Weekly Market Recap (15-19 January)

Taiwan’s Presidential
election was held over the weekend. William Lai, of the pro-sovereignty
Democratic Progressive Get together (DPP) has been elected President. The social gathering has
ruled Taiwan for the previous eight years. This will likely be
its third consecutive presidential time period.

  • Lai received 40% of the
  • Forward of the principle
    opposition Kuomintang (KMT) social gathering’s Hou Yu-ih (the KMT is friendlier with
    the mainland CCP) on 33%.
  • The third candidate
    Ko Wen-je, from the Taiwan Individuals’s Get together, scored simply over 1 / 4 of
    the vote.

Voters additionally selected
legislature candidates, Seats received:

  • Kuomintang (KMT) received 52.
  • Democratic
    Progressive Get together (DPP) received 51 seats, a internet lack of 11 seats, dropping
    from 62.
  • Taiwan Individuals’s
    Get together (TPP) received 8.
  • two impartial
    legislators received seats, each of whom are ideologically most aligned with
    the KMT.


  • The DPP has misplaced its
  • The opposition KMT
    gained floor.
  • No social gathering has sufficient
    seats to manage Parliament, this may require 57 seats.
  • Taiwan political
    pundits anticipate the most probably parliamentary end result is for the KMT and
    TPP to hammer out a deal to control.


The PBoC left the
MLF fee unchanged at 2.50% vs. 2.40% anticipated:

  • MLF 2.50%.
  • Injected money through
    MLF for the 14th month in a row.
  • Added internet CNY 216bn.


The Eurozone
November Industrial Manufacturing got here consistent with expectations:

  • Industrial
    Manufacturing M/M -0.3% vs. -0.3% anticipated and -0.7% prior.
  • Industrial
    Manufacturing Y/Y -6.8% vs. 6.6% prior.
  • Sturdy client items -2.0%.
  • Capital items -0.8%.
  • Intermediate items -0.6%.
  • Vitality 0.9%.
  • Non-durable client items 1.2%.

Eurozone Industrial Manufacturing YoY

ECB’s Holzmann
(hawk – non voter in January) pushed again aggressively on fee cuts

  • Shouldn’t depend on
    fee cuts in any respect this yr.
  • Fee lower
    expectations are optimistic.
  • Geopolitical developments
    pose a danger to costs outlook.
  • Doesn’t see an actual
    recession coming to the Eurozone.

ECB’s Holzmann

ECB’s Nagel (hawk
– voter) pushed again in opposition to fee cuts expectations:

  • It’s too early to
    discuss fee cuts.
  • Markets are
    typically overly optimistic.
  • We’re knowledge dependent.
  • Inflation continues to be
    too excessive.
  • Perhaps can wait till
    summer time break earlier than considering fee cuts.

ECB’s Nagel

The BoC Enterprise
Outlook Survey confirmed much more contraction in This fall 2023:

  • Sentiment fell each
    month in This fall, from 22% at the beginning of the quarter to 9% on the finish.
  • 38% of companies anticipate
    a recession within the yr forward vs. 33% in Q3.
  • 54% of companies anticipate
    inflation to stay above 3% for the subsequent two years vs. 53% in Q3.
  • 75% of companies suppose
    wage development will likely be again to regular by 2025.
  • Client survey
    inflation expectations for five years to 2.62% from 2.75%.
  • Future gross sales 20% vs. 14%.
  • Indicators of future
    gross sales vs. a yr in the past -10% vs. 0% prior.
  • Corporations see slight
    enchancment in labour availability.

BoC Enterprise Outlook Survey

The Japanese December
PPI beat expectations:

  • PPI M/M 0.3% vs. 0.0%
    anticipated and 0.2% prior.
  • PPI Y/Y 0.0% vs.
    -0.3% anticipated and 0.3% prior.

