Tassi di interesse della banca centrale

These 3 themes drive the stock markets today

Markets today concentrated on 3 hot topics, from China's moves to tensions in the Red Sea, up to bets on Fed rate cuts and the potential reactions of the dragon after the elections in Taiwan.
Asian stock markets closed the session with uncertain sentiment in China, while the Japanese Nikkei continued its run, closing trading in the name of gains.
US stock and bond markets will remain closed today for Martin Luther King Day.
In the US on Friday night, all three major indexes closed mixed.
The start to the fourth quarter earnings season was less than stellar, with four major banks posting disappointing results.
The spotlight today is on 3 themes considered crucial by investors to orient themselves between shares, bonds, raw materials and to define the direction of the world stock markets in this new trading day.
read also Stock market at risk of reversal for these 3 reasons 1.
China is the absolute protagonist.
The reasons The People's Bank of China kept the rate on its one-year loans unchanged on Monday, disappointing investors who were expecting the first intervention since August.
As the central bank pumped more liquidity into the system to meet financing demand, another round of weak credit data last Friday had bolstered expectations for bolder steps.
Data released on January 12 showed Beijing recorded its longest deflationary streak since 2009 in December, while financing and lending growth last month missed expectations and exports fell annually last year for the first time since 2016.
President Xi Jinping's government is grappling with weak domestic demand, a prolonged housing crisis and a lack of momentum in the job market.
Full GDP data for 2023 due on Wednesday will paint a clearer picture.
Post elections in Taiwan: will China react? There has so far been limited reaction to the Democratic Progressive Party's weekend victory in Taiwan, which left the cross-strait status quo largely intact, with Beijing predictably angered by the election of the most separatist candidate.
Taiwan's President-elect Lai Ching-te will face a divided parliament that is likely to moderate his policy agenda, according to early post-vote analysis.
The result could see Lai embrace a more restrained policy towards the dragon, although Beijing is likely to increase pressure on Taiwan's government when Lai is officially sworn in as president in May.
The new Parliament will take office next month.
read also William Lai, the challenges of the new president of a divided Taiwan “Lai refrained from provocative pro-independence rhetoric during the campaign, and our baseline scenario is that his administration will show continuity with Tsai, who has exploited anti-continental sentiment while avoiding obvious provocations,” said Gabriel Wildau, CEO of Teneo.
Potential tensions with China over the Taiwan issue – which could also involve the US defending Taipei in the event of a military attack – were a reminder that geopolitics will loom over markets this year, with elections around the world and the threat of conflict largest in the Middle East.
“For now, we think China is still focused on building economic stability,” said Damien Boey, chief macro strategist at investment bank Barrenjoey in Sydney.
Central banks and rates in focus The question that dominates investors is still the one about the moves of the Fed and the ECB: when will they start cutting rates? According to Reuters, futures now imply a 73% chance of a first cut in the Fed's borrowing costs in March, as last Friday's weak producer prices report helped offset disappointment in consumer price data from previous day (increasing).
Markets are also pricing in an ECB cut in April, although its chief economist at the weekend pointed to June as a more likely window.
read also Are these 5 unknowns about to overwhelm the markets?

Author: Hermes A.I.

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