When Do You Start to Worry About Chinese Stimulus?

The Chinese are serious about bolstering their economy and they look like they are getting to a place where they are ready to do whatever it takes to reverse the slowing trend.

Crypto Market Takes a Breath after the Storm

The crypto market saw lower volatility in the last 24 hours, with capitalisation at $1.56 trillion and the price of Bitcoin hovering around $40K. Major altcoins have also avoided strong moves. The Fear and Greed Index is wandering around a neutral 50.

Sunset Market Commentary

The ECB policy decision was no surprise with steady rates and no tweaks to the statement or official guidance whatsoever. Its (December) medium-term inflation outlook has been broadly confirmed by incoming data. The central bank can stay put for the time being with “rates at levels that, maintained for a sufficiently long duration, will make a substantial contribution to this [reaching the 2%] goal.”

US: Economic Resilience Remains on Full Display in Q4 GDP Data 

Wow! Economic growth ends 2023 with a bang, smashing expectations and stringing together two of the strongest back-to-back quarters in two-years. The details of the report were very supportive of the ongoing resilience, with domestic demand accounting for most of last quarter's gain.

ECB Review: Didn't Rock the Boat, But Sailing Towards a Rate Cut

As widely expected, the ECB left its three policy rates unchanged at today's meeting, leaving its key policy rate (deposit rate) at 4%. Today's meeting was expected to be a stocktaking meeting with no new policy signals and the ECB delivered just that. The ECB confirmed that the incoming information was broadly in line with the staff projections laid out at the December meeting. We view today's assessment from the ECB as necessary but not sufficient for a rate cut.

GBP/USD Eyes UK Retail Sales

What goes up must come down. That has the markets fretting ahead of the UK retail sales report on Friday. Retail sales growth was brisk in November, with an impressive gain of 1.3% m/m. This followed zero growth in October and marked the strongest gain since April 2022.

Sunset Market Commentary

Markets received another dose of realism in the form of solid US economic data. US December housing data came in on the strong side of expectations. Building permits, seen as a leading indicator for the sector, rose by 1.9% m/m (1495k) vs 0.7% expected. Shovel-in-the-ground housing starts, the next step in the process, declined far less than expected (-4.3%) after a bumper November month, even with the downward revision (10.8%).

A Decent Rebound But More Data Needed to Justify Market Optimism

Stock markets are modestly higher on Thursday, recovering some of Wednesday's losses as investors seemingly struggle to determine where things stand.

The Beats of Their Own Drums

Australia has been later to the inflation surge and disinflation than peer economies. So the RBA will be later than its peers to cut rates, too. Central banks can move policy according to domestic needs rather than be led by the Fed. Exchange rates are likely to respond.

UK Retail Sales Plunge in December

UK Retail Sales fell sharply in December as consumers tightened their pursestrings during what is normally a hugely important time of year for retailers.