Japan PPI YoY

The UK December
Labour Market report confirmed job losses and decrease wage development:

  • December Payrolls
    change -24K vs. 9K prior (revised from -13K).
  • November ILO
    unemployment fee 4.2% vs. 4.2% anticipated and 4.2% prior.
  • November employment
    change 73k vs. 50k anticipated and 50K prior.
  • Common weekly
    earnings 6.5% vs. 6.8% anticipated and seven.2% prior.
  • Common weekly
    earnings (ex bonus) 6.6% vs. 6.6% anticipated and seven.2% prior (revised from

UK Unemployment Fee

The German January
ZEW index improved additional:

  • ZEW 15.2 vs. 12.0
    anticipated and 12.8 prior.
  • Present situations
    -77.3 vs. -77.0 anticipated and 77.1 prior.
  • Expectations 15.2 vs. 12.8 prior.

German ZEW

ECB’s Villeroy
(impartial – voter) pushed again in opposition to the aggressive fee cuts expectations:

  • Too early to declare victory over inflation.
  • Subsequent
    transfer will likely be a fee lower a while this yr.

ECB’s Villeroy

ECB’s Centeno
(dove – non voter in January) he sounded a bit extra impartial in comparison with his
earlier dovish feedback:

  • Should be ready
    for all subjects, together with fee cuts.
  • Latest knowledge have
    confirmed December projections.
  • However inflation was
    barely beneath forecast.
  • We must always keep away from
    undershooting on inflation.
  • Q1 GDP continues to be trying
  • Don’t see causes
    for concern about wages.
  • Inflation trajectory is sweet.

ECB’s Centeno

ECB’s Valimaki
(hawk – voter) pushed again in opposition to the aggressive fee cuts expectations:

  • Should not leap the
    gun on fee cuts.
  • Higher to attend a bit
    longer than lower charges prematurely.
  • Inflation is on the
    proper monitor, however the job will not be performed.
  • Restrictive financial
    coverage continues to be known as for.
  • Gentle touchdown for the
    financial system continues to be the baseline however dangers are tilted to the draw back.

ECB’s Valimaki

The US January
Empire State Manufacturing Index missed expectations by an enormous margin with the
lowest studying on document (excluding covid):

  • Empire State
    Manufacturing Index –43.7 vs. -5.0 anticipated and -14.5 prior.
  • New orders -49.4 vs.
    -11.3 final month.
  • Shipments -31.3 vs. -6.4 final month.
  • Costs paid 13.2 vs.
    16.7 final month.
  • Costs Acquired 9.5
    vs. 11.5 final month.
  • Employment -6.9 vs. -8.4 final month.
  • Common Worker
    workweek -6.1 vs. -2.4 final month.
  • Unfilled orders
    -24.2 vs. -24.0 final month.
  • Supply occasions -8.4
    vs. -15.6 final month.
  • Inventories -7.4 vs. -5.2 final month.

The 6-month ahead index:

  • Common enterprise
    situation 18.8 vs. 12.1 final month.
  • new orders 25.2 vs.
    11.3 final month.
  • shipments 24.6 vs. 15.8 final month.
  • costs paid 40.0 vs.
    25.0 final month.
  • costs obtained 32.6
    vs. 27.1 final month.
  • employment 16.8 vs. 10.9 final month.
  • common worker
    workweek 14.7 vs. 10.4 final month.
  • unfilled orders 16.8
    vs. 5.2 final month.
  • supply occasions 11.6 vs.
    -1.1 final month.
  • inventories 5.3 vs. 9.4 final month.
  • capital expenditures
    13.7 vs. 4.2 final month
  • know-how spending
    9.5 vs. 10.3 final month

US Empire State Manufacturing Index

The Canadian
December CPI report got here consistent with expectations though the underlying
inflation measures ticked greater:

  • CPI Y/Y 3.4% vs.
    3.4% anticipated and three.1% prior.
  • CPI M/M -0.3% vs.
    -0.3% anticipated and 0.1% prior.
  • Core CPI Y/Y 2.6% vs.
    2.8% prior.
  • Core CPI M/M -0.5% vs. 0.1% prior.
  • Trimmed Imply CPI Y/Y
    3.7% vs. 3.5% anticipated and three.5% prior.
  • Median CPI Y/Y 3.6%
    vs. 3.4% anticipated and three.6% prior (revised from 3.4%).
  • Widespread CPI Y/Y 3.9%
    vs. 3.9% prior.

