InvestMacro

At Wednesday’s close, the Dow Jones Industrial Average (US30) was up 0.93%. The S&P 500 Index (US500) added 1.08%. The Nasdaq Technology Index (US100) jumped 1.41%. The Fed left the federal funds rate unchanged at 4.25-4.5% at its March 2025 meeting, extending a pause in the rate-cutting cycle that began in January and in line with expectations. Policymakers noted that uncertainty about the economic outlook has increased but still expect interest rates to fall by about 50 bps this year, the same as in the December prognosis. Meanwhile, GDP growth expectations for this year were revised downward to 1.7% from 2.1% in December.

Bitcoin (BTC/USD) traded near the $86,000 mark on Thursday, hitting its highest level in nearly two weeks during the session. Optimism is growing ahead of US president Donald Trump’s speech at the Blockwork digital asset summit later today. Trump will become the first sitting US president to speak at a digital asset conference, signaling his administration’s support for the industry. He has pledged to make the US the world’s capital of digital assets and recently created the Bitcoin Strategic Reserve and the US Digital Asset Reserve.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) was down 0.40%, France’s CAC 40 (FR40) closed up 0.70%, Spain’s IBEX 35 (ES35) added 0.40%, and the UK’s FTSE 100 (UK100) closed positive 0.02%. European equities rose for a fourth session on Wednesday, amid additional support from increased deficit spending as markets assessed the likelihood of a prolonged ceasefire between Russia and Ukraine. Meanwhile, Germany’s Bundestag approved an expected amendment to the debt brake that will boost budget spending on infrastructure and defense.

WTI crude oil prices traded near $67 per barrel amid rising US crude inventories and economic concerns weighing on prices despite geopolitical tensions. The latest EIA report showed a larger-than-expected 1.75 million barrel increase in nationwide inventories, although inventories in Cushing, Oklahoma, declined and fuel stocks fell.

Asian markets were mostly up yesterday. Japan’s Nikkei 225 (JP225) was down by 0.25%, China’s FTSE China A50 (CHA50) rose by 0.75%, Hong Kong’s Hang Seng (HK50) added 0.12%, and Australia’s ASX 200 (AU200) was positive 1.07%.

The Australian dollar fell below $0.635 on Thursday, marking the third consecutive decline, as traders reassessed the Reserve Bank of Australia’s (RBA) monetary policy outlook following weaker-than-expected employment data. Australia’s unemployment rate was unchanged at 4.1% in February, but the number of jobs unexpectedly fell, raising concerns about labor market softness. Market expectations for the next RBA rate cut continue to diverge, with some analysts predicting it will happen as early as May, while others expect it in July or August.

The New Zealand dollar fell to as low as 0.579 dollars on Thursday, even after data showed that the country’s economy came out of recession. New Zealand’s economy grew by 0.7% quarter-on-quarter in Q4, exceeding analysts’ expectations of 0.4% and the Reserve Bank’s expectations of 0.3%, after a revised 1.1% contraction in Q3. At the same time, annual GDP fell to a positive 1.1%, slightly better than the 1.4% decline expected. Despite the improvement, economic challenges remain and external factors, in particular escalating trade tensions, continue to pose risks. Expectations for policy easing remain firm, with markets expecting a rate cut of around 60 bps, equivalent to two or three rate cuts before the end of the year.

In March 2025, the PBOC kept key lending rates unchanged for the fifth consecutive month, in line with market expectations. The one-year prime rate, which is the benchmark for most corporate and home loans, was 3.1%, and the five-year prime rate, which guides real estate mortgages, remained unchanged at 3.6%. Both rates remain at historic lows after declines in October and July 2024. However, the PBOC noted that it will lower interest rates and adjust the bank’s reserve requirement rate at an appropriate time.

At the end of Tuesday, the Dow Jones Index (US30) fell by 0.62%. The S&P 500 Index (US500) was down 1.07%. The Nasdaq Technology Index (US100) lost 1.66%. Tesla shares fell by 5.3% after RBC Capital Markets lowered its price target, citing increasing EV competition. Alphabet shares fell by 2.3% after news that Google will acquire cloud security company Wiz for $32 billion. Other tech giants including Nvidia and Palantir also fell in price by 3.4% and 4% respectively. Investors are on edge ahead of Wednesday’s Federal Reserve decision, with markets generally expecting rates to remain unchanged. Meanwhile, a stronger-than-expected rise in housing starts contrasted with inflation concerns over pressure on import prices, adding to market uncertainty.

