EXECUTIVE SUMMARY
- ISRAEL PM'S OFFICE CLAIMS HAMAS RENEGING ON GAZA DEAL POINTS
- BESSENT TO SAY DOLLAR’S GLOBAL STATUS IS CRITICAL TO US ECONOMY
- BOJ BOARD TO DISCUSS JAN HIKE, HOLD POSSIBLE
- UK ECONOMY SEES LACKLUSTRE POST-BUDGET BOUNCE
Figure 1: Contributions to monthly UK GDP growth
Source: ONS
NEWS
ISRAEL/MIDEAST (MNI): PM Claims Hamas Reneging on Gaza Deal Points, Cabinet Meeting Delayed
Times of Israel reporting comments attributed to the office of Israeli PM Benjamin Netanyahu claiming that Hamas is “reneging on the understandings and creating a last-minute crisis that is preventing an agreement,” with regards to the Gaza ceasefire-for-hostages deal announced on 15 Jan. The PM's office claims “The Israeli cabinet will not convene until the mediators notify Israel that Hamas has accepted all elements of the agreement.” The smaller security cabinet was due to meet to vote on the ceasefire deal, with the entire cabinet convening after that.
US (BBG): Bessent to Say Dollar’s Global Status Is Critical to US Economy
Maintaining the dollar as the world’s reserve asset is critical to US economic health and the nation’s future, Scott Bessent, Donald Trump’s nominee for Treasury secretary, will tell a Senate committee, according to prepared remarks. “We must secure supply chains that are vulnerable to strategic competitors, and we must carefully deploy sanctions as part of a whole-of-government approach to address our national security requirements,” Bessent plans to tell senators on the Finance Committee Thursday, according to a spokesman, who shared his prepared testimony.
UK (FT): UK House Prices and Property Sales to Rise in 2025, Estate Agents Say
UK estate agents expect house prices and property sales to rise in 2025 despite concerns over the impact of borrowing costs on mortgage holders, according to a closely watched survey released on Thursday. The Royal Institution of Chartered Surveyors said a net balance of 37 per cent of respondents expected sales to increase in the year ahead, and that estate agents’ outlook was “solidly positive”. The professional body’s survey measures the difference between the percentage of estate agents predicting rises and falls in home sales.
BOJ (MNI EXCLUSIVE): BOJ Board to Discuss Jan Hike, Hold Possible
MNI discusses next week's BOJ board decision. On MNI Policy MainWire now, for more details please contact sales@marketnews.com
BOJ (BBG): BOJ Is Said to See Good Chance of January Hike Barring US Shock
Bank of Japan officials see a good chance of an interest rate hike next week as long as the arrival of Donald Trump at the White House doesn’t trigger too many negative surprises, according to people familiar with the matter. BOJ officials acknowledge there’s a likelihood the rate will be raised from 0.25% at the end of its two-day meeting on Jan. 24, unless Trump ruffles markets or changes expectations about the global economy at the start of his presidency, the people said.
BOK (MNI): Board Holds at 3% Over Weaker Currency Concerns
Bank of Korea Governor Rhee Chang-yong on Thursday failed to offer a clear path for further easing, despite flagging additional cuts ahead, following the board's decision to hold the Base Rate at 3.0%. While downside risks to growth have intensified and the need for further adjustments to the Base Rate have risen, uncertainty over the economic outlook and the currency driven by the changing domestic political situation and economic policies in major countries made holding appropriate, Rhee noted.
MNI NBP PREVIEW - JANUARY 2025: Questioning Hawkish Guidance
The National Bank of Poland (NBP) is expected to stand pat on interest rates again in a well-telegraphed decision. The key puzzle for market participants and NBP watchers is the outlook for monetary policy beyond 1Q2025 in the light of a surprising hawkish pivot in Governor Adam Glapiński’s rhetoric. During his press conference in December, he pushed back his forecast for the timing of the start of the easing cycle. However, subsequent comments from several of his colleagues revealed a considerable degree of dissent.
DATA
UK DATA (MNI): UK Economy Sees Lacklustre Post-Budget Bounce
- UK NOV GDP 0.1% M/M, 0.0% 3M/3M, 1.0% 3M Y/Y
- UK NOV INDUSTRIAL PRODUCTION -0.4%M/M, -1.8% Y/Y
- UK NOV MANUFACTURING OUTPUT -0.3% M/M, -1.2% Y/Y
- UK NOV CONSTRUCTION OUTPUT 0.4% M/M, 0.2% 3M/3M, 0.2% Y/Y
- UK NOV INDEX OF SERVICES 0.1%M/M, 0% 3M/3M
- UK NOV TRADE BALANCE GBP-4.76BLN
UK GDP grew 0.1% in November, snapping a run of two consecutive months of contraction, with the upside driven largely by growth in the services sector, the Office for National Statistics said Thursday. However, the ONS estimated the economy saw no growth in the three months to November, compared with the three months to August 2024, underlining the challenges facing the government still attempting to get its growth agenda on track. “The economy continues to be broadly flat, having grown slightly in November following two small falls in the previous months," ONS Director of Economic Statistics Liz McKeown said.
