Global Economy Briefing: January 30, 2026 Morning

(MENAFN- The Rio Times) Key Points

• Europe grew a bit faster than expected in Q4, with unemployment down, while Spain's inflation cooled and output stayed strong.
  
• The U.S. showed hotter producer inflation and a much wider trade deficit, but factory sentiment jumped sharply.
  
• Latin America delivered mixed signals: Mexico rebounded in Q4, Brazil's job market broke sharply, and Colombia tightened policy again.
  

United States
The big swing was inflation in the pipeline. Core PPI jumped 0.7% m/m and 3.3% y/y. Headline PPI rose 0.5% m/m and held 3.0% y/y. That complicates the“easy disinflation” story, even if it proves temporary.

The trade deficit widened to $56.8B as exports fell to $292.1B and imports rose to $348.9B. Claims were still low: initial 209K and continuing 1.827M. Factory momentum improved hard: Chicago PMI jumped to 54.0 from the low 40s.

Factory orders rose 2.7% m/m, with ex-transport at 0.2%, and wholesale sales rose 1.3% m/m with inventories up 0.2%. Natural gas storage drew 242B, a winter squeeze signal.

Funding stayed steady (4-week 3.630%, 8-week 3.635%, 7-year 4.018%). GDPNow dropped to 4.2% from 5.4%. Net: activity looks better, but the inflation impulse and trade gap are uncomfortable.
Europe and UK
Eurozone Q4 GDP rose 0.3% q/q and 1.3% y/y, slightly better than expected, and unemployment fell to 6.2%.

Confidence improved: the Business and Consumer Survey rose to 99.4, business climate improved to −0.41, services sentiment rose to 7.2, and industrial sentiment improved to −6.8. Inflation expectations eased to 24.1 and selling-price expectations fell to 10.0.



Credit was steady: M3 growth 2.8% y/y, with private loans and corporate loans both at 3.0% y/y. Italy's non-EU trade surplus widened to €8.39B and BTP yields held (10-year 3.44%, 5-year 2.74%).

France jobseekers fell to 3,117.4K. Spain's retail slowed to 2.9% y/y, but business confidence improved to −3.0. Spain's current account fell to €0.21B after a prior surge.

Germany's January CPI firmed to 2.1% y/y, while HICP also printed 2.1% y/y. Net: Europe is stabilizing, but it is not accelerating fast.
Canada
Growth was flat in November (0.0% m/m) and up slightly in the December flash (0.1% m/m). The fiscal balance worsened to −$8.02B in November. Earnings were 2.45% y/y. Trade widened to a −$2.20B deficit as exports fell and imports held.
Asia-Pacific
Japan cooled on inflation and demand. CPI fell to 1.4% y/y, Tokyo core to 2.0% y/y, and retail sales fell 0.9% y/y.

Industrial production fell only 0.1% m/m, and the one-month-ahead forecast jumped to 9.3%, but the two-month-ahead forecast was negative. Household confidence improved to 37.9.

Foreign flows were positive but smaller than the prior day. India's buffers strengthened: FX reserves rose to $709.41B, but money growth slowed (loans 13.1%, deposits 10.6%).

Korea improved: output rose 1.7% m/m and retail rose 0.9% m/m, with services up 1.1% m/m.
Latin America and Africa
Mexico's Q4 GDP rebounded: 0.8% q/q and 1.6% y/y after contraction. The fiscal deficit widened sharply to −MXN 414.44B in December, a clear warning for 2026 financing. Brazil's labor market was the shock.

CAGED showed −618.16K jobs in December after +85.86K, even as unemployment stayed low at 5.1%. Inflation pressures picked up: IGP-M rose 0.41% m/m and bank lending rose 1.8% m/m.

The fiscal mix improved on one line item (a small surplus) but the nominal deficit remained large (−R$115.5B) with net debt at 65.3% and gross debt 78.7%.

Chile's unemployment fell to 8.0% and copper output declined 4.7% y/y, while retail stayed strong at 4.5% y/y.

South Africa held rates at 6.75%; its trade surplus was R23.18B. Colombia raised rates to 10.25% from 9.25%, a clear pivot toward tighter policy as inflation and currency risk stay sensitive.
Positioning and risk
CFTC showed higher crude length (97.0K) and lower gold length (205.4K). EUR net length increased to 132.1K and CAD shorts shrank. Risk positioning is still mixed, not one-way.
What it means
This was a“growth steadier, inflation not dead” session. Europe's improving confidence and lower unemployment help the soft-landing story. U.S. PPI and a wider trade deficit keep the Fed cautious. Japan's cooling supports global disinflation.

Latin America is split: Mexico is growing again, Brazil is volatile on jobs and credit, and Colombia is tightening.

Tilt: keep quality duration, but respect inflation surprises; favor Europe where credit is steady and confidence is improving; in LATAM, prefer Mexico over Brazil until Brazil's labor and flows normalize.

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