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Global Market – Key events this week – 14 to 19 January 2024

Global Market – Key events this week – 14th to 19th January 2024

This week we will cover we will cover how China’s stock sell-off and oil squeeze at start of 2023 is seen at surplus.  Red sea crisis event could impact food supply and impact inflation.  U.S. economic data released this week came above market estimate as jobless claim declined.  How key risk indicator reacted this week.

China’s $6.3 Trillion Stock Selloff Is Getting Uglier by The Day

Chinese stocks just capped another dismal week, with a gauge of mainland firms listed in Hong Kong languishing at the bottom of global equity index rankings for the year so far.

Oil Squeeze Of 2023 Turns to Surplus In Warning For Market Bulls

A year ago, crude traders and forecasters anticipated that the fourth quarter would be the strongest point of 2023, with China’s post-pandemic demand recovery pushing prices up to $100 a barrel. More recently, the Organization of Petroleum Exporting Countries has been predicting a record deficit of 3 million barrels a day.

Red Sea Unrest Is Bad News for The World’s Fragile Food Supply

Chaos in the Red Sea is starting to disrupt shipments of produce from coffee to fruit — and threatening to halt a slowdown in food inflation that brought some relief to strained consumers.

U.S. Jobless Claims Plunge To 187,000, Lowest Since September 2022

Initial claims decreased by 16,000 to 187,000 in the week ending Jan. 13, according to Labor Department data released on Thursday. The figure was below all estimates in a Bloomberg survey of economists.

ECB To Pick Right Moment for First Rate Cut, Economists Say

Almost three-quarters of respondents in a Bloomberg survey are confident policymakers will neither wait too long nor act too early — after they were widely accused of tardiness in responding to the continent’s once-in-a-generation price shock.

US 10-year bond yield @ 4.16% & Dollar Index @ 103.10

Key risk indicator in last week has seen risk-off sentiment as US 10-year bond yield rises from 3.94% a week earlier to 4.16% this week, rise of more than 20-bps.  Dollar Index is currently trading above 103 level was trading around 102 level.

Equichain Wealth Advisors: Market View & Opinion

Global cues were positive till last week on December 2023 on optimism of interest to cool-off sooner than expected but global cues in first three weeks of January 2024 does not provide any support to this trend.

We see next two week will be important and as BOJ meeting outcome on 23-Jan-24, ECB meeting outcome on 25-Jan-24, US Fed meeting outcome on 31-Jan-24 & BOE meeting outcome on 1-Feb-24.  Commentary of all these central banks could provide further cues.

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Global Market – Key events this week 14 to 19 Jan 2024.pdf
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Global Market – Key event for 8 to 12 Jan 2024

Global Market – Key events this week – 8th to 12th January 2024

This week we will cover various events this week and but these events does not have any major impact
on global cues.  China continues to their longest streak of deflation since 2009, threatening a deflationary spiral that may require more government support to reverse.

Brent Oil Hits $80 After Airstrikes Target Yemen’s Houthis

President Joe Biden said strikes had been conducted against a number of targets used by the Iran-backed group, with US officials saying radar sites and missile launchers were hit. A tanker industry group said military forces in the region were advising ships to avoid a key chokepoint near Yemen.

China’s Worst Deflation Streak in 14 Years Puts Pressure on PBOC

China’s consumer prices marked their longest streak of declines since 2009, threatening a deflationary spiral that may require more government support to reverse. Its export growth engine is also faltering.

Bitcoin ETF Trades Top $4.6 Billion in ‘Ground-Breaking’ Day

Over $4.6 billion worth of shares traded between the almost a dozen US spot Bitcoin exchange-traded funds on Thursday. The Grayscale Bitcoin Trust, which converted into an ETF, saw about $2.3 billion in volume, according to data compiled by Bloomberg. Meantime, BlackRock’s iShares Bitcoin Trust—IBIT— saw over $1 billion change hands.

U.S. Mortgage Rates Climb for Second Straight Week, Hitting 6.66%

Borrowing costs have risen slightly as traders grapple with questions around the Federal Reserve’s future path. US inflation accelerated in December, tempering expectations about possible rate cuts from the central bank.

Iran Captures Oil Tanker Off Oman in Deepening Mideast Turmoil

A tanker previously seized by the US for carrying illicit Iranian oil was captured by Tehran off the coast of Oman, heightening tensions in the world’s most important trade lane for global crude supply.

Equichain Wealth Advisors: Market View & Opinion

Market news and events this week does not have any major impact on equity while crude oil has seen spike on Friday as Brent crude oil approaches $80.  China’s is facing deflation and China’s CPI continues to mark longest streak of deflation since 2009.  Rising geo-political tension in Red-sea remain uncertainty in global market.

With recent development and geo-political event unfolding we will remain watchful and these events could trigger risk-off sentiment and provide much needed correction in global market.   Global market continues to trade near its recent high and remain venerable to any potential negative triggers.

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Global Market – Key events this week 8 to 12 Jan 2024.pdf
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Global Market – In focus – U.S. Economic & Geo-political tension

Global Market – In focus – U.S. Economic data & Geo-political tension

This week will on U.S. economic data and geopolitical tension as corporate earnings will start from next week.  So next week we will review corporate earnings of global companies and its impact on global as well as Indian market.

Now let us focus on the data released this week.  Most of the jobs data indicate strong economy, JOLTS Jobs opening came in-line with estimate while average hourly earnings were up by 0.40% Vs estimate of 0.30%.  Non-farm employment change came at 216k Vs estimate of 168k.

Market trend remains unclear as rally seen in December 2023 was on narrative of interest rate could starting declining earlier then estimate.  Strong economic data would mean the rate could stay at higher level for some more time.  US FOMC meeting minutes released this week also failed to provide clear trend and incoming data would be important to watch out for.

Geo-political tension – Red Sea Crisis

Freight costs, including surcharges, have increased by over 500% amid the Red Sea crisis as shipping companies were forced to take the longer route via Cape of Good Hope, according to the Federation of Indian Export Organizations.

Equichain Wealth Advisors: Market View & Opinion

US Market in December 2023 rallied from 3.81% to 4.94% on major indices will now need positive trigger from corporate earnings.

We would focus on corporate earnings where major US Banks are due to announce their earnings next week.  As we have seen economic data is U.S. continues to be strong will result in positive surprise in corporate earnings.

 
Click on the attachment to read the full report:
Global Market – In focus – U.S. Economic data & Geo-political tension.pdf
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