The Martin Luther King Day in the US as well as the inauguration of Donald Trump put most financial updates on hold yesterday, but market activity is expected to resume today.
The World Economic Forum (WEF) has kicked off, shining less than in previous years as several global leaders such as the US president Donald Trump, Chinese President Xi Jinping and India’s President Narendra Modi will be absent.
In other news, Bitcoin hit a record-high of $109,071 on Monday before retreating to lower levels. Several cryptocurrencies have surged in the last few days as Trump has promised changes to related policies.
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Canada CPI Inflation Likely To Slow Down
The Bank of Canada (BoC) and Statistics Canada will release their CPI inflation reports for the month of December. Economists suggest that CPI inflation fell to 1.7%, on an annualised basis, in December from 1.9% in November. The BoC inflation target ranges between 1% and 3%.
Analysts at RBC Bank suggest that inflation could have dropped more in December, reaching 1.5% on a yearly basis, while core inflation is forecast to have fallen to 1.7%. The RBC report, published on January 17th, said: “We expect the trim and median measures to hover around 2 ½ %, consistent with a softening economy that continues to weigh on domestic price pressures. We think inflation expectations likely continued to moderate, given readings have stayed near the central bank’s 2% target for four consecutive months.”
In the meantime, an internal BoC review said several factors contributed to runaway inflation in 2021 and 2022, including impacts related to the Covid-19 pandemic, the war in Ukraine, changes in consumer spending habits etc.
New Zealand CPI Q4 2024 Report
On Tuesday night, Statistics New Zealand will release the Q4 2024 CPI inflation report. Economists suggest that inflation could tick lower to 2.1% on a year-to-year basis while on a quarterly basis, they also expect a slight drop to 0.5%. The Reserve Bank of New Zealand (RBNZ) target band is between 1% – 3%.
Westpac’s analysts suggested that “New Zealand consumer prices rose by 0.5% in the December quarter. That’s slightly higher than we previously expected due to a sharp rise in international airfares in December. The annual inflation rate is expected to slip to 2.1% (down from 2.2% in the year to September). That would be the lowest annual inflation rate since 2021.”
Their report stressed that “the underlying trend in inflation is looking much better contained than it has in a long time, with measures of core inflation drifting back towards the 2% mid-point of the RBNZ’s target band.”
UK Pay Growth Still Strong In November
A survey by the Office for National Statistics (ONS) showed that average weekly earnings rose by 5.6% in the three months to November, rising from 5.2% recorded in the three months to October. The higher figure may press the Bank of England (BoE) to keep its monetary policy unchanged.
The same survey showed that UK unemployment rose to 4.4% in the three months to November, up from 4.3% in the three months to October with analysts suggesting that this shows a cooling jobs market.
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