Economic Indicators & Central Banks:
- Treasuries bounced back after the worst 2-day stretch since June 2022. Dip buying supported along with a solid 3-year note auction & comments from the more hawkish Fed President Mester who could see rate cuts later in the year.
- China’s bourses initially rallied on stimulus hopes, but the pledge to do more and the attempt to fix the situation with a series of smaller changes hasn’t instilled lasting confidence. Stimulus hopes are priced in already and gains could fade, if there is no more decisive follow up.
- This year’s near -9% plunge in the Shanghai Composite index to the lowest since 2019, and the better than –10% drop in the Hang Seng, have rattled the officials significantly, especially as the various measures to date, including curbs on short selling, along with rate cuts and liquidity injections by the PBoC have failed to provide much umph.
- German industrial production corrected -1.6% m/m in December. A worse than expected result.
Market Trends:
- The CSI 300 is still up 0.96%, but the Hang Seng is now down -0.2% on the day.
- The Dow advanced 0.37%, with the S&P 500 0.23% higher, and the NASDAQ up 0.07%.
- European and US futures are flat!
Financial Markets Performance:
- The USDIndex was firmer but off its best levels as the gain to a 104.604 intraday high elicited some profit taking as the markets weigh central bank policies.
- The NZDUSD spiked to 0.6113, as government bond yields rose after the strong New Zealand jobs report, which indicated that the RBNZ could remain cautious about cutting interest rates. The Aussie Dollar strengthened as well.
- USOIL prices are firmer at $73.42 per barrel. Gold is 0.53% higher at $2035.66 per ounce.
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Andria Pichidi
Market Analyst
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