Rises in Asia; China’s central bank left interest rates unchanged

Trade review: current reports, trends, indices, stock prices, bonds, foreign exchange and commodities and analyst recommendations

08:19

This morning (Monday) in Asia, the main indices are trading in a positive trend. The Shanghai Stock Exchange rises by 0.3%, the Hang Seng jumps by 2.4%, the Kospi index falls by 0.2% and the Shanghai Stock Exchange rises by 0.4%.

Today there will be no trading in the USA on the occasion of Martin Luther King Day.

Later today, Trump will be sworn in as president of the United States.

Violeta Todorova, a research analyst at the international investment company Leverage Shares, estimates that the beginning of Trump’s term will be manifested in a series of presidential orders that may increase market volatility:

“In his first days in office, Trump is expected to take aggressive steps in the form of presidential orders in the areas of trade, immigration and energy. Trump has pledged to impose tariffs of 25% on goods imported from Canada and Mexico, and it is possible Because there are also blanket tariffs on all imports to the USA. Markets may react to this with volatility, while businesses try to understand the implications of the move on inflation and sales. In the near term, Trump’s moves will generate big headlines, but their long-term impact depends on how they are implemented.”

From the published data it can be seen that the results of the elections in the USA caused sales of government bonds by different types of investors:

Alex Zebzinski, Chief Economist at the Meitav Investment House, notes that from the data published by the US Treasury Department, it emerged that in response to Trump’s election, foreign investors net sold government bonds in November, for the first time since 2021: “Extremely large net sales were made by investors from the Caribbean Islands, where funds are registered fencing In contrast, net purchases of American stocks by foreigners amounted to approximately 115 billion dollars, one of the strongest months in history.”

“The commercial banks in the US did not sell, but they stopped purchases of government bonds in the last months of 2024. According to the trend data, if it were not for the stop, they were supposed to purchase bonds in the amount of about 100-150 billion dollars. The foreign central banks that hold US government bonds in custodianship at the FED sold about $50-70 billion worth of government bonds in the last two months of 2024.

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Todorova from Leverage Shares also refers to the report season for the last quarter of the year in the US and notes that it opened on the right foot, with strong reports from the investment banks, which exceeded early expectations and presented positive forecasts for the future. “The technology sector will be at the center of things, when the profits of the technology companies are expected to grow by 14.7% in the fourth quarter. It will also be important to monitor the effect of the dollar appreciation on the bottom line of the companies. In general, the S&P500 companies are expected to show an 11.7% increase in earnings, the most significant increase since the fourth quarter of 2021.”

In the commodity market, oil prices are slightly down this morning. The price of a barrel of Brent stands at 80.6 dollars and the price of a barrel of WTI trades around 77 dollars.

The price of Bitcoin is down about 2.5% this morning and is trading around $102,310.

In the macro sector, this morning (Monday), the Central Bank of China left the interest rate in the country unchanged in line with expectations.

Later this week, there will be an interest rate decision in Japan where the central bank is expected to raise the interest rate by 0.25%. The Purchasing Managers’ Index in the Eurozone and Germany. Also in the US, the purchasing managers’ indices will be published next week.