Hello Morning Bid readers!
Greenland may soon go back to being a large "piece of ice" in the minds of many investors, but this past week's Arctic saga is meaningful nonetheless. It's a reminder that President Donald Trump can always find an off ramp – even when one didn't appear to exist a few hours before – and also that no deal with the U.S. can now ever be considered final.
While major U.S. equity indices posted their biggest one-day percentage drops in three months on Tuesday when tensions over Greenland were at a fever pitch, they rallied following Wednesday's news that the "concept of a deal" over the self-governing Danish territory had been reached, meaning President Trump would not be slapping additional 10% tariffs on several European allies.
The president – who gave a bellicose speech at the World Economic Forum in Davos, Switzerland on Wednesday – has now indicated that the U.S. will secure "total and permanent" access to Greenland.
But the Davos détente is not the end of the story, as the U.S. president's willingness to reopen seemingly closed trade deals as a negotiating tactic in non-economic disputes will only increase uncertainty among businesses and trading partners.
Reflecting this anxiety, the greenback remains weak, with the dollar index on track for its biggest weekly drop since June. Safe haven gold continues to move higher, breaking through $4,900 per ounce. European stocks are set to end the week in the red for the first time in over a month, and the U.S. rally looks like it might be stalling.
The Greenland furore also highlighted a few lingering issues investors should keep in mind: Europe's heavy dependence on U.S. gas remains a massive weak spot, the bond market is likely still Trump's kryptonite and Europe's "long USA" trade looks heavily stretched.
The other big market move this week was in Japan. The yield on the 10-year Japanese government bond jumped over 18 basis points in two days to hit a 27-year high of 2.38% on Tuesday. This was after Prime Minster Sanae Takaichi – who has promised to spur Japanese growth with massive stimulus – called a snap election for February.
The yen moved around a bit on Friday, even as the Bank of Japan kept interest rates unchanged. At one point, the currency quickly strengthened to around 157 per dollar, which some interpret as a sign that government intervention is coming.
Amid this week's drama, some may have forgotten that Tuesday marked the one-year anniversary of Trump's second inauguration. Even though domestic political tensions remain high, the U.S. economy continues to perform remarkably well, growing at a revised annual pace of 4.4% in the third quarter of 2025.
But one U.S. industry might be getting particularly anxious about the direction of U.S. policymaking: oil and gas. While the president's embrace of the energy sector was welcomed at first, it is now starting to feel a bit awkward.
Looking to next week, a Federal Reserve meeting is on the docket. Inflation remains a bit high for comfort, with the personal consumption expenditures price index rising 2.8% in the 12 months through November, just above the 2.7% rise notched the prior month. (This data is still somewhat noisy due to last fall's government shutdown.)
Ultimately, no one expects the Fed to move next week, so most of the market chatter will inevitably be about who will replace Chair Jerome Powell when his term ends in May. Stay tuned!
For more commodities and markets news, check out Reuters Open Interest. You can learn which U.S. states are apt to be most impacted by the data center building blitz, find out why American aluminium buyers are paying such a high premium (it's not just tariffs), and discover which region's defense stocks could be surprise winners from the ongoing geopolitical turmoil.
As we head into the weekend, check out the ROI team's recommendations for what you should read, listen to, and watch to stay informed and ready for the week ahead.
I'd love to hear from you, so please reach out to me at anna.szymanski@thomsonreuters.com.
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