Bulgaria has moved one step closer to joining the eurozone by fulfilling the final criteria on inflation, marking a significant milestone in its economic journey. This development comes amid a backdrop of global economic activity, as European stock indices and cryptocurrencies show notable performance. Meanwhile, China has achieved its growth target for 2024, and the US markets prepare for a long weekend with Martin Luther King Day observance.
In December, Bulgaria experienced an uptick in retail sales, climbing from 3% to 3.7% year over year. This positive economic data is a boon for the nation as it navigates through a period characterized by caretaker and minority governments. The new centre-right Prime Minister, Zhelyazkov of Gerb, has made it clear that Bulgaria's Euro-Atlantic agenda remains a top priority, even as discussions about taking the Bulgarian Socialist Party (BSP) into the fold continue.
Elsewhere in Europe, stock indices have shown remarkable resilience and growth. The French CAC 40 surged by up to 2.15%, while the EuroStoxx 50 gained 1.5%, drawing close to surpassing its 2024 peak—a level not seen since the year 2000. This robust performance underscores the strength of European markets amid expectations of further rate cuts by the European Central Bank, which have placed some pressure on the euro.
In the cryptocurrency arena, Bitcoin's momentum continues unabated. Trading at over $100,900 on Friday, Bitcoin has rallied nearly 7% this week, spurring Ethereum and Ripple to follow suit after retesting key support levels earlier. These developments highlight the ongoing volatility and opportunities within digital currencies.
In contrast, the US Treasury market remained largely indifferent to these data points but continued its post-CPI repositioning rally. The US dollar faced challenges as it switched from small intraday gains to losses, partly due to an unexpected decline in UK retail sales for December, which created headwinds for the currency pair.
China's economic landscape presents a mixed picture. The nation successfully hit its growth target of "around 5%" for 2024, demonstrating resilience in a challenging environment. However, the property market continues to struggle, with monthly declines in home prices. The Chinese statistics bureau cautioned about growing external challenges and insufficient domestic demand.
“Must be aware that the adverse effects brought by external environment are increasing, the domestic demands are insufficient, some enterprises have difficulties in production and operation, and the economy is still facing difficulties and challenges.” – Chinese statistics bureau
As markets around the world navigate these dynamics, US markets will take a brief pause with closures on Monday in observance of Martin Luther King Day. Investors will likely use this time to reflect on current trends and anticipate future movements.