Date: 13th January 2025.

Global Market Update: Asian Stocks Fall, Pound Weakens,Oil Surges Amid Fed and Geopolitical Shifts.


Trading Leveraged Producys is Risky

Asia & European Sessions:

* Asian markets tumbled alongside European and US equity futures as investors scaled back expectations of near-term interest rate cuts by the Fed, following stronger-than-expected US payroll data.
*Bank of America has revised its outlook, no longer anticipating two 25 bps rate cuts this year and warning that the Fed’s next move could be a hike. Goldman Sachs also adjusted its forecast, expecting two rate cuts instead of three for 2025.
*Chinese equities also slid further despite data showing record exports for 2024, as concerns linger over potential higher US tariffs once President-elect Donald Trump takes office.
*The Pound extended its decline from last week, hitting a multi-month low.
*Oil prices surged to a 4-month high due to fresh US sanctions on Russia. These measures included restrictions on two major oil exporters, insurance companies, and over 150 oil tankers.
*China Intervenes to support the Yuan: China intensified its efforts to stabilize the yuan after the currency neared record lows in offshore trading. The People’s Bank of China, along with other regulators, vowed to strengthen oversight of the foreign exchange market, crack down on disruptive activities, and prevent further declines in the yuan.
*Geopolitical tension continues as Justin Trudeau stated that Canada is ready to respond with counter-tariffs against the US if President-elect Donald Trump follows through on his threat to begin a trade war in North America.

Canada is the largest buyer of US-made products, purchasing approximately $320 billion worth in the first 11 months of last year. He emphasized that Canada is the top export partner for 35 US states, and any trade restrictions would ultimately hurt American businesses and workers. Recalling the 2018 tariffs on steel and aluminum under the Trump administration, Trudeau pointed out that Canada had responded by imposing duties on various US goods, including appliances, bourbon whiskey, and boats. He reiterated that his government is ready to take similar action if necessary.



Financial Markets Performance:

*The USDIndex has inched up to 109.84, despite the fact that the Yen strengthened. EURUSD and cable remain under pressure.
*The Pound fell as much as 0.7% to $1.2126, marking its lowest level since November 2023, amid stagflation concerns and budget jitters. This extended a 1.7% drop from the previous week.
“A slowing economy and widening deficits in both the current account and fiscal balances are weighing on the pound,” said Christopher Wong, a currency strategist at Oversea-Chinese Banking Corp.

*Oil markets were in focus as UKOIL rose above $81 per barrel during Asian trading hours & USOIL to $77.55 driven by US sanctions targeting Russia’s energy sector.
*Gold is steady at $2686.

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Please note that times displayed based on local time zone and are from time of writing this report.

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Andria Pichidi
HFMarkets

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