Macro-News round-up:

UK: More data from UK. Compared to the previous month, retail sales in the UK climbed by 3.40 percent in January 2024; market projections were 1.5%. A positive sign for the UK economy. Over the cable GBPUSD, the data has produced a flash move of more than 20 pips upwards which has quickly deflated.

Inflation seems to be receding further, paving the way for rate cuts in Europe.

France: In January 2024, consumer prices decreased by 0.3% from the previous month, significantly above original projections of a 0.2% decrease and coming after a 0.1% increase in December. According to market expectations, France’s annual inflation rate was confirmed at 3.1% in January 2024, down from 3.7% the month before.

The German DAX40 has comfortably broken the 17,000 point mark.  It remains to be seen whether it will be able to consolidate in the coming sessions.  Other European selective indices, such as the IBEX35, do not seem to be following the trend of the Dax40, remaining sideways, producing some decoupling.

US: Today we will see the PPI data, which has recently been worrying several economies showing contracting rates.  This could be a foreshadowing of inflation that is not only slowing down but could enter negative territory, generating a deflation scenario, which could be, if anything, more dangerous for the economy than the infraction itself. A rate of 0.1% is expected, the previous rate was -0.1%.

Japan: BOJ will eliminate negative rates despite the weak GDP. Despite the economy entering a recession, the Bank of Japan plans to remove negative interest rates in the upcoming months.

Growing labor shortages have prompted numerous companies to announce large compensation increases, raising expectations of widespread wage increases that would provide households with the purchasing power to withstand gradual price increases.

By supporting demand and the overall economy, the BOJ wants to reduce cost-push pressure and sustainably contain inflation near its 2% objective, enabling it to normalize monetary policy.

Impressive, we are close to the USDJPY highs of July 1987 USDJPY@154 and April 1990 USDJPY@160. Today reaching USDJPY@150. These levels will mark historic moments for Japan’s economy.

Geopolitics: The Biden administration creates a new threat to the public.  In this case, the Russians are attacking from space. Russia has reportedly been working on a space-based “anti-satellite capability,” according to sources verified by the White House, although there isn’t a direct threat to public safety. If the “capability” was a nuclear weapon, a nuclear-powered weapon, or a nuclear-capable weapon, it was not made explicit.

However, John Kirby, the advisor for national security communications at the White House, stated, “This is not an active capability that has been deployed.” “There is no immediate threat to anyone’s safety, notwithstanding the disturbing nature of Russia’s pursuit of this particular capacity.