Market Report.
🌍 Some calm has returned to the markets, as it appears that an agreement has been reached on Greenland.
📰 However, as we will see below, as with other agreements signed by Trump this year, they seem to benefit only one of the parties, are announced as a unilateral success, and then nuances from the other party come to light, as with the agreements with Japan and the EU, where the respective governments said that it was not exactly as Trump had described it.
🎉 In any case, let’s not spoil the party for investors; this is good news, at least for now.
🗞️ The New York Times has reported that the upcoming US-Greenland agreement will closely resemble the UK-Cyprus deal, allowing the US to establish “small pockets of land” within Greenland. This arrangement will grant the US involvement in Greenland’s mineral rights, ensuring that Russia and China are kept at bay. Additionally, a “Golden Dome” defense system will be installed, paving the way for US-backed infrastructure investments. Meanwhile, the situation raises concerns that Europe may again be falling behind in terms of influence in the region.
🎙️ President Trump’s interview with CNBC’s Joe Kernen at the World Economic Forum in Davos has given some details about the current situation. Trump announced that he and NATO Secretary General Mark Rutte have “formed the framework of a future deal with respect to Greenland.” Trump said “we have a concept of a deal” over the Arctic island.
🧭 The framework deal involves access to mineral rights in Greenland for the U.S. and its European allies, as well as collaboration on a proposed “Golden Dome” defense system.
⏳ Trump said the deal would last “forever”, indicating a long-term arrangement.
💎 Greenland is the 8th largest holder of rare earth reserves globally, which are critical minerals used in various industries and military applications. The land is estimated to hold reserves of natural resources worth as much as $5 trillion. This aligns with Trump’s broader goals of boosting domestic production of critical minerals and strengthening U.S. military capabilities.
⚖️ The agreement has prompted Trump to pull back the threatened tariffs on European countries that were set to take effect on February 1. Details of the framework are still elusive, with Trump describing it more as a “concept” rather than a fully fleshed-out deal, saying “It’s a little bit complex, but we’ll explain it down the line.”
❓ As we said in the introduction to this report, is something missing? That’s right, it doesn’t seem that the other party has gained anything it didn’t have before. Even the US’s promises to defend Danish territory were something Denmark had already been counting on for years due to its membership of NATO, so what have they gained by partially ceding their sovereignty?
⚠️ An agreement in which one of the two parties gains nothing means that it can be broken without significant loss to that party.
🧠 However, to understand Trump’s logic about Greenland, let us analyze his words yesterday in Davos, because they were enlightening:
🗣️ Trump asserted that “Greenland is OUR territory” and is part of the North American hemisphere under U.S. control. He claimed there is no force in NATO capable of protecting Greenland except the United States, and that U.S. acquisition of Greenland would strengthen NATO, not undermine it.
📜 Trump acknowledged that during World War II, Denmark was unable to defend itself or Greenland against Germany, and the U.S. was compelled to intervene and hold Greenland, though he said it was “stupid” to later return it to Denmark.
🛡️ He stated the U.S. does not need Greenland’s rare minerals, but rather seeks to acquire it for national security reasons and to build the “Golden Dome” defense system.
🚨 While Trump said he will not use force to seize Greenland, he warned the U.S. would be “unstoppable” if it did use excessive force, implying the threat of military action.
🌍 He also said that without the United States, some European nations would not exist and many would speak German. “Without us, right now you’d all be speaking German and a little Japanese perhaps”.
🌐 The new proposal made by Trump to establish a world council -Board of Peace- that is independent of the United Nations also has unique aspects.
🤝 Germany, the UK and France have rejected to join the US-led Gaza Board of Peace. Trump claims Russia’s President Putin has agreed to join his “Board of Peace”. President Putin says Russia is ready to contribute $1 billion from frozen Russian assets in the US to President Trump’s “Board of Peace” and accepts Trump’s offer to join.
✈️ U.S. envoy Steve Witkoff and Jared Kushner are set to travel to Moscow today for peace talks with Putin. President Trump said he plans to meet with Ukrainian President Volodymyr Zelenskyy.
🏛️ The State Department has told U.S. diplomats to stress that the Board of Peace is meant to complement, not replace, the United Nations.
🛢️ On the commodity markets, there are also news.
🇱🇾 Libya’s decision to reopen its lucrative oil industry to foreign investment is seen as an opportunity for major oil companies to gain access to significant reserves. Libya is seeking foreign investment in its oil industry for the first time in almost two decades, as the country emerges from years of economic devastation.
