China’s GDP data beat expectations of 5%. Malaysia’s Q4 GDP growth slowed to 4.8%

The Dow Jones (US30) Index fell by 0.16% at the end of Thursday. The S&P500 Index (US500) was down 0.21%. The Nasdaq Technology Index (US100) decreased by 0.69%. Weakness in mega-cap technology stocks on Thursday impacted the broader market. Health insurance stocks also declined, hurting the broader market after UnitedHealth Group fell more than 6% after reporting weaker-than-expected fourth-quarter earnings. Bond yields declined slightly amid dovish comments from Fed Chief Waller, who said that if inflation is falling, rate cuts could be larger than the market expects, with 3-4 rate cuts possible this year if data is favorable.

The Canadian dollar weakened to 1.44 per dollar, approaching the January 2016 low of 1.445, driven by monetary policy divergence, weak domestic data, and geopolitical uncertainty. Aggressive rate cuts by the Bank of Canada (expected to be 25 bps lower this month) contrast with the Federal Reserve’s less lenient stance, contributing to a widening yield gap between US and Canadian government bonds, which draws capital to the US dollar, adding pressure on the loonie.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) rose by 0.39%, France’s CAC 40 (FR40) closed 2.14% higher, Spain’s IBEX 35 (ES35) index fell by 0.49%, and the UK’s FTSE 100 (UK100) closed 1.09% yesterday. The FTSE 100 (UK100) Index rose to a three-month high on Thursday, supported by investor optimism over a possible rate cut.

Silver (XAG/USD) slipped to $30.66 per ounce on Friday but maintained its trend for a third straight weekly gain, helped by a decline in US core inflation that reinforced expectations of further interest rate cuts by the Federal Reserve this year. However, despite the bullish momentum, silver prices remain below the 12-year high of $35 reached in October as concerns over uncertain industrial demand persist.

WTI crude oil prices rose above $79 a barrel on Friday, rebounding from the previous session’s losses and heading for a fourth straight weekly gain. The overnight drop was driven by speculation that President-elect Trump may ease sanctions on Russian energy exports as part of diplomatic efforts to resolve tensions between Russia and Ukraine. Reports of a cease-fire in the Middle East also helped lower the geopolitical risk premium.

The US natural gas prices (XNG/USD) eased slightly to $4.055/MMBtu after the EIA reported declining storage inventories in line with expectations. Federal data showed that utilities pulled 258 billion cubic feet of gas from storage in the week ended Jan. 10, well above the 150 Bcf in the same week last year and well above the five-year average of 128 Bcf. Analysts expect the next two January 17 and 24 reports to show further consumption above 200 Bcf amid rising heating demand.

Asian markets were mostly up. Japan’s Nikkei 225 (JP225) was up 0.33%, China’s FTSE China A50 (CHA50) was down 0.21%, Hong Kong’s Hang Seng (HK50) added 1.23% and Australia’s ASX 200 (AU200) was positive 1.38% for yesterday.

China’s economy grew at an annualized rate of 5.4% in the fourth quarter of 2024, accelerating from 4.6% in the third quarter and beating expectations of 5%. Industrial production and retail sales in December exceeded forecasts, while new home prices declined. The latest data did not indicate whether Beijing will take additional stimulus measures in the near term. However, state media reported that China’s central bank may lower the reserve requirement ratio for banks ahead of the Spring Festival later this month.

Malaysia’s economy grew at a 4.8% annualized rate in the fourth quarter of 2024, slowing from a 5.3% expansion in the previous quarter. On a seasonally adjusted basis, GDP grew by 2.5% in Q4, easing from an upwardly revised 4.6% growth in the previous quarter.