​ ​US

US equities continued the strong performance over the week, with the 3 major indices gaining 0.31-5.98% over the past 5 days ending Thursday. Corporate earnings reports remains mixed, but Meta led the way after beating revenue estimates and offering an optimistic outlook, driving gains in the tech indices. The US Fed raised interest rates by 25 bps during the week as markets expected. Fed President Jerome Powell said while ‘the disinflationary process has started’, more work is still needed in the fight against inflation, with the labour market being a point of concern. He further suggested that there might be more rate hikes down the road, and mentioned that rate cuts are not expected to take place within the year. Markets however are unmoved by his comments, at the time of writing, interest rate futures markets are pricing in Fed funds rate to fall to the 4-4.25% by the end of the year.

As for economic data, they have been mixed. The Conference Board Consumer Confidence Index was 107.1 in January, missing market expectations. JOLTs job openings in December of over 11 million beat market expectations, while ADP employment change of 106K in January missed expectations of 178K. Both initial and continuing jobless claims came in lower than expected, hinting at continued tightness in the labour market. Economic data releases in the US will be relatively light next week, there will be mortgage application figures alongside University of Michigan Sentiment Index for February, as well as the usual labour market data of initial and jobless claims figures.

 ​Europe

Similar to global markets, European equities gained on the back of improving outlook, the UK, French, and German indices gained 0.76-2.49% over the past 5 days ending Thursday. On Thursday, the ECB hiked rates for 50 bps to 2.5% as expected. Despite the recent cooler inflation data, as the Eurozone CPI fell further to 8.5% in January, the Bank said it would continue ‘raising interest rates significantly at a steady pace’, and intends to hike for another 50 bps in the March meeting. ECB President Christine Lagarde noted the resilience of the European economy, as preliminary Eurozone GDP grew 0.1% in 2022 Q4, avoiding recession. The BOE also hiked rates for 50 bps to 4% this week as widely expected. The Bank cited higher wage pressures as a concern, but believes that we are now past peak inflation. The Bank also projects that the UK economy has managed to grow in 2022 Q4, avoiding a technical recession, but the economy is still expected to remain stagnant with GDP growth projected to stay below 1% in the coming few years. Next week, Eurozone will release the December retail sales figures, Germany will release their December industrial production figures and the January CPI data, and the UK will also release their preliminary Q4 GDP.

​China

Contrary to the global market, both China and Hong Kong equities recorded losses this week, the CSI 300 index was down 0.95%, while the Hang Seng index lost 4.53%. The Chief Executive of Hong Kong John Lee announced that the Hong Kong-China border will fully reopen on Monday, removing quotas and testing requirements for cross-border movements. In an attempt to revive the economy, unvaccinated travelers can now enter the city, and authorities will be giving out over 500,000 airline tickets to attract visitors. Chinese economic data showed more recovery, all PMIs apart from the Caixin Manufacturing PMI, returned to the expansion zone above 50, and beat market expectations, although the Caixin Manufacturing PMI missed expectations and remained in the contraction zone at 49.2. It was reported that the US Secretary of State Antony Blinken would visit China on Sunday. Next week, China will release a slew of economic data for January, including new Yuan loans, money supply M2, and aggregate financing data, alongside CPI and PPI data.