MPC Morning Call 20th January 2026 – Index Futures lower on Trump EU threats
Stocks were closed for martin Luther king day overnight, although futures were 1% lower on Trumps aggressive Greenland and EU Tariff threats
WATCH ON YOUTUBE MPC Morning Call 20 th January 2026 – Index Futures lower on Trump EU threats Stocks were closed for martin Luther king day overnight, although futures were 1% lower on Trumps aggressive Greenland and EU Tariff threats European leaders are preparing a coordinated response to President Trump’s threat to impose 10% tariffs on eight European countries over their opposition to a U.S. purchase of Greenland, with the rate set to rise to 25% in June if no deal is reached. Options under discussion for an emergency summit in Brussels include a large retaliatory tariff package on U.S. goods and use of a new “Anti-Coercion” instrument that could restrict U.S. access to European investment, banking, and services, amid concerns the move amounts to economic blackmail and could cause modest growth drags but significant political fallout and damage to NATO cohesion. Analysts at Citi warn that rising tensions are pushing Europe to think more seriously about its own mutual defense clause (EU Article 42.7) and outline scenarios ranging from higher European defense spending within NATO to a low-probability “tail risk” of NATO breakup, which would be strategically beneficial to Russia but highly disruptive for Europe’s security order. In Washington, markets are focused on upcoming Supreme Court decisions that could reshape Trump’s economic agenda, including a high-stakes case testing his use of 1970s emergency economic powers to impose broad tariffs, where betting markets put relatively low odds on the Court fully siding with the president. The Court is also set to hear arguments over Trump’s attempt to fire Federal Reserve Governor Lisa Cook on disputed fraud claims, a move seen by many as a challenge to Fed independence, with investors hoping the justices maintain the institution’s protection from White House pressure. This legal uncertainty compounds questions about the durability of Trump’s tariff regime, including the new Greenland-related threats, as aides signal they may seek alternative legal pathways even if the current strategy is curtailed. Corporate and market news are unfolding against this fraught backdrop: Netflix is due to report earnings, with modest profit expectations but intense attention on its contested bid for Warner Bros. Discovery, where it faces a larger all-cash rival offer from Paramount Skydance and likely lengthy U.S. and European regulatory reviews. Intel will also report results as it cuts costs and tries to catch up in AI chips, supported by fresh investments from Nvidia, SoftBank and the U.S. government, plus a new AI-focused laptop chip aimed at easing worries over its next-generation process. On the macro side, gold has surged to record levels near 4,700 dollars an ounce on safe-haven demand linked to the Greenland tariff crisis and expectations of future Fed rate cuts, while silver and platinum have also hit new highs and copper has risen after China’s GDP slightly exceeded its 5% growth target, reinforcing views that physical assets and industrial metals are benefiting both from geopolitical risk and resilient Chinese demand Government Bond Yields Commodities, Energy & FX ASX Overnight: SPI 8813 (-0.03%) The Day Ahead: The market will we quiet due to the long weekend in the US. Trumps announcements may see some weakness due to uncertainty.
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