The UnitedStates: Mortgage rates are down 100 bps from the recent highs.
Canada: The BoC hiked rates by 25 bps and signaled a pause. The market doesn’t see any more rate increases in this cycle, with rate cuts kicking in later this year.
The Eurozone: Goldman no longer expects a recession in the Eurozone.
Asia – Pacific: Pantheon Macroeconomics expects the Bank of Korea to raise rates by another 25 bps. Rate cuts could begin around Q4 2023.
Energy: US natural gas futures dipped below $3.0/MMBtu.
Commodities: Political troubles in Peru have been a tailwind for both copper and silver.
Emerging Markets: EM local currency sovereign bonds, particularly in LatAm, significantly outperformed despite a strong dollar and rising global inflation.
Food for Thought: Lastly, here is the global GDP by country in 2022:
The UnitedStates: Here is the ratio of cyclical-to-defensive stocks versus the ISM manufacturing PMI.
Full-time workers’ real wage growth has turned positive.
The Eurozone: The composite PMI climbed above 50, signaling a return to growth.
Australia: Inflation remains hot, with the Q4 report surprising to the upside. The Aussie dollar and bond yields jumped on the report.
China: The reopening-driven economic rebound has been unusually quick.
Commodities: Uranium supply has been insufficient to meet annual reactor requirements. The deficit is expected to continue over the coming years, which could raise the price of uranium.
Equities: US equities have been the most effective hedge against inflation relative to other asset classes over any period between one and 20 years. According to Goldman, commodities have not been a good hedge, based on their risk/return profile in long-term portfolios.
Food for Thought: Here’s a look at the use of ChatGPT in the workplace.
The UnitedStates: The Conference Board’s index of leading indicators has never declined this much in six months without a recession (the index goes back to the late 1950s).
The Eurozone: Consumer confidence has been recovering from extreme lows.
Equities: Volatility traders are focused on the first few days of February.
One final bounce before the recession?
China: The World Economics SMI report shows slower declines in China’s business activity this month. Sales growth gained momentum.
Developers are looking to Beijing for financing support to restart construction.
Energy: US refined product exports hit a multi-year high.
Food for Thought: Lastly, here is the maximum speed limit in Europe (100 km = 62 miles):
The UnitedStates: Existing home sales were very weak in December, down 36% in 2022. This is the biggest annual decline in decades.
US gasoline prices are on track for their first monthly gain since last June.
The Eurozone: Dutch home price declines have accelerated.
Emerging Markets: EM total equity returns have significantly underperformed developed markets in the past decade, having significantly outperformed in the previous decade.
Commodities: Turkish central bank has been buying a lot of gold.
This map shows the global soybean trade, with much of it headed for China.
Energy: Russia sold a lot of oil in December (which will buy plenty of cheap North Korean artillery shells and rockets).
Equities: The market rewarded tech layoffs last week.
Food for Thought: Here’s a breakdown of the US federal budget.
The UnitedStates: Unemployment claims continue to signal tightness in the labor market. Initial applications for jobless benefits hit a multi-year low for this time of the year.
Housing starts registered their first annual decline since 2009.
Europe: European stocks had a strong start to the year as fund flows turned positive.
China: The housing market is primed for a bounce.
Credit: Default probabilities have been rising in some sectors.
Energy: US oil stockpiles continue to rise.
US natural gas is nearing $3/mmbtu.
Food for Thought: To end the week, here is the population of India’s states compared with different countries:
The UnitedStates: The first manufacturing report of the month was a disaster. The NY Fed’s regional factory activity index dipped to the 2008 lows.
Financial conditions continue to ease, frustrating Fed officials. This index is a Z-score tracking the overall level of financial stress in the U.S. money, bond, and equity markets to help assess the availability and cost of credit.
The Eurozone: Germany’s economic sentiment is rebounding rapidly.
Japan: The BoJ is not budging on yield control. Here is the market reaction.
Commodities: The rally in gold has been too fast relative to the dollar’s decline.
Equities: Financials dragged the Dow lower on Tuesday.
Global Developments: We have some home price indices and valuations.
Food for Thought: Lastly, here’s a look at the best and worst-performing hard commodities in 2022.