MIDDAY WRAP: European indices under pressure from the Greenland dispute, Japan announces snap elections 🎙️

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European indices are seeing a fairly sharp sell-off driven by tariff threats from US President Donald Trump. Equity indices are down between 1.00% and 1.80%.
Germany’s DE40 is down 1.50%, France’s FRA40 is down 1.60%, Poland’s WIG20 is down 0.80%, and Italy’s ITA40 is down 1.40%. The pan-European Euro Stoxx 50 is down 1.77%. The euro remains relatively strong, with EURUSD up 0.34%.
Trump’s comments suggesting new tariffs on Europe are aimed at pressuring policymakers—particularly Denmark—over negotiations related to Greenland. Trade policy has once again moved to the forefront, and the turbulence is undermining confidence in recent US–EU trade agreements.
The European Union is considering retaliatory tariffs of up to €93 billion on imports from the US, with measures prepared last year potentially being reactivated.
EU officials have also raised the possibility of using the anti-coercion instrument, which could restrict US companies’ access to the EU single market. Nevertheless, most member states continue to favor dialogue.
France and Germany are coordinating a joint response toward the US, while broader EU leadership is treating retaliatory measures primarily as leverage ahead of high-level meetings with Trump during the World Economic Forum in Davos.
The Davos Forum begins this week amid elevated geopolitical tensions.
Eurozone inflation data for December confirmed headline CPI at 1.9% y/y, while core inflation remained elevated at 2.3%, reinforcing the European Central Bank’s cautious stance.
Persistently high services inflation (3.4%) continues to limit the ECB’s ability to signal rapid policy easing.
In Asia, Japan’s prime minister announced snap elections scheduled for early February, seeking to consolidate political power.
Japanese authorities have signaled readiness to intervene against excessive or speculative moves in the currency market.
The European Union is also preparing new regulations aimed at reducing dependence on Chinese suppliers in critical infrastructure areas, including telecommunications, solar energy systems, and security technologies.
On the corporate front, Tesla drew attention after Cathie Wood of ARK Invest argued that the company is transitioning from a traditional automaker into a high-margin technology and robotaxi platform.
Canada’s decision to cut tariffs on electric vehicles produced in China may support Tesla’s export strategy.

19 January 2026, 10:18 AM

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Morning wrap (19.01.2026)

Forex
Indices
Economic reports

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MIDDAY WRAP: European indices under pressure from the Greenland dispute, Japan announces snap elections 🎙️

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