GERMANY DATA (MNI): German CPI Contributions Rise Not Solely Based on Energy
- GERMANY FINAL DEC HICP 2.8% Y/Y, 0.7% M/M
German final December HICP was unrevised from the flash readings at 2.8% Y/Y (2.4% prior) and 0.7% M/M (-0.7% prior). The final reading of CPI was also unrevised on the yearly measure at 2.6% Y/Y (2.2% prior), while the sequential reading was upwardly revised by 0.1pp to 0.5% M/M, contrary to MNI's expectations based on state-level data (-0.2% prior). Core CPI printed at 3.3% Y/Y (also upwardly revised, 3.1% flash, 3.0% prior), the highest rate since March 2024.
ITALY DATA (MNI): December HICP Confirms Flash Estimates
- ITALY DEC FINAL HICP 0.1% M/M, 1.4% Y/Y
Italian December HICP inflation confirmed flash estimates at 1.4% Y/Y. Core HICP fell two tenths to 1.8% Y/Y (vs 2.0% prior), also confirming the flash reading. Unsurprisingly, revisions were limited across the major sub-components. Services inflation was 2.9% Y/Y (vs 3.2% prior), below 3% for the first time since April 2022. Services related to recreation including repairs and personal care drove the disinflation, with recreation and culture easing to 1.1% Y/Y (vs 2.4% prior) and restaurants and hotels to 2.9% Y/Y (vs 3.4% prior).
SWEDEN DATA (MNI): Small Uptick in Inflation Expectations Won't Concern Riksbank
There was a minor uptick in Swedish CPIF expectations in January, but long-term expectations remain very close to the 2% target. The Riksbank will continue to focus more on actual inflation outcomes, growth data and the krona in determining its monetary policy stance. Consensus leans towards a rate cut in January, even as Governor Thedeen struck a cautious tone in a speech yesterday.
NORWAY DATA (MNI): Industrial Confidence Ticks Higher, But Capacity Util Still Below LT Avg
The Norwegian industrial confidence indicator rose to 5.5 in Q4, up from 1.8 in Q3 and above the historical average of 2.9. Values above zero indicate that output is expected to grow in the forthcoming quarter. Statistics Norway notes that expectations are positive across all types of goods for Q1 2025, particularly amongst capital goods producers. The survey is unlikely to deter Norges Bank from holding rates next week, with the bank likely to continue signalling for a cut in March.
JAPAN DATA (MNI): Japan Dec CGPI Rises 3.8% Y/Y, Import Prices Up
- JAPAN DEC CORP GOODS PRICE INDEX +3.8% Y/Y; NOV REV +3.8%
- JAPAN DEC CORP GOODS PRICE INDEX +0.3% M/M; NOV UNREV +0.3%
Japan's corporate goods price index rose 3.8% y/y in December, unchanged from November’s revised 3.8%, while import price posted their first rise in four months, data released by the Bank of Japan showed on Thursday. The December index stayed at the highest level since June 2023 when it rose 4.5% boosted by higher agriculture, forestry and fishery products (+31.8% vs. +29.8%) and electric power, gas and water (+12.9% vs. +9.3%). The CGPI rose 0.3% m/m in December after rising 0.3% in November.
AUSTRALIA DATA (MNI): Australia Adds 56k Jobs, Unemployment at 4.0%
- AUSTRALIA DEC UNEMPLOYMENT RATE +4%
- AUSTRALIA DEC EMPLOYED PERSONS CHANGE 56.3K
- AUSTRALIA DEC F-T EMPLOYED PERSONS CHANGE -23.7K
- AUSTRALIA DEC LABOR PARTICIPATION RATE +67.1%
Australia’s unemployment rate rose 10 basis points to 4.0% over December, while the economy added 56,326 jobs, more than the 15,000 expected, data from the Australian Bureau of Statistics showed Thursday. “The number of employed people grew by 0.4% in December 2024, slightly higher than the average monthly rise of 0.3% during 2024,” noted Bjorn Jarvis, head of labour statistics at the ABS. “It was also higher than the average monthly population growth of 0.2% over the year.”
