Photo by Timothy Newman on Unsplash
 

At the close of the stock market yesterday, the Dow Jones Index (US30) was up by 0.04%, while the S&P 500 Index (US500) was down by 0.07% on Thursday. The Nasdaq Technology Index (US100) closed around its opening price.

The US Consumer Price Index for December rose to 3.4% y/y from 3.1% y/y in November, beating expectations of 3.2% y/y. The core CPI for December declined to 3.9% y/y from 4.0% y/y in November, the lowest reading in 2 years, but above expectations of 3.8% y/y. US weekly initial jobless claims unexpectedly fell by 1,000 to a 2.5-month low of 202,000, indicating a stronger labor market than expectations of a rise to 210,000. Markets are discounting the odds of a 25 bps rate cut to 3% at the next FOMC meeting on January 30-31 and 70% for the same 25 bps rate cut at the March 19-20 meeting.

Today is the start of the Q4 2023 reporting season in the US. The banking sector will start reporting traditionally.

Equity markets in Europe were mostly declining yesterday. Germany's DAX (DE40) fell by 0.86%, France's CAC 40 (FR40) lost 0.52% on Thursday, Spain's IBEX 35 (ES35) was down by 0.62%, and the UK's FTSE 100 (UK100) closed negative by 0.98%.

ECB Governing Council representative Vujcic said yesterday that December Eurozone inflation was within expectations, and he favors a quarter-point cut in interest rates.

The UK economy grew slightly stronger than expected in November. UK Gross Domestic Product rose by 0.3% in November after falling 0.3% a month earlier. However, weakness in previous months leaves a high risk of sliding into recession, which could be a blow for Prime Minister Rishi Sunak ahead of elections expected in 2024.

Heightened geopolitical risks in the Middle East sent crude oil (WTI) prices up more than 3% after Iran seized an oil tanker off the coast of Oman. The increase in hostile incidents in the Red Sea against commercial shipping is a favorable factor for oil prices. Today, the United States and Britain launched air and sea strikes against Houthi military installations in Yemen in response to the movement's attacks on ships in the Red Sea.

Natural gas (XNG) prices rose moderately on Thursday after weekly natural gas inventories fell more than expected, according to the EIA. EIA said natural gas inventories fell by 140 billion cubic feet last week, more than the 121 billion cubic feet expected

Asian markets were mostly up yesterday. Japan's Nikkei 225 (JP225) gained 1.77% for the day, China's FTSE China A50 (CHA50) rose by 0.27%, Hong Kong's Hang Seng (HK50) ended the day up by 1.27%, and Australia's ASX 200 (AU200) ended the trading day positive by 0.80%. Japan's Nikkei index extended its impressive gains this year, jumping 1.5% to another 34-year high on Friday.

China's inflation data showed that the country's economic recovery remained weak in December, with the consumer price index falling by 0.3% y/y. However, separate trade data showed exports grew faster than expected last month, and imports returned to growth.

• S&P 500 (US500) 4,780.24 −3.21 (−0.07%)
• Dow Jones (US30) 37,711.02 +15.29 (+0.04%)
• DAX (DE40) 16,547.03 −142.78 (−0.86%)
• FTSE 100 (UK100) 7,576.59 −75.17 (−0.98%)
• USD Index 102.25 −0.04 (−0.04%)
   

News feed for 2024.01.12:

• – China Consumer Price Index (m/m) at 03:30 (GMT+2);
• – China Producer Price Index (m/m) at 03:30 (GMT+2);
• – China Trade Balance (m/m) at 05:00 (GMT+2);
• – UK GDP (m/m) at 09:00 (GMT+2);
• – UK Industrial Production (m/m) at 09:00 (GMT+2);
• – UK Manufacturing Production (m/m) at 09:00 (GMT+2);
• – UK Trade Balance (m/m) at 09:00 (GMT+2);
• – US Producer Price Index (m/m) at 15:30 (GMT+2).

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