After the Federal Reserve shook up financial markets once again last week with its more restrictive stance, the focus will again be on two weighty interest rate decisions this week. The European Central Bank continues to assume that inflation will fall soon and is therefore maintaining its expansionary monetary policy for the time being. The Bank of England, on the other hand, has already reacted to the increased inflationary pressure. Both central banks will announce their decision on Thursday. Apart from this, investors are likely to hope for fresh impetus from the earnings season.
The stock exchanges in New York ended trading on Friday in the higher after a volatile week. The S&P 500 climbed more than 2% and the technology index Nasdaq 100 advanced by more than 3%. The Dow Jones Industrial gained about 1.6%. In Asia, stock markets start the new week mixed. In Tokyo, the Nikkei is 1.2% firmer. The Hang Seng in Hong Kong is also clearly in the plus, while the Shanghai Composite loses about 1%.
In addition to the central bank decisions in Frankfurt and London, there are again some important and potentially market-moving quarterly results of blue chip companies on the agenda this week. These include Alphabet and UBS (Tuesday), Novartis, Sony and Meta (Wednesday), Roche, ABB, Merck & Co and Amazon (Thursday), Sanofi (Friday). The trading week will also be influenced by the Chinese New Year in Asia.
The dynamic in China's industry has cooled at the beginning of the year. The Caixin/Markit manufacturing purchasing managers' index (PMI) fell to 49.1 points in January, from 50.9 the previous month. This is the weakest reading since February 2020. Observers had expected a decline to 50 points. The government-surveyed PMI fared somewhat better. It fell in January from 52.7 to 51.1 points.
According to the International Monetary Fund (IMF), the Chinese economy has also lost momentum and is in a "significant slump." The world's second-largest economy is forecast by the IMF to grow by +4.8% this year. Previously, the forecast was +5.6%. This is due to the reduction in government stimulus, the central government's focus on debt reduction and regulatory measures in the technology sector.
In Japan, industrial production fell more than expected at the end of the year. It fell by one percent in December compared with the previous month.
According to the latest survey results from the University of Michigan, consumer confidence among Americans has deteriorated significantly at the beginning of the year. The corresponding barometer fell to its lowest level since November 2011. Sentiment is being weighed down by the ongoing pandemic on the one hand and high inflation on the other.
The German economy contracted by -0.7% quarter-on-quarter in the final quarter of last year and was weaker than expected. Economists had expected a decline of -0.5%. In the previous quarter, Europe's largest economy had grown by +1.3% on a quarterly basis. Private consumption in particular was weaker in Q4, against the background of rising corona case numbers. Germany reported GDP growth of +2.8% for the full year 2021.
By contrast, France's economy continued its recovery in the final three months of 2021 and expanded by +0.7% quarter-on-quarter. Analysts had forecast +0.5%. Nevertheless, the pace of recovery has also slowed significantly in Europe's second-largest economy. In Q3, the growth rate was still +3.1%. For 2021 as a whole, France is forecasting GDP growth of +7.0%, following a slump of -8.0% in 2020.
The Spanish economy also grew in the final quarter of 2021. GDP increased by +2.0% compared with the previous quarter, thus growing much more strongly than expected at +1.4%. In 2021 as a whole, economic growth was +7.2%.
|08:00||GE||Import prices (December, y/y)||+24.7%|
|09:00||ESP||Consumer Prices (January, y/y)||+6.6%|
|09:00||ESP||GDP Q4 (q/q)||+2.6%|
|09:00||AUT||GDP Q4 (q/q)||+3.8%|
|10:00||IT||GDP Q4 (q/q)||+2.6%|
|11:00||EZ||GDP Q4 (q/q)||+2.2%|
|14:00||GE||Consumer Prices (January, y/y)||+5.7%|
|15:45||US||Chicago PMI (January)||64.3|
Publisher: LGT Bank (Switzerland) Ltd., Glärnischstrasse 36, CH-8027 Zurich
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Source: LGT Bank (Switzerland) Ltd.
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