Equity markets in Europe rose steadily yesterday. Germany’s DAX (DE40) rose by 0.98%, France’s CAC 40 (FR40) closed 0.50% higher, Spain’s IBEX 35 (ES35) gained 1.58%, and the UK’s FTSE 100 (UK100) closed positive 0.29%. Germany’s outgoing parliament approved a significant increase in government borrowing, including a major overhaul of the country’s debt rules. The deal, negotiated by the election-winning conservative CDU/CSU bloc, as well as the SPD and Greens, exempts defense spending from debt limits and sets out a €500 billion infrastructure investment plan. As for monetary policy, traders have lowered expectations for ECB rate cuts this year and are now only looking at two cuts, likely in April and June. In addition, interest rates are not expected to fall below 2%.

WTI crude oil prices fell to $66.9 a barrel on Tuesday, wiping out gains over the past two sessions as the market is pressured by oversupply concerns. Oil demand is slowing due to weakening global trade and shipping, exacerbated by the ongoing trade war unleashed by US President Donald Trump, which continues to weigh on major economies and reduce growth. In addition, OPEC and its allies are set to increase production by 138,000 barrels per day, the first increase since 2022, leading to an expected surplus. Meanwhile, hopes for a ceasefire in Ukraine have led to speculation that sanctions on Russian oil could be lifted, potentially leading to a rebound in supplies.

The US natural gas prices (XNG/USD) rose more than 2% to $4.1 per mmbpd on Tuesday on record LNG exports and lower daily production. Output fell to a three-week low of 104.1 bcf/d, although the monthly average remains above February’s record.

Asian markets were mostly rising yesterday. Japan’s Nikkei 225 (JP225) rose by 1.20%, China’s FTSE China A50 (CHA50) fell by 0.16%, Hong Kong’s Hang Seng (HK50) gained 2.46%, and Australia’s ASX 200 (AU200) was positive 0.08%. Mainland Chinese stocks retreated from multi-month highs as investors booked profits following a strong rally in Chinese technology and artificial intelligence-related stocks. The sector was also pressured by a renewed sell-off in shares of US tech giants.

The Bank of Japan left interest rates unchanged at 0.5%, as expected. The Central Bank maintained its expectations that Japan’s economy is likely to continue growing above potential but acknowledged some signs of weakness. Policymakers also favored giving more time to assess the impact of rising global economic risks, particularly higher US tariffs. Meanwhile, the monthly Tankan survey showed Japanese manufacturers were pessimistic in March amid concerns over US tariffs and a slowdown in China’s economy. Separate data showed Japan’s trade balance turned into a surplus in February, helped by strong exports.

The Australian dollar stabilized near $0.636 on Wednesday after a volatile start to the week as investors continued to assess the Reserve Bank of Australia’s monetary policy outlook. On Tuesday, RBA assistant governor Sarah Hunter said the February interest rate cut was aimed at easing restrictive policy, but emphasized that the board remains more cautious than markets about further rate cuts.

Despite Friday’s good growth, US indices closed the week in negative territory. On Friday, the Dow Jones (US30) Index gained 1.65% (for the week -2.40%). The S&P 500 Index (US500) increased by 2.13% (for the week -1.16%). The Nasdaq Technology Index (US100) was up 2.49% (for the week -0.62%). Stocks were under pressure last week on concerns that US tariffs would dampen economic growth and corporate earnings. Last Tuesday, President Trump imposed 25% tariffs on Canadian and Mexican goods and doubled tariffs on Chinese goods to 20% from 10%. Trump also confirmed that he will impose retaliatory tariffs against foreign countries on April 2 as planned. Trade tensions escalated on Wednesday when the European Union imposed tariffs on up to $28.3 billion worth of US goods, including soybeans, beef, and poultry, in response to US tariffs on steel and aluminum imports. In addition, Canada announced 25% counter-tariffs on about $20.8 billion worth of US-made goods, such as computers and sporting goods, as well as US steel and aluminum products.

Last week, the US dollar hit new lows for the year against the Chinese yuan, Mexican peso, euro, sterling, Japanese yen, Swedish króna and Norwegian krona. The architects of the new US foreign economic policy expected the dollar’s strength to absorb some cost of US tariffs and expected some exporters to cut prices. Instead, the dollar has mostly fallen against major currencies.