Canada Inflation Measures

Fed’s Waller (impartial – voter) pushed again in opposition to the
aggressive fee cuts expectations though he did it in a balanced means maintaining
some optionality on the desk:

  • Information in the previous few
    months permitting Fed to think about chopping charges this yr.
  • Modifications in coverage
    path have to be ‘fastidiously calibrated’ and ‘not rushed’.
  • I’m extra assured
    that we’re inside hanging distance of attaining sustainable 2% inflation.
  • We’re shut however I
    will want extra information in coming months to make certain.
  • I view dangers to
    Fed’s mandates as extra carefully balanced.
  • Fed will have the ability to
    lower charges this yr so long as inflation does not rebound or keep excessive.
  • This view is
    per Fed projections for 3 25 bps cuts in 2024.
  • Timing and precise
    variety of cuts will rely upon knowledge.
  • Financial exercise has moderated.
  • Setting of coverage
    must proceed with extra warning to keep away from over-tightening.
  • Monetary situations stay restrictive.
  • Highlights indicators
    that the labour market continues to return into higher steadiness.
  • Information on job openings
    signifies ongoing moderation in labour demand.
  • It will likely be as much as
    committee on timing of when to start out cuts.
  • The financial system is doing
    and giving us the flexibleness to maneuver fastidiously and methodically.
  • We now have to see agency
    proof of enchancment on charges.
  • If we predict we’ve got
    to maneuver quicker on charges, we are able to however secret is that we’ve got flexibility.
  • We’re in an uncommon
    place the place we are able to transfer charges down with no shock to the financial system.
  • There are issues we
    need to watch out about.
  • Whether or not we miss the
    timing on fee cuts by six weeks, it exhausting to consider that is going to have
    an enormous impact on the financial system.
  • As soon as provide
    adjustment is full [from the pandemic], will probably be clearer whether or not
    demand is falling sufficient to complete the inflation struggle, it is a problem to
  • Approx endpoint for
    reserves is probably going round 10-11% of GDP … in a single day repo does not must
    have something in it.
  • 4% wage development is a
    ‘little excessive’ however not a lot.

Fed’s Waller

ECB’s Simkus (hawk- voter) pushed again in opposition to the
aggressive fee cuts expectations:

  • I’m far much less
    optimistic than markets on fee cuts.
  • Cuts might start
    across the summer time.
  • Wage knowledge goes
    to be essential.

ECB’s Simkus

ECB’s Muller (hawk- voter) pushed again in opposition to the
aggressive fee cuts expectations:

  • Market expectations
    for 2024 ECB fee cuts are aggressive.
  • Wage development will not be
    consistent with the inflation goal.

ECB’s Muller

The Chinese language This fall GDP missed expectations barely
though nonetheless above the 5% CCP goal:

  • This fall GDP Y/Y 5.2% vs.
    5.3% anticipated and 4.9% prior.
  • GDP Q/Q 1.0% vs.
    1.0% anticipated and 1.5% prior.

China GDP YoY

The Chinese language December Industrial Manufacturing beat

  • Industrial
    Manufacturing Y/Y 6.8% vs. 6.6% anticipated and 6.6% prior.

China Industrial Manufacturing YoY

The Chinese language December Retail Gross sales missed expectations:

  • Retail Gross sales Y/Y
    7.4% vs. 8.0% anticipated and 10.1% prior.

China Retail Gross sales YoY

The UK December CPI report beat expectations throughout
the board:

  • CPI Y/Y 4.0% vs. 3.8%
    anticipated and three.9% prior.
  • CPI M/M 0.4% vs.
    0.2% anticipated and -0.2% prior.
  • Core CPI Y/Y 5.1%
    vs. 4.9% anticipated and 5.1% prior.
  • Core CPI M/M 0.6%
    vs. 0.4% anticipated and -0.3% prior.


ECB’s Lagarde (impartial – voter) pushed again in opposition to
the aggressive fee cuts pricing:

  • Assured inflation
    will attain 2% goal.
  • Inflation will not be
    the place the ECB needs it.
  • However on the suitable
    path in direction of 2% goal, although no victory but.
  • Too optimistic
    markets not useful in struggle in opposition to inflation.

