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Review 15Jan - 19Jan24: WEF Resists Rate Cut Expectations: Nikkei, US Tech Stocks, Yields, and USD Rise in Unison

Last week, the performance of various risk assets was mixed. The S&P 500 reached a new record high, fueled by gains in the technology, communication, and financial sectors. However, US small caps, represented by the Russell 2000, and European stocks generally experienced declines. The Nikkei Index in Japan rose, approaching its 34-year high, while equities in China and Hong Kong faced selling pressure despite positive growth data for 2023 from China. Bitcoin was the most significant loser, as it fell below the support level of $44,500. Yield curves and the US dollar both moved upward, driven by robust data and a collective resistance to rate cut expectations at the Davos meeting. Key data releases of last week:

  • Germany's economy shrank in 2024 (read more here)

  • Euro Area's Trade Balance Improves Further (read more here)

  • Economic Sentiment continues to improve in latest ZEW survey (read more here)

  • China's 2023 Economic Growth Surpassed Official Target (read more here)

  • UK Inflation Surprises Higher in December (read more here)

  • Resilient US Consumer Spending Defies Slowdown Fears (read more here)

  • Philly Fed Manufacturing Index Improves but Disappoints Expectations (read more here)

  • UK Retail Sales Collapse in December (read more here)

  • Japan's Inflation Eases, but BoJ Policy Shift Remains on a Knife-Edge (read more here)

  • US Consumer Sentiment Hits 2021 High, Optimism Spikes Amid Easing Inflation Expectations (read more here)

  • CFTC Leveraged Money Positioning Update for the Week to Jan16 (read more here)


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