The Mexican peso (MXN) strengthened to 19.9 per US dollar in March, hitting a four-month-high, thanks to a high interest rate differential and resilient external accounts. With Banxico’s benchmark rate at 10.50%, the currency is benefiting from an attractive trade amid easing US rate expectations. In addition, the government’s calm, negotiation-oriented approach to tariff disputes has resulted in favorable concessions and minimal retaliation in key sectors such as auto and electronics.

Equity markets in Europe were mostly up on Friday. The German DAX (DE40) gained 1.86% (week ended -0.76%), the French CAC 40 (FR 40) closed 1.13% higher (week ended -1.63%), the Spanish IBEX 35 (ES35) gained 1.43% (week ended -1.93%), and the British FTSE 100 (UK100) closed 1.05% higher (week ended -0.55%) on Friday. European markets saw gains, boosted by optimism over German Chancellor Friedrich Merz’s investment plan and hopes for a resolution to the situation in Ukraine. Meanwhile, the ongoing tariff war remains a serious concern.

WTI crude oil prices rose 0.9% to settle at $67.20 per barrel on Friday after a more than 1% decline in the previous session as investors continued to assess ongoing geopolitical uncertainty over the war in Ukraine. Despite Russian President Putin’s tentative support for a ceasefire, confidence in an early resolution of the situation declined. Meanwhile, geopolitical tensions, including Chinese and Russian support for Iran and the expiration of the US energy sanctions license, continue to weigh on market sentiment. Macroeconomic uncertainty is also weighing on oil, with the International Energy Agency warning of a growing supply glut as an escalating trade war reduces demand and OPEC+ increases production.

Asian markets traded flat last week. Japan’s Nikkei 225 (JP225) rose by 0.22%, China’s FTSE China A50 (CHA50) gained 0.56%, Hong Kong’s Hang Seng (HK50) fell by 0.65% and Australia’s ASX 200 (AU200) was negative 1.99%. Hong Kong shares rose 375 points in Monday morning trading, jumping for a second session amid growing optimism over China’s announced plan to stimulate domestic demand. Australian stocks also followed the Hang Seng’s rally.

On Sunday, China’s State Council launched a special action plan to boost domestic consumption, including raising household incomes and setting up a childcare subsidy scheme. The plan also includes measures to stabilize the stock market but does not give details on when and how this might happen. China will expand real estate income channels through stock market stabilization measures and develop more bond products suitable for individual investors. Meanwhile, traders digested good economic data, including a 4% year-on-year rise in retail sales for the first two months of 2025, the fastest pace since October, and a stronger-than-expected 5.9% increase in industrial production. However, the unemployment rate rose to a two-year high of 5.4% in February from 5.2%, exceeding market expectations of 5.1%.

At the end of Wednesday, the Dow Jones (US30) fell by 0.20%. The S&P 500 Index (US500) was up 0.49%. The Nasdaq Technology Index (US100) added 1.13%. Stock indices mostly rose on Wednesday, although the Dow Jones Industrials Index fell to a 6-month low. Stocks found support on Wednesday amid easing price pressures after the February US Consumer Price Index rose less than expected. The February US CPI rose by 0.2% m/m and 2.8% y/y, which was weaker than expectations of 0.3% m/m and 2.9% y/y. February CPI excluding food and energy rose by 0.2% m/m and 3.1% y/y, weaker than expectations of 0.3% m/m and 3.2% y/y. Stock gains were limited by escalating trade tensions. On Wednesday, the European Union imposed tariffs on up to $28.3 billion worth of goods from the US, including soybeans, beef, and poultry, in response to US tariffs on steel and aluminum imports.

The Canadian dollar is holding near 1.44 per dollar, near a one-month low of 1.45 hit on March 3, as Canada imposed retaliatory tariffs of 25 percent on $21 billion worth of US goods after Trump’s duties on steel and aluminum took effect. The move raises costs for US manufacturers and increases trade uncertainty. Meanwhile, the Bank of Canada cut rates by 25 bps to 2.75%, marking a 225 bps easing from June 2024 to counter an expected slowdown in the economy. The Bank of Canada warned that the change in US tariff policy is eroding confidence in the economy and dampening domestic demand, and companies are already struggling to borrow as a weaker loonie drives up the cost of imports. Markets are predicting another rate cut before the end of the year.

