Another week, another strong showing from the US consumer

Wells Fargo Research Team Wells Fargo

Summary

United States: Another week, another strong showing from the US consumer

Robust retail sales data were the main story on the U.S. economic data front this week. Elsewhere, data for industrial production and jobless claims offered additional evidence that the U.S. economy remains on solid footing.
Next week: New Home Sales (Tue.), GDP (Thu.), Personal Income & Spending (Fri.)

International: Israel-Iran tensions come to the surface

Recent tension between Israel and Iran shows that finding a steady state in the Israel-Hamas war remains elusive. We continue to believe military conflict will remain contained and not expand into Tehran or the broader Middle East. In England, inflation continues to ease, but perhaps not as quickly as policymakers may have hoped for.
Next week: Middle East Geopolitical Tensions, India Prime Minister Election (Apr.-Jun.), Central Bank of Turkey (Thu.)

Interest rate watch: Will home buyers ever get some relief from elevated mortgage rates?

The 30-year fixed rate mortgage has risen recently, but it still remains below last autumn's high-water mark of 8%.

Topic of the week: Steel your nerves, Biden proposes higher tariffs on Chinese imports

This week, President Biden announced a plan to more than triple tariffs on Chinese aluminum and steel products. As stated in our recent special report, tariffs are often imposed to promote demand for local products and spur domestic production, but the effects of tariffs on Chinese-imported goods have been marginal for U.S. industrial production over the past six years. Will the same hold true with Biden's proposed policy?

Download the Full Report!

Author

Wells Fargo Research Team

Wells Fargo

EUR/USD steadies near 1.1650 ahead of US Nonfarm Payrolls

EUR/USD holds ground after five days of losses, trading around 1.1650 during the Asian hours on Friday. Traders remain cautious ahead of the US Nonfarm Payrolls report, which is expected to offer further insight into labor market conditions and the Federal Reserve’s policy outlook. December NFP is forecast to show job gains of 60,000, down from 64,000 in November.

GBP/USD: Further weakness could challenge 1.3400

GBP/USD remains under unabated selling pressure on Thursday, slipping to fresh three-day lows around 1.3415 in response to further improvement in the sentiment surrounding the Greenback ahead of Friday’s key NFP data.

Gold defends $4,450, looks to the crucial US NFP report

Gold struggles to capitalize on the previous day's goodish move up from the vicinity of the $4,400 mark and attracts some sellers while defending $4,450 in the Asian session on Friday. The critical US employment details will offer more cues about the Fed's rate-cut path, which, in turn, will influence the US Dollar price dynamics and provide a fresh impetus to the non-yielding bullion.

Forecasts for Payrolls are all over the place

Yesterday’s data put the kybosh on the idea the Fed needs to cut rates fairly urgently to protect the labor market. The jobs component of the ISM services index was nicely over 50, and that rising JOLTS voluntary quits rate also points to no real heartache in labor.

2026 economic outlook: Clear skies but don’t unfasten your seatbelts yet

Most years fade into the background as soon as a new one starts. Not 2025: a year of epochal shifts, in which the macroeconomy was the dog that did not bark. What to expect in 2026? The shocks of 2025 will not be undone, but neither will they be repeated.

XRP slides as institutional and retail demand falters

Ripple is trading down for the third consecutive day on Thursday amid escalating volatility in the cyrptocurrency market. After peaking at $2.41 on Tuesday, its highest print since November 14 amid the early-year rally, XRP has quickly ran into aggressive profit-taking.