ECB’s President Lagarde

ECB’s Knot (hawk – non voter in January) pushed again
in opposition to the aggressive fee cuts expectations:

  • Markets are getting
    forward of themselves on fee cuts.
  • Rather a lot should go effectively
    for inflation to hit 2% in 2025.
  • We have to see a
    turnaround in wages.
  • Coverage easing, if
    and when it occurs, will likely be very gradual.
  • Fee path priced by
    markets may be self-defeating.
  • The extra easing
    markets are doing, the much less seemingly we’ll lower.

ECB’s Knot

ECB’s Panetta (dove – voter) stored a impartial stance with
a give attention to incoming knowledge to substantiate the disinflationary development:

  • Disinflation is
    occurring, is robust and can proceed.
  • Financial situations
    ought to regulate however awaiting knowledge first to substantiate disinflation outlook
  • Awaiting knowledge to
    affirm disinflation outlook.

ECB’s Panetta

The US December Retail Gross sales beat expectations throughout
the board:

  • Retail Gross sales Y/Y
    5.6% vs. 4.0% prior.
  • Retail Gross sales M/M
    0.6% vs. 0.4% anticipated and 0.3% prior.
  • Ex-autos M/M 0.4% vs.
    0.2% anticipated and 0.2% prior.
  • Management group M/M
    0.8% vs. 0.2% anticipated and 0.5% prior (revised from 0.4%).
  • Retail gross sales ex gasoline
    and autos M/M 0.6 vs. 0.6% prior.

US Retail Gross sales YoY

The US December Industrial Manufacturing beat

  • Industrial
    Manufacturing Y/Y 1.0% vs. -0.6% prior (revised from -0.4%).
  • Industrial
    Manufacturing M/M 0.1% vs. 0.0% anticipated and 0.0% prior (revised from 0.2%).
  • Capability utilization
    78.6% vs. 78.7% anticipated and 78.6% prior (revised from 78.8%).

US Capability Utilization

The US December NAHB Housing Market Index beat

  • NAHB 44 vs. 39
    anticipated and 37 prior.
  • Single household 48 vs. 41 prior.
  • Subsequent six months 57
    vs. 45 prior.
  • Visitors of
    potential patrons 29 vs. 24 prior.

US NAHB Housing Market Index

The Federal Reserve launched the Beige Ebook for This fall
with most districts reporting little or no change in financial exercise:

  • Of the 4
    Districts that differed, three reported modest development and one reported a
    reasonable decline.
  • Customers delivered
    some seasonal aid over the vacations by assembly expectations in most
    Districts and by exceeding expectations in three Districts.
  • Contacts from practically
    all Districts reported decreases in manufacturing exercise.
  • Districts continued
    to notice that prime rates of interest have been limiting auto gross sales and actual property
    offers; nonetheless, the prospect of falling rates of interest was cited by
    quite a few contacts in varied sectors as a supply of optimism.
  • issues in regards to the
    workplace market, weakening general demand, and the 2024 political cycle have been
    typically cited as sources of financial uncertainty.
  • Seven Districts
    described little or no internet change in general employment ranges, whereas the
    tempo of job development was described as modest to reasonable in 4 Districts.
  • Six Districts famous
    that their contacts had reported slight or modest worth will increase, and two
    famous reasonable will increase. 5 Districts additionally famous that general worth
    will increase had subsided to some extent from the prior interval, whereas three
    others indicated no important shift in worth pressures.
  • Corporations in most
    Districts cited examples of regular or falling enter costs, particularly in
    the manufacturing and development sectors, and extra discounting by auto
  • Premium will increase
    for property and casualty insurance coverage and for medical health insurance proceed to
    influence most companies.

Beige Ebook

The Australian December Labour Market report missed
expectations by an enormous margin:

  • Employment Change
    -65.1K vs. 17.6K anticipated and 72.6K prior (revised from 61.5K).
  • Unemployment Fee
    3.9% vs. 3.9% anticipated and three.9% prior.
  • Participation Fee
    66.8% vs. 67.1% anticipated and 67.3% prior (revised from 67.2%).
  • Full-time
    employment -106.6K vs. 57K prior.
  • Half-time
    employment 41.4K vs. 15.7K prior (revised from 4.5K).