Equity markets in Europe were mostly up yesterday. Germany’s DAX (DE40) rose by 1.56%, France’s CAC 40 (FR40) closed higher by 0.59%, Spain’s IBEX 35 (ES35) fell by 0.57%, and the UK’s FTSE 100 (UK100) closed positive 0.53%. The US imposed 25% tariffs on European steel and aluminum, prompting the EU to announce retaliatory tariffs on US goods, resulting in the EU announcing retaliatory duties on €26 billion worth of US goods in April. Market sentiment improved on optimism about a possible ceasefire in Ukraine after Kyiv said it was willing to accept a US-brokered proposal, and after Washington restored military aid and resumed intelligence sharing with Ukraine.

WTI crude oil prices rose more than 2% to above $67.7 a barrel on Wednesday, extending gains for a second session as US data showing strong domestic demand and easing inflation boosted market sentiment. US consumer prices rose at the slowest pace in four months, raising hopes for a more patient Federal Reserve. Crude oil inventories rose by a smaller-than-expected 1.5 million barrels, according to government data.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.07%, China’s FTSE China A50 (CHA50) gained 0.25%, Hong Kong’s Hang Seng (HK50) fell by 0.76% and Australia’s ASX 200 (AU200) was negative 1.32%.

Caution prevailed in China after the end of the ‘two sessions’, with economists warning that the 5% growth target would be difficult to achieve due to intensifying domestic and external factors, as well as Beijing’s modest pledges to boost consumption and reduce overcapacity.

Australia’s Prime Minister said Australia will not impose retaliatory tariffs against the US. Instead, the government will continue to seek an exemption, warning that retaliatory measures could increase consumer spending and lead to higher inflation. Meanwhile, Australia’s consumer inflation expectations for the next 12 months fell to 3.6% in March from 4.6% in February, indicating that price pressures in the economy are easing.

At the end of Tuesday, the Dow Jones Index (US30) fell by 1.14%. The S&P 500 Index (US500) was down 0.76%. The Nasdaq Technology Index (US100) lost 0.28%. On Tuesday, stocks came under pressure after President Trump announced he would raise tariffs on steel and aluminum imports from Canada to 50% from 25% starting Wednesday in response to Ontario’s imposition of a 25% export tariff on US-sourced electricity. However, stocks partially recovered when Ontario Premier Ford said he would suspend the 25 percent tariff on electricity to the US when US Commerce Secretary Lutnick agreed to meet with him in Washington on Thursday. President Trump has also said he is considering eliminating the 50 percent tariffs he initially imposed on Canada.

Tuesday’s economic news in the US showed strength in the labor market, lending support to stocks after the January JOLTS Job Openings Index rose 232,000 to 7.74 million, beating expectations of no change at 7.60 million.

The Mexican peso remained stable at 20.35 in March. The peso was supported by high interest rates in Mexico, which support carry trade flows, as well as a solid external balance, including a trade surplus and strong remittances. However, weak domestic data, including a drop in consumer confidence and a 0.6% contraction in Q4 2024 GDP — the sharpest since 2021 — has reinforced expectations of a rate cut by the Bank of Mexico on March 27, which could undermine the peso’s attractiveness from a yield perspective.

Bitcoin (BTC/USD) rose more than 4% on Tuesday, recovering more than half of Monday’s losses on disappointment that President Trump’s new digital assets’ reserve will only be replenished with digital assets already owned by the government, rather than new digital assets acquired through seizures.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 1.29%, France’s CAC 40 (FR40) closed down 1.31%, Spain’s IBEX 35 (ES35) lost 1.57%, and the UK’s FTSE 100 (UK100) closed down 1.21%. European stocks lost ground on Tuesday, extending their decline from the previous session to a one-month low, as the impact of a slowing US economy outweighed support from increased public spending by Eurozone governments. Companies more exposed to global discretionary demand suffered losses, with Inditex, Ferrari, and L’Oreal falling 1-2%. On the other hand, industrial giants continued to rise on the back of government promises to increase infrastructure and military investment. Schneider, Safran, Airbus added more than 0.6%, while Rheinmetall and Leonardo rose more than 4%, extending momentum for defense contractors. Automakers were also in focus, with Volkswagen shares rising 2% despite aggressive profit cuts and an uncertain future due to US tariffs as investors showed less pessimism than expected.

