Economic Overview - The U.S. unemployment rate unexpectedly fell to 4.38%, better than the expected 4.5%, with a downward revision of the previous month's rate from 4.56% to 4.54%[14] - December's non-farm payrolls added 50,000 jobs, lower than the expected 70,000, with previous months revised down by 76,000, indicating a weak labor market[14] - The Bloomberg Economic Surprise Index for the U.S. improved from 0.115 on December 31 to 0.124 on January 9, indicating a slight positive surprise in economic data[7] Inflation and CPI Expectations - Analysts predict December's U.S. CPI to show a month-on-month increase of 0.3% and a year-on-year increase of 2.7%[5] - The Federal Reserve's model forecasts a month-on-month CPI increase of 0.2% and a core CPI increase of 0.22%[22] - Inflation swaps indicate a significant upside risk for December's CPI, with expectations of a month-on-month increase of 0.45%[20] Market Sentiment and Asset Performance - U.S. equities experienced volatility but ended the week positively, driven by improved expectations for AI technology companies and a rebound in risk sentiment following the unemployment rate drop[1] - Commodities initially dipped but continued to rise, with silver prices increasing by 9.67% during the week[4] - The Nasdaq index outperformed the S&P 500, reflecting stronger sentiment in tech stocks[4] Political and Policy Uncertainty - The market is awaiting the U.S. Supreme Court's decision on the legality of Trump's IEEPA tariffs, with expectations that the ruling will not cause significant market disruption[25] - The uncertainty surrounding the tariff case has contributed to increased market volatility, particularly affecting equity performance[4] Future Economic Outlook - The report anticipates a potential economic rebound in Q1 2026, driven by the end of government shutdowns and a fiscal impulse contributing approximately 2.8% to GDP growth[5] - The combination of monetary easing (75 basis points cut since Q3 2025) and seasonal economic strength in Q1 is expected to favor risk assets such as equities and commodities[6]