China's central bank again eased its key interest rates, thus strengthening monetary policy incentives to support the domestic economy. The People's Bank of China lowered the key interest rate for one-year loans by ten basis points to 3.7% and for the first time since April 2020 the interest rate for five-year loans by five basis points to 4.6%. China had already stepped up monetary easing measures earlier this week to support its slowing economy. Most new and outstanding loans in China are based on the one-year LPR. The five-year rate influences mortgage pricing. On stock exchanges in the Far East, monetary easing caused prices to rise.
On Wall Street, the Dow Jones Industrial and the S&P 500 each fell by almost one percent. On the Nasdaq technology exchange, too, interest rate expectations are causing continuing pressure and the indices closed around one percent lower. The Nasdaq 100 fell to its lowest level in three months. Even positive economic data, such as new housing starts (December +1.4%) and building permits (+9.1%), which are indicative of future construction activity, failed to provide positive impetus and brighten the battered stock market sentiment.
UK consumer prices rose by +5.4% on an annual basis at the end of last year, the highest rate of inflation observed since the start of the data series in 1997. The price jump was also stronger than analysts expected, as the consensus was +5.2%. More expensive than a year ago were mainly services, food, and transport. As is well known, the Bank of England has already responded to the rising inflationary pressure with a first interest rate hike and is also signaling its willingness to raise interest rates further.
According to a recent survey by the Munich-based Ifo Institute for Economic Research, German companies expect prices to continue rising. The background to this is rising energy prices and higher costs for the procurement of intermediate products. This will sooner or later also have an impact on consumer prices, Ifo commented. On a positive note, it pointed out that wage negotiations to date did not point to a wage-price spiral. However, inflationary pressure is not expected to weaken until the end of the current year. For the year, Ifo forecasts an inflation rate in Germany of around +3.5%.
US Secretary of State Antony Blinken warned during his visit to the Ukrainian capital Kiev that the ongoing conflict is about “more than Ukraine.” Russia's aggressions challenged the fundamental principles on which the entire international system is based and threaten peace and security, he said. If these principles are violated with impunity, it could open a “Pandora's box.” After a subsequent visit to Berlin, Blinken will then meet Russian Foreign Minister Sergei Lavrov for talks in Geneva on Friday.
|08:00||GE||Producer Prices (December, y/y)||+19.2%|
|08:45||FR||Economic Sentiment Indicator (January)||+111.0|
|09:00||AUT||Consumer Prices (December, y/y)||+3.8%|
|11:00||EZ||Consumer Prices (December, m/m)||+0.4%|
|11:00||EZ||Consumer Prices (December, y/y)||+5.0%|
|11:00||EZ||Core Consumer Prices (December, y/y)||+2.6%|
|14:30||US||Philly Fed Manufacturing Indicator (January)||+19.0|
|14:30||US||Initial Jobless Claims (weekly)||230,000|
|16:00||US||New Home Sales (December, m/m)||+1.9%|
|SZ||Zur Rose||Q4 Sales|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
Editor: Alessandro Fezzi, +41 44 250 78 59, E-Mail: firstname.lastname@example.org
Source: LGT Bank (Switzerland) Ltd.
Risk Disclosure (Disclaimer)
This publication is an advertising material / marketing communication. This publication is for your information only and is not intended as an offer, solicitation of an offer, or public advertisement to buy or sell any investment or other specific product. Its content has been prepared by our staff and is based on sources of information we consider to be reliable. However, we cannot provide any confirmation or guarantee as to its being correct, complete and up to date. The circumstances and principles to which the information contained in this publication relates may change at any time. Information that has been published should therefore not be understood as implying that no change has taken place since its publication or that it is still up to date. The information in this publication does not constitute an aid for decision-making in relation to financial, legal, tax-related or other consulting matters, nor should any investment decisions or other decisions be made on the basis of this information alone. It is recommended that advice be obtained from a qualified expert. Investors should be aware that the value of investments can fall as well as rise. Positive performance in the past is therefore no guarantee of positive performance in the future. Investments in foreign currencies are also subject to fluctuations in exchange rates. We disclaim all liability for any loss or damage of any kind, whether direct, indirect or consequential, which may be incurred through the use of this publication. This publication is not intended for persons subject to legislation that prohibits its distribution or makes its distribution contingent upon an approval. Any person coming into possession of this publication shall therefore be obliged to find out about any restrictions that may apply and to comply with them. In line with internal guidelines, persons responsible for compiling this report are free to buy hold and sell the securities referred to in this report.