FOREX: Yen Outperforming as January BOJ Meeting Nears
- While G10 currencies trade mixed amid an unchanged Dollar index on Thursday, the focus remains firmly on the Japanese Yen and the significant market moves overnight. Assisting the prior session’s direction of travel, Bloomberg headlines crossed overnight, reiterating that the BoJ sees a good chance to hike rates next week absent a US shock.
- The report sends the strongest signal yet that the BoJ is preparing for a rate hike next week, bolstering the signals sent by BOJ Governor Ueda and Deputy Governor Himino earlier this week. The Japanese Yen rallied sharply during APAC hours, with USDJPY sinking from around 156.50 to a 155.21 low before recovering.
- While the latest move lower is considered technically corrective for now, the pair has traded through the 20-day EMA and the overnight extension narrowed the gap substantially to 154.90, the 50-day EMA.
- EURJPY (-0.45%) and GBPJPY (-0.77%) are notably pressuring the psychological pivots of 160.00 and 190.00 respectively, developing the bearish threats for both crosses.
- GBP is underperforming following the slightly weaker-than-expected UK activity data, which could marginally underpin growth concerns bolstering the Sterling bear trend. Cable briefly slipped back below 1.22, while EURGBP has advanced 0.3% to 0.8430 at typing. We highlight a bullish outlook for the cross, and see resistance at 0.8463 and 0.8494, the Aug 26 high.
- USDMXN stands out in emerging markets, rising 0.75% to 20.60 as the overnight equity gains and softer US CPI have been shrugged off. Focus turns to US retail sales, initial jobless claims and Treasury Secretary Nominee Scott Bessent faces his Senate confirmation hearing.
EGBS: Bund Futures Unwind a Portion of Yesterday’s Rally
Major EGB futures have moved off session lows, aided by the passing of this morning’s Spanish supply. Bund futures are -17 ticks at 131.29 though, unwinding a little of yesterday’s sharp UK/US-CPI induced rally.
- The technical trend in Bund futures remains bearish for now, but yesterday’s rally highlights a possible short-term reversal signal - a bullish engulfing candle.
- A continuation higher would open 132.66, the 20-day EMA. The bear trigger has been defined at 130.28, the Jan 14 low, and a break would resume the downtrend.
- German cash yields are up to 1bp higher today, with the curve lightly steepening.
- Most 10-year EGB spreads to Bunds are little changed, though SPGBs and PGBs slightly underperform. Today’s Bono/Obli auction was reasonably well digested, with the top of the E5.0-6.0bln target range sold.
- Books remain open for today’s 30-year E3bln WNG Irish syndication.
- The Eurozone trade balance exceeded expectations in November, while German and Italian December HICP confirmed flash estimates.
- The accounts of the ECB’s December decision are due at 1230GMT/1330CET.
GILTS: Curve Steeper, Yields Off Yesterday's Lows, Front End Outperforms
Gilts continue to trade below yesterday’s highs.
- Futures -9 at 90.92, range 90.75-91.07.
- The technical trend condition in the contract remains bearish, although yesterday’s notable rally increases risks to that trend.
- Yesterday’s high (91.27) protects the 20-day EMA (91.55).
- Initial support at yesterday’s low (89.68).
- Yields 1-4bp lower, front end outperforms.
- 2s10s and 5s30s continue to trade below recent cycle highs.
- Feedthrough from yesterday’s dovish comments from BoE’s Taylor and slightly softer-than-expected GDP data drive some the outperformance in the front end.
- Yesterday’s narrowing vs. Bunds extends a little further, spread 2bp tighter at ~215bp, on track for the lowest close of ’25 at current levels.
- BoE-dated OIS shows 58bp of cuts vs. 56bp early today.
- SONIA futures last flat to +4.5. H5 through Z5 have traded through yesterday’s highs.
- Retail sales data, due Friday, presents the only release of note on the UK calendar ahead of the weekend. That print shouldn’t have much impact on BoE policy.
EQUITIES: E-Mini S&P Remains Above 50-Day EMA Following Wednesday's Rally
A bull cycle in the Eurostoxx 50 futures contract remains intact and the latest pullback has proved to be corrective. Yesterday’s climb resulted in a breach of 5054.00, the Jan 8 high, to confirm a resumption of the uptrend. Today’s move higher reinforces current conditions. The focus is on a climb towards 5097.00, the Oct 14 high. On the downside, key short-term support has been defined at 4931.00, a break would be bearish. A bear threat in the S&P E-Minis contract remains present. However, yesterday’s gains resulted in a print above resistance at 5987.49, the 50-day EMA. The average marks an important short-term pivot level and a clear break of it would signal a possible reversal. This would open 6107.50, the Dec 26 high. Key short-term support has been defined at 5809.00, the Jan 13 low. A breach of this level would confirm a resumption of the downtrend.
