US jobless claims fall unexpectedly

US initial jobless claims fell to 198k in the week ending January 10, down from 207K the week prior and below expectations for a rise to 215k. The four-week moving average fell to a two-year low of 205k, suggesting that large-scale layoffs after the holiday period have not yet materialized. Continuing claims also ticked lower in the week ending Jan 3, declining to 1.884m from 1.9m.

The US and Taiwan have concluded a trade deal that lowers tariffs to 15%, along with a commitment from Taiwan's chip making companies to invest USD500bn in US manufacturing facilities.

Headline CPI inflation in Saudi Arabia accelerated to 2.1% y/y in December, up from a nine-month low of 1.9% the previous month. Inflation averaged 2.0% over 2025, in line with our long-held forecast. This marked an acceleration on the 1.5% average recorded in 2024, with faster growth in food prices the primary driver of this. Looking ahead to 2026, we expect that headline price growth will soften once more as housing price pressures recede, and we forecast an average annual inflation rate of 1.6% for the year

Real monthly UK GDP growth jumped to a five-month high in November, increasing 0.3% and beating consensus expectations for a 0.1% m/m gain. The improvement follows a 0.1% m/m decline in October and was driven by a rise in auto manufacturing (after a cyber-attack dented production at Jaguar Land Rover facilities in Q3) and services activity.

Eurozone industrial production rose 0.8% m/m in November, better than consensus expectations for a 0.5% gain. The November print marks the third consecutive month of gains and largely stemmed from increases in the production of intermediate and capital goods.

The German economy has seen positive annual GDP growth for the first time since 2022, with growth of 0.2% in 2025. The improvement stemmed from rises in both household and government expenditure, while investment and trade acted as a drag on growth.

Today’s Economic Data and Events

• 18:15 US industrial production (Nov): forecast 0.1% m/m

Fixed Income

• Better-than-expected jobless claims data sent US Treasuries lower on Thursday. The 10yr yield gained almost 4bps to 4.1694%, while the 2yr yield rose by 5bps to reach 3.5641%.
• Moves in European bond yields were mixed. The 10yr UK Gilt yield rose by just under 5bps to 4.387%, largely offsetting the previous day’s drop.

FX

• The dollar spot index rose 0.3% on the day, on the back of lower claims numbers. EURUSD fell 0.3% to 1.1609, while GBPUSD dropped by 0.5% to 1.3381. USDJPY gained 0.1% to 158.63.
• In emerging economies, USDEGP fell by less than 0.1% to 47.29 and USDTRY rose 0.1% to 43.2256.

Equities

• Strong earnings results from TSMC drove an AI related rally in US equity markets. The S&P 500 gained by 0.3%, the Dow Jones rose 0.6% and the NASDAQ increased by 0.3%.
• In Europe, the Euro Stoxx 50 index gained 0.6%, the FTSE 100 rose 0.5%, the DAX increased by 0.3%, while the CAC 40 fell 0.2%.
• In local markets the DFM was flat in the day, while the ADX rose 0.4%. The Tadawul fell 1.2%.

Commodities

• Oil prices fell back as regional geopolitical tensions cooled. Both Brent and WTI futures fell 2.8% to USD 63.76/b and USD 59.19/b, respectively.
• Metal prices saw small declines on Thursday after achieving record highs during Wednesday’s session. Gold fell 0.2% to USD 4,616.15/troy oz while silver dropped by 0.9% to USD 91.61/troy oz.