Weekly Market Review - 17-01-2026

Eloise Bell
19 hours ago
5 min read

Global markets entered the second half of January with a cautious but constructive tone, as investors balanced resilient economic data against ongoing inflation, policy and geopolitical uncertainties. UK equities outperformed their US counterparts over the week, while underlying market leadership remained narrow, particularly in technology-heavy segments. Attention remained focused on inflation dynamics, central-bank credibility and geopolitical risk, with commodities and safe-haven assets reflecting heightened uncertainty. As the new year progresses, upcoming inflation data and business surveys will be key in shaping expectations for monetary policy paths across major economies.

Market Recap.

In the UK, the FTSE 100 ETF advanced 1.05% over the week, supported by continued resilience in large-cap defensive stocks. US equity markets also ended the period higher overall, although gains were more modest than in the UK. The Dow Jones Industrial Average ETF rose 0.82%, while the S&P 500 ETF increased 0.46%. Performance remained mixed beneath the surface, however, with technology and growth stocks under pressure, leaving the Nasdaq 100 ETF down 0.13% over the week.

News.

UK energy suppliers came under scrutiny this week after an annual Which? ranking highlighted significant differences in customer service standards across the sector. Scottish Power, EDF and British Gas were ranked at the bottom of the table, with Scottish Power receiving the lowest overall score and particularly weak results for complaint handling. EDF was marked down for limited monitoring of customer contact channels, while British Gas struggled with complaint resolution and customer switching processes.

At the other end of the rankings, E (Gas and Electricity) topped the table, praised for customer service, ease of contact and clarity of information. Octopus Energy, Sainsbury’s Energy and 100Green were the only other providers to receive recommended status this year. The findings come as fixed energy tariffs are now widely available below the price cap, increasing the focus on value for money and service quality for consumers.

Inflation.

UK inflation dynamics remain closely tied to underlying economic momentum after data showed the economy grew 0.3% month-on-month in November, beating expectations of a 0.1% increase. The Office for National Statistics said growth was driven by a rebound in industrial production, particularly motor vehicle output, alongside firmer services activity ahead of the autumn Budget. While the improvement suggests modest momentum into the end of 2025, economists cautioned the strength likely reflects a rebound rather than a sustained acceleration. The firmer activity backdrop has nevertheless led some analysts to suggest the data raises the bar for an early interest-rate cut from the Bank of England, as resilience in growth could slow the pace of disinflation.

Central Banks.

European Central Bank Vice President Luis de Guindos said the ECB continues to place confidence in the US Federal Reserve despite recent political pressure, underlining the importance of central-bank independence. Speaking to Politico, de Guindos said, “We still trust the Fed,” adding that cooperation and credibility between major central banks remain essential for financial stability.

He stressed that maintaining policy independence is critical to anchoring inflation expectations, noting that markets must be confident decisions are driven by data rather than politics. The comments come as the ECB maintains a cautious, data-dependent stance, with policymakers focused on ensuring inflation returns sustainably to target before easing policy further.

Commodities.

Commodities recorded a divergent performance over the most recent period, reflecting elevated safe-haven demand alongside persistent energy market pressures. Precious metals continued to strengthen amid geopolitical risk and defensive positioning, with gold trading near ~US$4,666 per ounce and silver around ~US$93 per ounce as safe-haven demand increased on market uncertainty.

In contrast, energy markets have shown more constrained momentum, with Brent crude prices around US$64 per barrel and WTI near US$59 per barrel on January 16–18, suggesting that concerns over robust supply and weak demand dynamics continue to temper gains.

Overall, precious metals outperformed amid rising uncertainty, while crude prices remained capped by ongoing supply considerations and broad demand uncertainty.

ESG.

European markets saw regulatory focus on sustainable investment practices this week as the European Securities and Markets Authority (ESMA) called on asset managers to be clearer about how they integrate environmental, social and governance (ESG) factors into their investment processes. ESMA urged firms to provide more detailed disclosures on both their ESG integration approaches and any exclusions applied, highlighting the importance of transparency for investors. The authority also reiterated that labels such as “ESG” or “sustainable” should be backed by consistent and well-explained methodologies. This regulatory emphasis reflects ongoing efforts in Europe to strengthen investor confidence in ESG products and ensure comparability across strategies.

Geopolitics.

Geopolitical and trade tensions remained in focus this week after the International Monetary Fund highlighted tariffs and political uncertainty as factors that could weigh on global markets and growth. The IMF noted that renewed trade measures, including tariff proposals involving major economies, risk adding to uncertainty for businesses and investors. However, the fund said global growth remains relatively resilient, supported by strong investment in technology and services, and maintained its forecast for world economic growth of around 3.3% in 2026. Overall, the IMF characterised geopolitical risks as a potential headwind rather than a central case, with underlying global growth momentum still intact.

Week Ahead.

United States: In the United States, markets are closed on Monday, 19 January in observance of Martin Luther King Jr. Day. Economic releases pick up later in the week, with Thursday, 22 January seeing the release of the Personal Consumption Expenditures (PCE) Price Index and Core PCE data, a key gauge of inflation that the Federal Reserve monitors closely. On Friday, 23 January, flash PMI data for manufacturing and services are scheduled from S&P Global, offering timely insight into business conditions and economic momentum. These releases will help shape expectations for the Federal Reserve’s policy path in 2026.

Eurozone: Across the Eurozone, economic releases are relatively light, but flash PMI data for manufacturing and services will be published on Friday, 23 January, giving early sentiment indicators for January business conditions across the bloc. With limited headline macro data scheduled, markets will also pay attention to ECB communication and broader global developments for sentiment cues.

United Kingdom: In the UK, the week’s key scheduled releases include UK Consumer Price Index (CPI) for December 2025 on Wednesday, 21 January, providing the most recent inflation update ahead of BoE policy discussions. Labour market statistics, including earnings and employment details, are also expected early in the week, offering insight into wage trends and labour market conditions. Additionally, flash PMI data for January will be released on Friday, 23 January to gauge business activity momentum.