January 3, 2025January 9, 2025 Weekly Global Markets Update The holiday truncated week saw the DXY index surged past 109 driven by US economic optimism and positioning for a stronger USD ahead of US president elect Donald Trump’s return to power. Most economists believe that a new Trump term will spur inflation and lead to more caution from the Fed on cutting interest rates and also expect Trump administration’s policies to negatively impact economic growth in the US, Eurozone and UK. In Asia, USDCNY broke 7.30 levels after trading in a narrow range for almost 10 consecutive sessions. Meanwhile, the People’s Bank of China (PBOC) said that an interest rate cut this year would likely be at an “appropriate time”. In addition, China will issue more ultra-long special treasury bonds in 2025 to promote the programs for large-scale equipment renewals and trade-in deals for consumer goods, further support major national strategies and build up security capacity in key areas, according to NDRC officials. Chinese equities found some support on the news. Crude oil also surged on China optimism. A shrank in US crude oil inventories over the last week provided support to oil prices as well. Currently, Brent futures are trading above $76/bbl levels. UST 10yr yield reversed from a weekly high of 4.63% (30th Dec) to a weekly low of 4.51% (31st Dec) but found some support and is near 4.59% levels. US ISM manufacturing PMI data (49.3 in Dec vs. 48.4 in Nov) revealed an unexpected upturn in manufacturing sector, which is bullish for the USD. Source: Institute for Supply Management (ISM) On the domestic front, the INR extended its decline this week led by strong USD bids, intermittent outflows, and CNY weakness. The pair touched a weekly high of 85.8087 (03rd Jan) and ended the week at 85.78 levels. Benchmark indices such as Nifty 50 and Sensex managed to end the week higher by 0.80% (w-o-w) and 0.67% (wow), whereas Nifty midcap 100 and Nifty small cap 100 indices was up 1.67% and 1.48% (w-o-w). In the next week (6th Jan to 10th Jan 2025), global services PMI, Germany inflation (p), EU inflation (f), EU consumer confidence (f) & sentiment surveys, and US jobs data are scheduled to be released which will provide further insights about the economic activity. Next Week Economic Calendar: Source: investing.com Economy Forex Interest Rate Market Update Economic calendarNDRCpbocTarrifsTrump