Macro-News round-up:

– Asia: China’s PMI data was released early this morning.  The composite PMI comes in at 50.9. The services PMI rises to 50.7, but the manufacturing PMI for January indicates contraction at 49.2, a relative improvement from the previous period of 49 points.

Yesterday, Chinese equities fell, suggesting that the recent actions taken by the authorities have not had much of an effect. Both the CSI 300 and the Hang Seng are down 1.78 and 2.33%, respectively.

Taiwan’s trade-dependent economy expanded 1.4% for the entire year of 2023, quicker than anticipated in the fourth quarter due to robust domestic demand and a resurgence in exports.

Japan: According to the Ministry of Economy, Trade and Industry’s preliminary report released on Wednesday, industrial production in Japan grew by 1.8% month over month in December 2023, reversing from a 0.9% decline in the previous month but falling short of market expectations of a 2.4% expansion. However, Japan’s retail sales increased 2.1% year over year in December 2023, falling short of the market’s forecasts for a 4.7% expansion and following a 5.4% gain in November.

The economy grew at a seasonally adjusted annualised pace of 8.79% quarter over quarter. The third quarter saw a 2.32% year-over-year growth in GDP. Additionally, domestic consumption has recovered successfully after the COVID-19 epidemic.

– US: Yesterday’s US data showed an improvement in consumer confidence, which rose to 114.8.  The Job Openings also indicated good job creation. In this regard, today we will have ADP surveys for Friday’s NFP, a data that usually generates volatility in the markets.

US equities indicate some changes. SP500 futures are retreating while the county remains bullish, reducing the contango situation.  At the moment the SP500 is above 4900 points.

The European session does not seem to be going badly either, with the Dax40 on the verge of reaching new all-time highs at 17,000 points.

– Europe: Today we will know the German inflation rate, so far we have the regional data and they seem to be positive showing a decrease in inflation. Germany’s most populous state, North Rhine-Westphalia, saw a decrease in inflation from 3.5% in December to 3.0% in January.

More macro data from Germany has been released today. In December 2023, Germany’s retail sales fell by 1.60% from the previous month. The unemployment rate has decreased by 0.1% compared to the previous period, standing at 5.8%. Post auction, German bond yields rebounded slightly, with the 10-year bond at 2.23 from 2.19 at the previous auction. Indicating lower demand for the bond and a mild rebound in risk. 

France’s inflation rate dropped from 3.70% in December 2023 to 3.10% in January. In January 2024, there was a 0.20% reduction in the Consumer Price Index compared to the previous month.

– Commodities: European natural gas futures have reached €30 per megawatt-hour, the highest level in two weeks. This increase is attributed to escalating tensions in the Middle East. The contract for March delivery has risen for four consecutive days, marking the longest streak of gains since October. The energy market is closely watching for a response from the United States following a drone attack that resulted in the death of American troops in Jordan over the weekend.

– Geopolitics: In reaction to Washington’s purported plans to transfer its own tactical weapons to Europe, Aleksey Zhuravlev, the first deputy chairman of the Russian parliamentary defense committee and head of the Rodina (Motherland) party, has proposed that Russia should station its nuclear weapons in “friendly countries” close to the US.