Trump has stepped back from plans to use force to seize Greenland, delivering a rare moment of de-escalation that markets were quick to price in. U.S. equities rallied on the shift, with major indexes closing up an average of 1.5%. Futures are extending the move, up another 1% this morning.
The signal carried through currencies and hedges. The dollar softened modestly against its main peers, while gold paused after recent gains, holding broadly flat around $4,825. With tensions easing, investors see little urgency to rebuild defensive positions.
Equity markets followed, though not in lockstep. European stocks are up around 1.5% today, Japan gained close to 1%, and China is edging higher only marginally. Relief is present, but conviction remains uneven.
In Davos, attention shifted from headlines to positioning. Chinese Vice Premier He Lifeng said China is ready to be the world’s market — a statement aimed less at reassurance and more at re-anchoring global demand. It reinforces a broader trend already underway: the center of economic gravity continues to move east, quietly and with growing consequence.