Commodities: After trading below $30 a barrel, and print fresh new multi-year lows by flirting with the $26 barrel, WTI made a miraculous recovery to gain over 9% in the final two trading session of the week. Fundamentally nothing has really changed so the rally is assumed to be governed by short rallying.
Indices: Global stock indices continued to tumble yet managed to claw back losses to finish marginally higher on the week. We note that technically, several have produced potential bullish hammers on W1 after failing to break below the lower bollinger band. At the same time VIX and TED Spread (a measure of credit risk) have also show signs of tension being reduced to point towards a bounce higher for stocks over the coming week/s. However many do not expect indices to retest their highs any time soon, if at all.
United States: Inflation data remained subdued, with monthly inflation contracting 0.1% and core CPI up a mere 0.1%. Unemployment claims rose to its highest level since June '15 to suggest unemployment in the US may struggle to break below the 5% threshold in the foreseeable future.
Euro: ECB kept rates on hold but Mario Draghi strongly hinted of further stimulus in the March meeting. French and German manufacturing data fell short of expectations, with France printing 50 (compared with 51.6 expected). Services PMI also fell flat for the two economies which is in line with data from US and China recently.
China: Q4 GDP ticked lower to 6.8% and provided a bullish tone to the Asia session last week but, as such numbers are always treated with doubt, it was the daily FIX and oil prices which continued to dictate market sentiment. Industrial production also ticked lower to 5.9% and retail sales fell slightly short of 11.3% forecasted to expand 11.1% on the month.
Canada: BoC held interest rates at 0.5%, which was agianst the 25bp cut expected. The combination of a hawkish oitlook and rising il prices helped support Canadian Dollar and fend off the multi-year lows.
New Zealand: GDT prices declined -1.4% and inflation contracted 0.5% to send the Kiwi Dollar lower. However business confidence gained 15 following positive PMI and PSI data.
Weekly wrap: 25th Jan 2016
A summary of money flow and events from last week to help with the trading week ahead.