Indices

UK inflation ticked up in December as today’s data showed, weighing on the index, amidst broader monetary policy uncertainty and geopolitical jitters

The German index is subdued as markets digest today’s data showing the economy shrunk last year, but prospects of an ECB pivot are supportive

The UK index rebounds from critical support today, as data showed GDP growth of 0.3% in November, but improving economic conditions could prolong the central banks restrictive stance

The SPX500 is in bullish mode. It is above its black 30-week EMA, with the EMA pointing up. Its momentum-based RSI is above 50 (green rectangle), denoting a positive underlying momentum. However, there is a resistance area around 4,800 (red rectangle).

The US index is subdued, as Friday’s robust jobs report raises the bar for rate cuts by the Fed and casts some doubt over aggressive market expectations

There is a relationship between the 10-year real rate and the SPX500. The correlation coefficient between the two is a robust -87%. I.e. they generally travel together but in opposite directions. This makes sense given the time value of money of the SPX500, where a lower real rate will tend to support the stock market.

The Fed maintained rates at 5.5% and kept more hikes on the table, but the updated projection imply at least three cuts in 2024, sending NAS100 close to new record highs

The Fed, yesterday, held the policy rate steady at 5.25-5.5%, which was largely expected. However, it did surprise with a dovish tone maintaining that growth “has slowed” and “inflation has eased.” The dot plot showed an extra cut for 2024, now numbering 75bps as opposed to 50bps as signalled in the September update. Moreover, the final hike as per September was omitted so the Fed funds rate is now 4.6%…

The index maintains its upside bias as today’s data showed another moderation in wage growth, but looks to Thursday’s policy decision by the central bank of England

China’s inflation contacted at the fastest pace in three years despite Beijing’s efforts to support domestic consumption, leading HKG33 to new 2023 lows

In the first half of November, the GER30’s RSI broke above the green downsloping green trendline at 1. This suggested that positive momentum was expanding. This was confirmed by the index crossing above its black 30-week EMA and the EMA’s direction shifting upwards at 2. These are regarded as positive developments and the longer that the weekly RSI maintains above 50, the greater the underlying momentum support for the GER30.…