End of the tightening cycle for the Bank of Canada?
The Bank of Canada (BoC) raised its policy rate by 25bps to 4.5%, its highest level since 2008. Surprisingly, the central bank and its governor Tiff Macklem stated that the policy rate will be held at its current level unless economic data (#inflation) surprises on the upside. Source: Bloomberg.
China Stocks Rally in Hong Kong as Holiday Spending Recovers
Source: Bloomberg
Investors are flocking to Europe
Top European Stock ETF is Set for Largest Inflow Since ‘21 - Bloomberg. The Vanguard FTSE Europe ETF (#VGK) has lured almost $700 million in January so far. Source: Bloomberg, C.Barraud
US economy expanded at 2.9% annual pace in Q4 2022
US economy expanded at 2.9% annual pace from Oct-Dec, ending 2022 with momentum despite pressure of high interest rates & widespread fears of a looming recession. It nevertheless decelerated from Q3 3.2% annual growth rate. Source: HolgerZ, Bloomberg
Time for emerging market central banks to pivot?
As the Citi Inflation Surprise Index for emerging markets (EM) turned negative for the first time since July 2020, the bond market appears to be hoping for a pivot from EM central banks (CBs). The end of policy tightening in EM is already visible, as the pace and magnitude of rate hikes by EM CBs has begun to slow. Source: Topdown charts.
Tough technical barrier for the Nasdaq
Nasdaq futures had started the year on a strong footing, but are losing steam near the 200-day moving average which has been a tough barrier to cleanly break in the past year.
Downward revision to S&P 500 next 12 month EPS estimates continues
Simple look at blended 12m estimate for S&P 500 earnings per share … +7.5% from start of 2022 into peak (June 2022); -4.5% since peak. Source: Bloomberg, Liz Ann Sonders
US wage growth: mind the the gap...
US workers who switched jobs received pay increases of 7.7% over the last year vs. 5.5% for those who stayed at their jobs. With data going back to 1997, this is the widest gap we've ever seen. Source: Charlie Bilello