- Japan's NIKKEI closed higher by 128.02 pts or +0.33% at 38572.6 and the TOPIX ended 2.5 pts lower or -0.09% at 2688.31.
- Elsewhere, in China the SHANGHAI closed higher by 8.915 pts or +0.28% at 3236.032 and the HANG SENG ended 236.82 pts higher or +1.23% at 19522.89.
- Across Europe, Germany's DAX trades higher by 18.54 pts or +0.09% at 20592.61, FTSE 100 higher by 59.49 pts or +0.72% at 8360.63, CAC 40 up 124.95 pts or +1.67% at 7599.54 and Euro Stoxx 50 up 55.3 pts or +1.1% at 5087.61.
- Dow Jones mini down 5 pts or -0.01% at 43460, S&P 500 mini up 9.75 pts or +0.16% at 5999.5, NASDAQ mini up 62.25 pts or +0.29% at 21464.25.
Time: 09:50 GMT
COMMODITIES: This Week's Gains Reinforce Bullish Trend Structure in WTI Futures
The trend structure in WTI futures remains bullish and Wednesday's rally reinforces current conditions. The recent strong impulsive rally has resulted in a breach of $76.41, the Oct 8 high. Note too that $80.14, the Apr 12 ‘24 high has been pierced, strengthening the bullish theme. Sights are on $81.69, a Fibonacci projection. On the downside, a reversal lower would expose the 20-day EMA, at $73.81, a key short-term support. Recent gains in Gold appear corrective - for now. However, the yellow metal continues to hold on to its latest gains and scope is seen for a continuation higher near-term. A stronger recovery would open $2726.2, the Dec 12 high and an important resistance. Clearance of this level would be a bullish development. On the downside, a reversal lower would expose $2583.6, the Dec 19 low. Initial support is at $2646.3, the 50-day EMA.
- WTI Crude down $0.13 or -0.16% at $79.92
- Natural Gas down $0.02 or -0.54% at $4.063
- Gold spot up $8.58 or +0.32% at $2704.98
- Copper up $4.5 or +1.03% at $443.4
- Silver up $0.21 or +0.69% at $30.8585
- Platinum up $5.79 or +0.61% at $948.26
Time: 09:50 GMT
| Date | GMT/Local | Impact | Country | Event |
| 16/01/2025 | 1230/1330 |  EU | Account of Dec 2024 ECB Monetary Policy Meeting | |
| 16/01/2025 | 1315/0815 | ** |  CA | CMHC Housing Starts |
| 16/01/2025 | 1330/0830 | *** |  US | Jobless Claims |
| 16/01/2025 | 1330/0830 | ** | US | WASDE Weekly Import/Export |
| 16/01/2025 | 1330/0830 | *** | US | Retail Sales |
| 16/01/2025 | 1330/0830 | ** | US | Import/Export Price Index |
| 16/01/2025 | 1330/0830 | ** | US | Philadelphia Fed Manufacturing Index |
| 16/01/2025 | 1500/1000 | * | US | Business Inventories |
| 16/01/2025 | 1500/1000 | ** | US | NAHB Home Builder Index |
| 16/01/2025 | 1530/1030 | ** | US | Natural Gas Stocks |
| 16/01/2025 | 1630/1130 | ** | US | US Bill 04 Week Treasury Auction Result |
| 16/01/2025 | 1630/1130 | * | US | US Bill 08 Week Treasury Auction Result |
| 16/01/2025 | 1730/1230 | CA | BOC Deputy Gravelle speech to women in markets group. | |
| 17/01/2025 | 0200/1000 | *** |  CN | Fixed-Asset Investment |
| 17/01/2025 | 0200/1000 | *** | CN | Retail Sales |
| 17/01/2025 | 0200/1000 | *** | CN | Industrial Output |
| 17/01/2025 | 0200/1000 | *** | CN | GDP |
| 17/01/2025 | 0200/1000 | ** | CN | Surveyed Unemployment Rate M/M |
| 17/01/2025 | 0700/0700 | *** |  GB | Retail Sales |
| 17/01/2025 | 0900/1000 | ** | EU | EZ Current Account |
| 17/01/2025 | 1000/1100 | *** | EU | HICP (f) |
| 17/01/2025 | 1100/1200 | EU | ECB's Cipollone lecture at Crypto Asset Lab conference | |
| 17/01/2025 | 1330/0830 | * | CA | International Canadian Transaction in Securities |
| 17/01/2025 | 1330/0830 | *** | US | Housing Starts |
| 17/01/2025 | 1415/0915 | *** | US | Industrial Production |
| 17/01/2025 | 1600/1100 | CA | BOC releases review of pandemic policy actions. | |
| 17/01/2025 | 2100/1600 | ** | US | TICS |