Asian markets traded flat yesterday. Japan’s Nikkei 225 (JP225) fell 0.64%, China’s FTSE China A50 (CHA50) rose by 0.47%, Hong Kong’s Hang Seng (HK50) lost 0.01% and Australia’s ASX 200 (AU200) was negative 0.91%.

Japan’s largest companies have agreed to significant wage increases for the third consecutive year to help workers cope with rising inflation and ease labor shortages. Labor union group Rengo is pushing for a 6.09% average wage increase this year, the highest demand in 32 years. Broad wage growth is needed for the Bank of Japan to further raise interest rates from 0.5% and for the government to stimulate consumer spending amid stagnant inflation-adjusted wages.

China kept its economic growth target at “around 5%” while setting a record-high fiscal deficit of 4% of GDP. It also lowered its consumer inflation target to 2% and set a target to keep urban unemployment at 5.5%. The 2025 budget signals an increase in public spending to support economic growth.

At the end of Monday, the Dow Jones Index (US30) fell by 2.08%. The S&P 500 Index (US500) was down 2.70%. The Nasdaq Technology Index (US100) decreased by 4.00%. The US market had its worst day of the year yesterday as fears that President Donald Trump’s tariff policies could lead the US economy into recession dampened investor sentiment. Sentiment deteriorated further after President Trump did not rule out the possibility of a US recession this year and noted short-term economic shocks associated with his trade and fiscal agenda in an interview Sunday Morning Futures on Fox News Channel. Trump imposed 25% tariffs on Mexico and Canada last week, but then exempted most goods for a month, creating uncertainty around his trade policy. The US president also raised tariffs on Chinese goods, prompting retaliatory duties from China. He is set to impose retaliatory tariffs globally from April 2, which could further undermine sentiment in the markets. Shares of major technology companies including Tesla (-15.4%), Nvidia (-5%), and Meta (-4.4%) were among the hardest hit, contributing to the broader market’s decline. Tariffs imposed by the Trump administration have raised fears that inflation could rise and make it harder for the Federal Reserve to cut interest rates.

The Goldman Sachs note provides insight into the recent behavior of hedge funds in the stock market, indicating a significant reduction in their exposure to equities. Hedge funds significantly reduced their holdings in stocks last Friday, the largest such move in two years. The size of the moves made by some hedge funds on Friday can be compared to those seen in March 2020, during the first COVID pandemic outbreak, and January 2021. During those periods, hedge funds were forced to wind down their short positions in stocks favored by retail investors.

The Canadian dollar weakened to US $1.44, nearing a one-month low amid sharp policy changes, escalating tariff threats from the US, and disappointing economic data. In a landmark election, former Central Bank official Mark Carney became Canada’s new Prime Minister, taking a hard-line stance and promising to maintain tariffs on US goods until “Americans show us respect,” which, combined with his relative inexperience, increased uncertainty about future trade negotiations and domestic policy direction. In addition, the February jobs report showed that the Canadian economy only added about 1,000 positions versus the expected 20,000, adding to concerns about the economy’s momentum. Given current economic concerns, including trade tensions and a weakening labor market, the Bank of Canada is expected to cut interest rates from 3.00% to 2.75% at its March 12 meeting.

Equity markets in Europe were mostly down yesterday. Germany’s DAX (DE40) fell by 1.69%, France’s CAC 40 (FR 40) closed down 0.90%, Spain’s IBEX 35 (ES35) fell 1.32%, and the UK’s FTSE 100 (UK100) closed down 0.92%. In Europe, traders overlooked a stronger-than-expected recovery in German industrial production in January.

WTI crude oil prices fell to $66 a barrel on Monday amid expectations of weaker demand and ample supply. US President Donald Trump and Treasury Secretary Scott Bessent have signaled that the US could face economic difficulties in the medium term due to trade wars with Canada, China, and Mexico, in addition to promises of aggressive government spending cuts. In China, fresh data showed that consumer and producer prices fell more than expected in February, raising concerns that goods consumption is not being affected by credit growth. This increased the impact of the OPEC+ agreement to raise oil production as early as April after the organization’s members struggled to meet their commitments to cut output.

