At Wednesday’s close, the Dow Jones Industrial Average (US30) added 0.25%, the S&P 500 Index (US500) was up 0.16%. and the Nasdaq Technology Index (US100) rose by 0.04%. Minutes from the Federal Reserve’s December meeting showed that several officials favor a gradual reduction in interest rates throughout 2025. Nearly all Fed officials felt that there were increased upside risks to inflation due to recent stronger-than-expected inflation data and the likely impact of potential changes in trade and immigration policy. Meanwhile, President-elect Donald Trump is considering declaring a national economic emergency to support his proposed tariffs. This has boosted the US Dollar Index but has put pressure on all risk assets.
Ahead of Friday’s jobs report, data showed private-sector hiring and wage growth slowed in December. ADP’s national employment report showed an increase of 122,000 jobs, falling short of the expected 140,000. Weekly initial jobless claims in the US unexpectedly fell by 10,000 to 201,000, indicating a strengthening labor market compared to expectations of a rise to 215,000.
eBay’s (EBAY) stock price rose more than 9% and led the S&P 500 higher after Meta Platforms offered to publish eBay listings on Facebook Marketplace to comply with a European Union antitrust ruling. Moderna’s (MRNA) stock closed down more than 9% after UBS cut its target price on the company’s shares to $96 from $108.
The US stock markets will be closed on January 9 due to a national day of mourning for former President Jimmy Carter.
The Canadian dollar weakened to 1.44 per dollar, nearing January 2016 lows, as investors reacted to increased trade concerns amid political uncertainty following Prime Minister Justin Trudeau’s resignation. Trudeau’s departure amid a crisis that includes a downgrade in his approval rating and looming tariff threats has left Canada without a clear strategy to counter Trump’s proposed tariffs, which could significantly impact Canadian exports.
Equity markets in Europe were mostly down on Wednesday. Germany’s DAX (DE40) fell by 0.05%, France’s CAC 40 (FR40) closed down 0.49%, Spain’s IBEX 35 (ES35) lost 0.12%, and the UK’s FTSE 100 (UK100) closed positive 0.07%. The Eurozone Producer Price Index for November rose by 1.6% m/m, but on an annualized basis the index declined 1.2% y/y, stronger than expectations of positive 1.5% m/m and negative 1.4% y/y.
On Wednesday, US natural gas prices (XNG/USD) rose more than 6% to above $3.6/MMBtu, helped by supply disruptions and strong global demand. The US utilities are drawing natural gas from storage at a faster-than-expected pace as colder-than-normal weather is expected to persist throughout January. Supply constraints have been exacerbated by increased volumes of gas going to LNG export plants due to Europe’s rejection of Russian pipeline supplies. As extreme cold weather is estimated to persist, fears of further supply cuts are pushing prices higher.
Asian markets were predominantly down yesterday. Japan’s Nikkei 225 (JP225) was down 0.26%, China’s FTSE China A50 (CHA50) lost 0.17%, Hong Kong’s Hang Seng (HK50) fell by 0.86%, while Australia’s ASX 200 (AU200) was positive 0.77%.
The People’s Bank of China (PBOC) will auction CNY60 billion worth of six-month bills on the Hong Kong market on January 15 to boost overseas demand for the currency, the Hong Kong Monetary Authority (HMA) said in a statement. The issuance will be the largest since the Chinese Central Bank began holding regular bill auctions in the city in 2018. The move is aimed at reducing yuan liquidity in the market, increasing funding costs, and making short positions more expensive for traders. So far, the Central Bank has shown its resolve by stabilizing the yuan through daily fixings and promising not to allow excessive exchange rate fluctuations.
China’s annual inflation rate fell to 0.1% in December 2024 from 0.2% in the previous month, matching market estimates and marking the lowest since March. The latest results underscored the growing risks of deflation in the country despite government stimulus measures and the Central Bank’s supportive monetary policy.
