Economic Indicators & Central Banks:
- Asian stock markets were mixed with mainland Chinese stocks swinging between gains and losses on the eve of the Lunar New Year holidays, while Treasuries stabilized.
- China CPI tumbled to an -0.8% y/y pace in January, steeper than forecast, after falling at a -0.3% y/y clip in December. It is the fastest pace of decline since September 2009 and a fourth straight month in deflation.
- Japanese bourses outperformed,after BoJ’s Uchida said it is hard to see a rapid lift-off in rates.
- Treasuries bounced back after the worst 2-day stretch since June 2022.
- Dovish Fed’s Kashkari currently sees two to three rate cuts would be appropriate this year, as things stand.
Market Trends:
- The Nikkei rallied 2.1%, mainland China bourses and the Hang Seng corrected again.
- European and US futures are higher despite a slight rise in yields.
- The S&P 500 hit a new high at the close, breaking the 5,000 level , driven by confidence in the economy despite worries like Fed policy changes and market conditions. The market remains strong with good momentum, even in a slower season.
- Ford Motor, Chipotle Mexican Grill and other big stocks climbed following their latest earnings reports.
Financial Markets Performance:
- The USDIndex is at 104.03, in a tight range as markets digest mixed Fed speeches and ahead of more economic data.
- The USDJPY depreciated against the US Dollar, reaching 148.80, following comments from BoJ Deputy Governor Shinichi Uchida indicating that the central bank is unlikely to pursue aggressive interest rate hikes, even as it moves away from negative interest rates.
- USOIL rose for the 3rd day in a row, above $74, driven by gains in financial markets and ongoing tensions in the Middle East. The rise in global stocks is boosting demand for oil, despite the Federal Reserve’s dismissal of immediate interest rate cuts.
- Gold steady at $2030-2038.
- Bitcoin rose 0.85% to $44,564.62.
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Andria Pichidi
Market Analyst
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