Australia Unemployment Fee

The US Jobless Claims beat expectations by an enormous
margin (this report corresponds with the NFP survey week):

  • Preliminary Claims 187K
    vs. 207K anticipated and 203K prior (revised from 202K).
  • Persevering with Claims
    1806K vs. 1845K anticipated and 1832K prior (revised from 1834K).

US Jobless Claims

The US December Housing Begins and Constructing Permits
beat expectations:

  • Housing begins
    1.460M vs. 1.426M anticipated and 1.525M prior (revised from 1.560M).
  • Housing begins M/M
    -4.3% vs. 10.8% prior (revised from 14.8%).
  • Constructing permits
    1.495M vs. 1.480M anticipated and 1.467M prior.
  • Constructing permits M/M
    1.9% vs. -2.1% prior.

US Housing Begins and Constructing Permits

The New Zealand December Manufacturing PMI fell
additional into contraction:

  • Manufacturing PMI
    43.1 vs. 46.7 prior.

New Zealand Manufacturing PMI

The Japanese December CPI eased additional throughout all

  • CPI Y/Y 2.6% vs.
    2.8% prior.
  • Core CPI Y/Y 2.3%
    vs. 2.3% anticipated and a pair of.5% prior.
  • Core-Core CPI Y/Y
    3.7% vs. 3.8% prior.

Japan Core-Core CPI YoY

The UK December Retail Gross sales missed expectations by a
huge margin:

  • Retail gross sales M/M
    -3.2% vs. -0.5% anticipated and 1.4% prior (revised from 1.3%).
  • Retail gross sales Y/Y
    -2.4% vs. 1.1% anticipated and 0.2% prior (revised from 0.1%).
  • Retail gross sales (ex
    autos, gasoline) M/M -3.3% vs. -0.6% anticipated and 1.5% prior (revised from
  • Retail gross sales (ex
    autos, gasoline) Y/Y -2.1% vs. 1.3% anticipated and 0.5% prior (revised from

UK Retail Gross sales YoY

The Canadian November Retail Gross sales missed

  • Retail Gross sales M/M
    -0.2% vs. 0.0% anticipated and 0.5% prior (revised from 0.7%).
  • Retail Gross sales Y/Y
    1.8% vs. 1.9% prior (revised from 2.2%).
  • Ex auto M/M -0.5%
    vs. -0.1% anticipated and 0.4% prior (revised from 0.6%).
  • Ex auto and gasoline M/M
    -0.6% vs. -1.2% prior.
  • December advance estimate 0.8%.

Canada Retail Gross sales YoY

Fed’s Goolsbee (dove – non voter) reiterated that fee
cuts can come simply from inflation progress but when that progress have been to
reverse, then a fee hike could be warranted:

  • If we make good
    progress on inflation, we have to issue that into charges.
  • Items worth
    inflation is again to regular and stunning progress on companies inflation
  • Says they should
    see extra progress on housing inflation.
  • When the
    unemployment fee goes up, it tends to go up quickly; we have not had that.
  • We’re coming into
    2024 in a significantly better place than we got here into 2023.
  • The market needs to be
    specializing in financial knowledge.
  • “We’re
    undoubtedly not off the Golden Path”.
  • The Fed will not be
    going through an imminent menace from the labour market.
  • If inflation
    progress reverses, it may benefit a fee hike

Fed’s Goolsbee

The January College of Michigan Client Sentiment
survey beat expectations throughout the board:

  • Client sentiment 78.8 vs. 70.0 anticipated and
    69.7 prior.
  • Present
    situations 83.3 vs. 73.3 prior.
  • Expectations
    75.9 vs. 66.4 prior.
  • One-year inflation 2.9% vs. 3.1% prior.
  • 5-year inflation 2.8% vs. 2.9% prior.

College of Michigan Client Sentiment

The highlights for subsequent week
will likely be

  • Monday: PBoC LPR, New Zealand Companies PMI.
  • Tuesday: BoJ Coverage Resolution, New Zealand CPI, Australia
    Flash PMIs.
  • Wednesday: Japan/Eurozone/UK/US Flash PMIs, BoC Coverage
  • Thursday: ECB Coverage Resolution, US Sturdy Items Orders, US
    Jobless Claims, US This fall Advance GDP.
  • Friday: Tokyo CPI, US PCE.

That’s all of us. Have a pleasant weekend!