Macro-News round-up:
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Today’s UK economic data looks positive.  The average earnings index rises above expectations to 5.8% from 5.6%. The unemployment rate also improves, falling to 3.8% from 4.2% and beating expectations for unemployment at 4%. However, wages rose at their slowest pace in almost a year. In any case, the Bank of England’s main concern will be that the labor market has not cooled enough to allow a sustainable return to the 2% inflation target. “The worse the better” if we are to see rate cuts in the UK.

The pound’s reaction has been swift.  The GBPUSD cable is rising strongly above 1.2650. But the charts could indicate that in the long term, it is approaching strong correction zones against the dollar.

In Europe, the ZEW economic sentiment and conditions indicator comes out positive for both Europe and Germany.  In France, against market expectations of 7.4%, the unemployment rate remained stable at 7.5% in Q4 2023. However, the European stock markets do not seem to be encouraged.  The DAX 40 index has still not broken through the 17,000 point mark, currently trading at 16,942 points.

Asian stock markets remain closed for the new year. In Japan, tech stocks led advances as Tokyo Electron increased its full-year revenue and profit guidance. Japan’s Nikkei 225 Stock Average momentarily increased by 3%, marking its largest gain since November 2022.

Trade War: In response to allegations that roughly twenty-two companies—three of which are based in China—are aiding Russia’s military operations in Ukraine, the European Union has put forth new trade restrictions. Should it be approved, this would mark the first time since the invasion that the bloc has placed limitations on businesses operating in mainland China. Companies from Turkey, Serbia, India, and Hong Kong are also on the list.

Ukraine demands that Polish farmers be held accountable for grain spills. “For the sake of friendly Ukrainian-Polish relations, the perpetrators of this provocation must be held to account.” Ukrainian Foreign Minister Dmytro Kuleba wrote on X.

Poland’s discontent against what farmers and haulers perceive to be an increase in grain and food imports from Ukraine and unfair competition has affected relations, despite Warsaw’s support for Ukraine during Russia’s invasion. “Help for Ukraine in its fight against Russia’s invasion cannot come at the expense of Polish farmers” Representatives of Poland’s government. Michal Kolodziejczak, the deputy minister of agriculture for Poland, announced earlier on Monday that Warsaw would begin enforcing quality controls on all grain imports coming from Ukraine.


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