagged it might abandon a price floor for US critical minerals projects.
- The silver price surged past US$100 per ounce for the first time, buoyed by a softer US dollar, geopolitical tensions, China’s tightening export controls, and speculation.
- Gold prices surged well above US$5,000 per ounce for the first time, fuelled by speculation, rising trade and geopolitical tensions, and concerns regarding unchecked government spending and central bank money printing.
- Oil prices rose lifting prices to an almost four-month high, driven by supply disruptions and the build up of US military in the Middle East.
- The Australian dollar rallied to a three year high against the US dollar, moving through the US70c mark. The move was supported by attractive yields on Australian government bonds for foreign investors, rising commodity prices, and a softer US dollar.
Economics:
- Australia’s annual inflation climbed to 3.8% in December from November’s three-month low of 3.4%, coming in ahead of forecasts and remaining well above the RBA’s 2-3% target. Services inflation hit a two-year high and price pressures remained broad-based.
- Business confidence in Australia edged up in December, following an upwardly revised improvement in November. Business conditions strengthened, employment held steady and price measures ticked higher.
- Australian goods export prices rose by 3.2% in the December quarter with gold leading the charge. Import prices lifted by 0.9%.
- The US central bank left rates unchanged at 3.5-3.75% at its January meeting, in line with expectations. Two members voted against the hold, advocating for another rate cut. Comments were firmer than expected, implying future rate cuts may be limited.
- US manufacturing and services activity remained largely unchanged from December, aligning with expectations and remaining in expansion territory. Output growth accelerated and new orders rebounded but employment growth slowed to a six-month low.
- US consumer sentiment was revised higher in January from the preliminary reading, marking the second consecutive monthly increase and strongest reading since August.
- Eurozone manufacturing and service activity held steady with services slowing while manufacturing showed early signs of improvement.
- UK manufacturing and service activity saw the strongest upturn in activity since April 2024.
- German consumer confidence improved heading into February up from a two-year low in the prior period, topping market forecasts, but remain in pessimistic territory.
- The Bank of Japan kept its key short-term interest rate unchanged at 0.75% at its first policy meeting of 2026, maintaining borrowing costs at their highest level since September 1995. The vote was eight to one, with one member wanting a rise.
- India’s economy is forecast to grow 6.8-7.2% in the next fiscal year starting in April, according to government figures. This would indicate a slowdown from the current year’s growth estimate of 7.4%.
Politics:
- The probability of another US government shutdown continued to rise as last year’s extended funding agreement nears its expiration.
- US President Trump threatened to impose 100% tariffs on Canada if it pursues a trade deal with China, following Canadian Prime Minister Carney’s recent visit to Beijing and comments supporting stronger bilateral ties.
- The candidature for the US Federal Reserve Chair narrowed, with BlackRock executive Rick Rieder most likely to be nominated by President Trump to succeed Jerome Powell. An announcement is expected next week.
- US President Trump announced plans to raise tariffs on South Korean goods, including autos, citing delays by the South Korean legislature in approving a trade deal.
- US President Trump stated that Iran wants to make a deal as US warships move into key positions ahead of a potential strike. Meanwhile, US Gulf allies have declined to support any military action.
- The European Union and India struck a free-trade pact which was almost two decades in the making. More details to follow.
Written by Christopher Lioutas
Chairman – Harbourside Investment Management
