📆 Friday, January 24
► European stocks continued their record-breaking rally as Trump’s softened stance on China tariffs and better-than-expected Eurozone PMI data fueled optimism. The Stoxx 600 (+0.3%) climbed for an eighth consecutive session, led by gains in luxury stocks, healthcare, and financials. Burberry (+13%) jumped after reporting better-than-expected sales, while Ericsson (-10%) plummeted on weak earnings. The DAX (+0.3%) and CAC 40 (+0.8%; outperforming due to luxury gains) all advanced, while UK’s FTSE 100 (-0.35%) underperformed amid disappointing retail data. Economic sentiment in Europe improved, with the Eurozone Composite PMI rising to 50.2, its highest in seven months, signaling a potential rebound in business activity. However, investors remain cautious as Trump’s trade policies remain unpredictable, with Canada and Mexico still facing potential tariffs.
► Wall Street maintained its bullish momentum, with the S&P 500 reaching another all-time high, as Trump downplayed immediate tariff risks on China. The Nasdaq 100 and S&P 500 futures are currently trading flat after closing higher, driven by the recent strong earnings from Netflix and optimism surrounding AI investments. Emerging-market currencies had their best week since July 2023, as the USD fell to a one-month low this week, boosting risk appetite. The 10-year Treasury yield is flat at 4.64%. Investors remain confident in a hawkish rate path from the Federal Reserve and still expect a rate cut in H1.
► Asian markets were mixed, reacting to Trump’s evolving trade policies, China’s economic support measures, and the Bank of Japan’s rate hike. The Nikkei 225 (-0.1%) struggled after the BOJ raised interest rates by 25 basis points to 0.5%, its highest level since 2008. The Japanese JPY strengthened past 155/USD, as BOJ Governor Ueda hinted at further tightening if inflation remains elevated. In China, stocks rebounded after Beijing announced new equity support measures, leading to a 0.77% gain in the CSI 300 and a 1.15% rise in the Shenzhen Component.
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