📆 Friday, January 17
► European markets surged, with Euro Stoxx 600 futures gaining over 0.7%. UK retail sales fell 0.3% MoM in December, missing expectations (+0.4%), raising concerns about slowing consumer demand, which could signal more easing this year than markets currently expect. The FTSE 100 hit a new ATH benefiting from the weaker GBP, rate cut hopes and strong gains in the mining sector after Bloomberg News reported that Glencore and Rio Tinto held early-stage talks to merge. Eurozone inflation data confirmed preliminary data and came in at 2.4% YoY (2.7% core inflation) in-line with expectations. Despite inflation remaining slightly elevated, swap markets continue to expect the ECB to remain on it's monetary easing path.
► US stock futures edged higher with S&P 500 and Nasdaq 100 futures up 0.2% – 0.3% boosted by a strong start into the Q4/24 earnings season. US Retail sales rose 0.4% MoM, slightly below forecasts (+0.6%), suggesting moderating consumer demand. The USD stabilized, rebounding from its first weekly decline since November, as traders reassessed Fed rate-cut expectations. Treasury yields steadied (currently 1 basis point lower for today), with the 10-year holding near 4.6%, following dovish comments from Fed Governor Christopher Waller, who stated that three to four rate cuts could still be on the table for 2025. Investors' attention shifts to next week’s Q4 earnings reports from Netflix, Meta, and Microsoft, as well as the Federal Reserve’s next policy meeting.
► Asian markets were mixed, snapping a three-day winning streak, as investors digested China’s better-than-expected GDP data but remained wary of US tariff risks. Japan’s Nikkei 225 (-0.41%) hit a one-month low, pressured by BOJ rate-hike speculation, as swaps now show a 99% probability of a move at next week’s meeting. The JPY strengthened past ¥155/USD, marking a 1% weekly gain, further weighing on Japanese exporters. China’s Q4 GDP grew 1.6% QoQ (above 1.3% expected), bringing full-year GDP growth to 5.4% YoY, surpassing Beijing’s 5.0% target. However, concerns remain over US tariffs potentially curbing export growth in 2025. Shanghai Composite (+0.22%) and Hong Kong’s Hang Seng (+0.19%) posted modest gains, supported by optimism over continued stimulus measures. Taiwan Semiconductor (TSM) shares climbed after strong revenue and capital expenditure forecasts, while Nintendo slumped, as investors were unimpressed by early glimpses of its next-generation Switch 2 console.
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