Apart from the macroeconomic releases, it pays to have a look at the bigger picture that gives the bird’s eye view. For sure, one could attribute the latest decreased performance of the Japanese economy (4Q19 GDP growth was negative) to the increased consumption tax, but he would get a distorted reality if he does not consider the two typhoons that hit Japan. The current Wuhan virus outbreak, is an issue that needs to be considered, and its implications to tourism revenues (see the recent NZD weakness).
Judging from Kristalina Gerorgieva’s (Chairwoman of the IMF) remarks in Davos, the global economy is in a better place than it was on October 2019, macroeconomically wise. Yet, market participants’ optimism is fueled from expectations, and possible EU-USA and UK-USA trade deals are currently not enough of a perspective, to ground on the next risk-on wave.
Today, Leo Varadkar, the Irish Prime Minister, is meeting with the EU’s Brexit negotiators. Remember that Leo’s meeting with Boris Johnson on 10 October 2019, was the one that broke the Gordian tie and sent GBP higher until the UK elections on 12 December 2019.
Impeachment proceedings in the USA are continuing. We do not intend to follow though, as long as the result at the Republican controlled Senate is predetermined, and as long as the whole thing ends soon and thus have a low effect on November’s elections.
Macro releases: The weekly celebrations of the Lunar Year begin today in China. Friday’s manufacturing PMI numbers were bottoming up. Today’s economic calendar does not have anything worth noting.
Today’s Recap is dedicated to the memory of Kobe Bryant that died in a helicopter crash in California.
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