Donald Trump's assertion, "I have the best words," has echoed throughout the financial markets, signifying a substantial change in trading dynamics during his presidency. As market participants grapple with this shift, they are also keeping a close eye on various economic indicators across the globe. The Daily Baltic Dry Bulk Index—an important gauge of global shipping activity—was released at 08:00 UK time, providing key insights into the economic pulse.
In the United Kingdom, recent labor market data revealed a mixed landscape. Unemployment in the UK edged up to 4.4%, while payroll numbers fell by 47,000. Despite this rise, wage growth surged to a six-month high of 5.6%, indicating persistent inflationary pressures. This development may weigh heavily on the Bank of England's considerations regarding potential rate cuts, as they strive to balance growth and inflation.
Meanwhile, in Switzerland, the December Money Supply (M3) grew by 1.9% year-on-year, surpassing the previous figure of 1.8%. This slight increase underscores ongoing monetary expansion in the country. Across the continent, Russia announced plans to issue OFZ bonds on Wednesday, catching the attention of investors looking for yield in an uncertain global environment.
The UK 10-year Gilt opened at 4.66%, reflecting market sentiment following these economic updates. In Asia, Japan's top foreign exchange diplomat, Mimura, issued a stark warning about "disorderly" and "speculative" movements in the FX market, highlighting potential volatility in currency trading.
Commodity markets also experienced fluctuations. Gold prices rose by 0.5%, driven by safe-haven demand amid geopolitical uncertainties and inflation concerns. The DXY index, which measures the US dollar against a basket of major currencies, increased by 0.6%, indicating a stronger greenback.
Conversely, crude oil prices witnessed a downturn. Brent crude oil prices fell by 1.1%, while West Texas Intermediate (WTI) saw a more pronounced decline of 2.0%. These drops come amid concerns over global demand and supply dynamics. In the cryptocurrency arena, Bitcoin and Ethereum prices tumbled by 5.0% and 2.4%, respectively, reflecting ongoing volatility in digital assets.
Turning to North America, the Bank of Canada has made a significant move by lowering its interest rate by 175 basis points in 2024. This decision comes as the Canadian Dollar struggles against multi-year lows compared to the US Dollar, reflecting broader economic challenges.