Asian markets were flat yesterday. Japan’s Nikkei 225 (JP225) rose by 0.38%, China’s FTSE China A50 (CHA50) declined 0.53%, Hong Kong’s Hang Seng (HK50) fell by 1.85%, and Australia’s ASX 200 (AU200) was positive 0.18%. Traders continue to sell stocks amid persistent deflationary pressures in China in February, driven by weakening seasonal demand and cautious household spending due to job and income concerns. In addition, the US is set to inspect China-made chip models used in consumer electronics, which could lead to the imposition of additional tariffs on Chinese products. Meanwhile, China will conclude two sessions today and some traders expect new measures to stimulate the sluggish economy.

Australian consumer sentiment rose to a three-year high in March, helped by the Reserve Bank of Australia’s interest rate cut in February and easing cost-of-living pressures. However, business confidence readings turned negative in February, indicating continued economic concerns. The Australian dollar hovered at $0.627 on Tuesday after three consecutive sessions of declines, hurt by widespread risk aversion in financial markets amid growing fears of a US recession. The Aussie was also hampered by lingering economic uncertainty and lingering deflationary pressures in China, its biggest trading partner, as traders awaited policy announcements after a key meeting in Beijing.

The US market showed the worst week since September. On Friday, the Dow Jones (US30) rose 0.52% (-2.50% for the week). The S&P 500 Index (US500) gained 0.55% (-3.32% for the week). The Nasdaq Technology Index (US100) gained 0.74% (-3.76% for the week). The US stock markets saw a volatile day on Friday, as Wall Street recovered from earlier losses amid continued uncertainty over President Trump’s trade policies. Stocks recovered losses after Fed Chairman Powell said the Central Bank was in no rush to cut interest rates, but the overall economic outlook remains clouded by trade tensions and political uncertainty. Still, economic data showed mixed results as a weaker-than-expected employment report showed non-farm payroll employment rose by 151k in February, while the unemployment rate rose to 4.1%.

Former Canadian Central Bank official Mark Carney has won the race to become leader of Canada’s ruling Liberal Party and will succeed Justin Trudeau as prime minister. During the campaign, Carney said he supported retaliatory tariffs against the US in dollar terms and a coordinated strategy to increase investment. He has repeatedly complained that Canada’s growth under Trudeau has not been good enough. There is a risk that the new prime minister will seek a snap election to get a popular mandate.

Equity markets in Europe were mostly down on Friday. Germany’s DAX (DE40) fell by 1.75% (week-to-date +1.44%), France’s CAC 40 (FR40) closed down 0.94% (week-to-date -0.23%), Spain’s IBEX 35 (ES35) gained 0.17% (week-to-date -0.64%), and the UK’s FTSE 100 (UK100) closed negative 0.03% (week-to-date -1.47%) on Friday. In Europe, European Union leaders reaffirmed their commitment to Ukraine and pledged increased military support during an emergency meeting on Thursday.

WTI crude oil rose 1% to $67 a barrel on Friday after US President Donald Trump threatened sanctions against Russia if it fails to reach a ceasefire with Ukraine. Trump mentioned he was “strongly considering” sanctions against Russian banks and tariffs on Russian goods due to the ongoing attacks.

Asian markets were mostly down last week. Japan’s Nikkei 225 (JP225) was down 1.72%, China’s FTSE China A50 (CHA50) added 0.29%, Hong Kong’s Hang Seng (HK50) increased by 4.71%, and Australia’s ASX 200 (AU200) was negative 3.36%.

China’s consumer prices fell the most in 13 months. Chinese consumer prices fell to 0.7% y/y in February 2025, exceeding market projections that expected a 0.5% decline and reversing the 0.5% rise in the previous month. This marked the first consumer deflation since January 2024 amid weakening seasonal demand following the Spring Festival in late January. On a month-on-month basis, CPI fell by 0.2%, shifting from January’s 11-month high of 0.7%, the first decline since last November. Meanwhile, producer prices fell to 2.2% y/y, marking the 29th consecutive month of decline. The offshore yuan depreciated to around 7.25 per dollar as investors reacted to weaker-than-expected Chinese inflation data that underscored lingering risks of deflation.

Japan’s index of leading economic indicators, which gauges the economic outlook for the coming months based on data such as job offers and consumer sentiment, rose to 108.0 in January 2025 from a downwardly revised 107.9 in December 2024, the highest since last October. Meanwhile, consumer sentiment weakened to its lowest level since March 2023.