Errante’s The Week Ahead: 12^th – 16^th January 2026 

Highlights of the Week 

• US inflation data and bond auctions set the tone for rates repricing and near-term USD direction. 

• Equity and FX markets transition from range-bound behaviour toward macro-validated moves as liquidity normalizes. 

• EUR and GBP remain reactive assets, with domestic data unlikely to offset US real-rate dominance. 

Errante’s The Week Ahead: 12^th – 16^th January 2026 

The first full macro-heavy week of January marks a shift from liquidity-driven price action to data-confirmed positioning. Markets enter the week with US real rates still acting as the primary anchor across FX, while implied volatility remains low enough to amplify any surprise in inflation, consumption, or rates supply. 

The focal point is US inflation. Consensus expects December CPI to remain firm, with core CPI at 0.2 percent month-on-month and headline CPI at 2.7 percent year-on-year. This profile reinforces the prevailing “disinflation without relief” regime. Inflation is cooling but not fast enough to loosen financial conditions meaningfully. If CPI prints in line or firmer, front-end yields are likely to remain supported, reinforcing dollar stability rather than reigniting a broader downtrend. A downside surprise would be required to reopen aggressive easing expectations, and that is not the base case. 

Bond supply adds an important secondary layer. The 10-year and 30-year Treasury auctions arrive against a backdrop of heavy fiscal issuance and persistent term premium. Weak auction demand would push yields higher at the long end, tightening financial conditions and favoring USD support, particularly against low-yielding currencies. Strong demand would ease pressure temporarily but would not alter the broader higher-for-longer real-rate narrative unless paired with softer inflation. 

Midweek data concentrates on consumption and pricing power. Retail sales and core retail sales will test whether the US consumer is slowing meaningfully or merely rotating spending. Current forecasts suggest flat headline retail sales but firm core consumption. That combination would confirm a resilient but narrower growth profile, consistent with USD support and capped risk appetite. Producer prices near 0.3 percent month-on-month would reinforce the view that pipeline inflation remains sticky, limiting the Federal Reserve’s room to accelerate easing. 

Labor data plays a confirming role rather than a catalytic one this week. Initial jobless claims near 208 thousand would be consistent with a cooling but not deteriorating labor market. Without a clear labor shock, rates markets are unlikely to reprice aggressively. 

Outside the US, data carries limited directional power. UK monthly GDP is expected to remain soft, reinforcing sterling’s sensitivity to external drivers rather than domestic momentum. German CPI is forecast at flat month-on-month, confirming easing inflation but offering little reason for the euro to outperform while US real yields remain elevated. 

In summary, this is a week where inflation credibility, rates supply, and consumption resilience matter more than growth headlines. As long as inflation remains sticky and auctions are absorbed without stress, the dollar retains relative support, EURUSD remains range-bound with downside risk, and volatility stays suppressed but fragile. 

Market Events and Announcements (GMT+2) 

Monday, 12^th January 2026 

• 20:00 – United States – 10-Year Treasury Note Auction 

Tuesday, 13^th January 2026 

• 15:30 – USD – Core CPI month-on-month 

• 15:30 – USD – CPI month-on-month 

• 15:30 – USD – CPI year-on-year 

• 17:00 – USD – New Home Sales 

• 20:00 – USD – 30-Year Treasury Bond Auction 

Wednesday, 14^th January 2026 

• 15:30 – USD – Core Retail Sales month-on-month 

• 15:30 – USD – Retail Sales month-on-month 

• 15:30 – USD – Producer Price Index month-on-month 

• 17:00 – USD – Existing Home Sales 

• 17:30 – USD – Crude Oil Inventories 

Thursday, 15^th January 2026 

• 09:00 – UK – GDP month-on-month 

• 15:30 – USD – Initial Jobless Claims 

• 15:30 – USD – Philadelphia Fed Manufacturing Index 

• 15:45 – USD – S and P Global Manufacturing PMI 

Friday, 16^th January 2026 

• 09:00 – EUR – German CPI month-on-month 

Market Insights: Key Charts to Watch 

US Dollar Index (DXY) – Daily Chart 

Current Market Trend 

DXY remains in a broad consolidation following its 2025 decline, with price stabilizing above the late-December lows. Momentum indicators show gradual recovery rather than impulsive strength, suggesting accumulation rather than trend reversal. The index is trading near its medium-term mean, indicating balance between yield support and longer-term USD skepticism. 

Main Scenario 

As long as DXY holds above its primary demand zone, the base case is for continued consolidation with a mild upside bias. Firm US inflation and stable auction demand would support a grind higher toward upper range resistance, consistent with relative yield support rather than renewed dollar exceptionalism. 

Supports 

• 98.40 to 98.60 as the primary support and range mean 

• 97.70 as the structural base of the December accumulation zone 

Resistances 

• 99.10 as near-term resistance where rallies have stalled 

• 99.80 to 100.30 as a major supply zone tied to prior swing highs 

Alternative Scenario 

A clear downside inflation surprise or exceptionally strong bond auction demand could push DXY below 98.40, exposing 97.70 and reopening the broader bearish trend from 2025. 

EURUSD – Daily Chart 

Current Market Trend 

EURUSD remains locked in a wide consolidation after its strong 2025 advance. Price action shows lower highs into resistance and higher lows from trendline support, reflecting compression rather than directional conviction. Momentum has cooled, but there is no evidence of trend exhaustion. 

Main Scenario 

As long as EURUSD holds above its rising structural support, pullbacks remain corrective. However, without a US data-driven catalyst, upside progress is likely to stall near range resistance. The pair remains sensitive to US real-rate moves rather than eurozone fundamentals. 

Supports 

• 1.1550 to 1.1580 as the primary support zone aligned with trendline demand 

• 1.1420 to 1.1450 as the deeper range floor and structural support 

Resistances 

• 1.1680 to 1.1720 as the first resistance band 

• 1.1800 to 1.1830 as the upper boundary where a sustained break would signal range exit 

Alternative Scenario 

A decisive break below 1.1490 would invalidate the consolidation structure and re-align EURUSD with renewed USD strength, opening scope toward the lower 1.14 area. 

Errante’s Weekly Newsletter brings you critical market insights to keep you ahead in the financial world. Stay informed and make strategic decisions with Errante. 

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