⛽ Libya sits atop one of the world’s largest petroleum reserves, making it an attractive prospect for Big Oil companies looking to replenish their reserves. Other countries in the region, such as Algeria, Egypt, and Tunisia, are also wooing foreign oil companies and opening up their energy sectors.
📉 More oil coming online from Libya and the region could put downward pressure on global oil prices, posing a challenge for Saudi Arabia and the OPEC+ cartel.
🇰🇷 South Korea’s economic growth slowed to 1.5% in the October-December period, missing the 1.9% forecast by economists. On a quarterly basis, GDP contracted 0.3%, marking the steepest slowdown since Q4 2022. For the full year 2025, South Korea’s economy grew 1%, its slowest annual expansion since 2020.
🏗️ The slowdown was driven by a sharp decline in construction investment (-3.9%) and a pullback in exports (-2.1%), particularly in motor vehicles and machinery.
📌 Factors Contributing to the Slowdown: Tariff tensions and the threat of higher U.S. tariffs on Korean semiconductor exports, Weakening of the Korean won against the U.S. dollar, leading to capital outflows & Subdued inflation, allowing the central bank to keep interest rates unchanged
🇯🇵 Japan’s exports rose for a 4th straight month in December, up 5.1% year-on-year, but less than the expected 6.1% increase. Exports to the U.S. fell 11.1% in December, after rebounding in November due to a trade agreement that set a 15% tariff baseline.
⏱️ The temporary boost from reduced U.S. tariff uncertainties had mostly run its course by November.
💻 Exports to Asia jumped 10.2% on strong demand for chips and electronics for data centers amid the AI boom. Exports to China were up 5.6%. Total imports grew 5.3%, leading to a trade surplus of 105.7 billion yen, lower than the expected 356.6 billion yen.
📊 For the full year 2025, exports rose 3.1%, while imports grew just 0.3%, narrowing Japan’s trade deficit by 52.9% to 2.7 trillion yen.
🏦 The milder-than-expected tariff impact led the government to revise its economic growth forecast for FY2025 to 1.1%, up from 0.7% previously. The Bank of Japan is expected to signal readiness for further interest rate hikes at its upcoming policy meeting to contain inflationary pressures.
🚀 Semiconductor stocks advanced globally, driven by comments from Nvidia CEO Jensen Huang at the World Economic Forum in Davos. Huang’s remarks helped reinforce investor enthusiasm for the artificial intelligence (AI) technology trend.
💬 Huang’s influential comments at Davos appear to have further fueled this optimism around the semiconductor sector’s role in powering the AI revolution.
📈 Samsung Electronics, a major memory chip maker, gained up to 5% to reach an all-time high, contributing to South Korea’s benchmark Kospi index surpassing 5,000 for the first time.
📈 The Philadelphia Semiconductor Index, a key industry benchmark, rose over 3% to a fresh record high on Wednesday, with Nvidia being a key contributor.
🔮 The strong performance of global chip stocks indicates that investors are increasingly bullish on the growth prospects of the semiconductor industry, especially as it relates to the rapid development and adoption of AI technologies.
⚠️ But don’t forget that we have mentioned in previous reports that China could be about to make a move in this industry, and that could spell disaster for US companies involved in this business.
Market View.
📈 Markets have staged a modest recovery, albeit without much conviction, following the agreement announced by Trump, which he has framed as a unilateral victory. E‑mini S&P 500 futures are moving back towards the 6,950‑point level, while Nasdaq 100 futures have climbed to around 25,665 points.
💵 The US Dollar Index (DXY) has also recovered, once again highlighting the strength of the world’s reserve currency, now trading above 98.80 points. This move has weighed on EUR/USD, which has slipped back towards the 1.1685 area.
🏦 US Treasuries have also recouped part of their recent losses, with 10‑year yields easing back to around 4.24%.
🌍 European markets are also higher. DAX 40 futures are trading close to the 25,000‑point mark, while Euro Stoxx 50 futures briefly approached 6,000 points in recent hours and are currently pausing around 5,970 points.
🛢️ The oil market also interpreted the news positively, with Brent crude rising above $65 per barrel.
🥇 Gold futures have pulled back amid the apparent reduction in risk aversion. After flirting with the $4,900 area, prices have eased to around $4,828 per ounce.
₿ Bitcoin, which fell to levels near $87,200 in recent hours, has also bounced higher and is currently trading around $89,765.
