The German Index set another high. The GDP of Malaysia and Singapore show steady growth

At the end of Thursday, the Dow Jones Index (US30) rose by 0.77%. The S&P 500 Index (US500) was up 1.04%. The Nasdaq Technology Index (US100) is up 1.43%. Stocks found support after Thursday’s release of the January Producer Price Index (PPI) report, which bodes well for the upcoming PCE Price Index report. The US PPI for January rose by 3.5% y/y, stronger than expectations of 3.3% y/y and the largest increase in nearly 2 years. January PPI excluding food and energy rose 3.6% y/y, stronger than expectations of 3.3% y/y. US weekly initial jobless claims fell by 7,000 to 213,000, indicating a stronger labor market than expected at 216,000. Lower bond yields also sparked a rally in microchip stocks, which helped boost the overall market.

The Canadian dollar strengthened above 1.43 per US dollar, hitting a near two-month high, as the Bank of Canada softened its dovish stance. The Bank of Canada’s latest meeting minutes highlighted concerns that lingering uncertainty over potential US tariffs, which are expected to affect business investment and spur inflation, caused policymakers to refrain from making interest rate estimates.

Equity markets in Europe were mostly up on Thursday. Germany’s DAX (DE40) rose by 2.09%, France’s CAC 40 (FR40) closed 1.52% higher, Spain’s IBEX 35 (ES35) added 0.19%, and the UK’s FTSE 100 (UK100) closed up 0.49%. The DAX Index rose sharply on Thursday, setting a new record, marking the fourth day of gains. Market sentiment remained upbeat amid strong corporate earnings and optimism about a possible end to the war in Ukraine, although caution remained on US trade policy. On the corporate front, Rheinmetall shares jumped more than 9% and led the index. Automakers also advanced strongly, with Volkswagen, BMW, Mercedes Benz, and Porsche adding between 4% and 6%. German technology conglomerate Siemens was also among the leaders, rising nearly 6% after reporting better-than-expected first-quarter earnings.

WTI crude oil prices settled at $71.3 a barrel on Friday amid rising fuel demand and a delay in US plans to impose tariffs. According to JPMorgan, global oil demand rose to 103.4 million barrels per day in February, up 1.4 million barrels per day from a year earlier. Crude oil could see a small gain this week, the first since mid-January.

The US natural gas (XNG/USD) prices climbed above $3.76/MMBtu, the highest in three weeks, thanks to higher LNG exports, lower output, and prognoses of colder weather. In addition, the EIA reported that US utilities withdrew 100 Bcf of natural gas from storage in the week ended February 7, bringing total inventories down to 2,297 Bcf, above the expected 92 Bcf.

Asian markets were mostly down yesterday. Japan’s Nikkei 225 (JP225) rose by 1.28%, China’s FTSE China A50 (CHA50) gained 0.47%, Hong Kong’s Hang Seng (HK50) climbed 0.20%, and Australia’s ASX 200 (AU200) was positive 0.05%.

The People’s Bank of China (PBOC) said in its fourth-quarter monetary policy implementation report that it will adjust policy at the right time to support the economy. The Central Bank recognized strengthening external factors, weak domestic demand, and various potential risks. To address these challenges, the Central Bank plans to use a full range of monetary policy tools, including interest rates and the bank reserve requirement ratio. It also emphasized that the scope and timing of policy measures will be adjusted depending on domestic and global economic conditions.

The New Zealand dollar rose to around US$0.569 on Friday, extending gains from the previous session, helped by a weaker US dollar after President Donald Trump delayed the imposition of significant duties. He said retaliatory tariffs would only take effect after the White House considers appropriate tariff levels for each country. Domestically, the RBNZ is expected to cut rates by 50 bps next week to 3.75%, with markets expecting another 75 bps cut this year.

Malaysia’s economy grew by 5% year-on-year in Q4 2024, beating initial estimates of 4.8% but slowing from an upwardly revised 5.4% in the previous quarter. This is the slowest growth in the past three quarters. Net trade made a positive contribution to GDP, with exports rising 8.5% and imports increasing 5.7%. On a seasonally adjusted quarterly basis, the economy contracted by 1.1%, the first contraction since Q4 2023, following a revised 1.8% growth in Q3. For the full year, Malaysia’s GDP grew by 5.1%.

Singapore’s economy grew 5% year-on-year in Q4 2024, slowing from 5.7% growth in Q3. For the full year, the economy grew by 4.4%, exceeding the 1.8% growth recorded in 2023.