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The U.S. gets a new president, Yellen repeats her 'gradual' message, and China's GDP growth accelerates. Here are some of the things people in markets are talking about today.
The president-elect of the United States will become the 45th president in a ceremony today in Washington. Press Secretary Sean Spicer said that Donald Trump would act on promises to withdraw from the Trans-Pacific Partnership trade deal and renegotiate NAFTA very shortly after his inauguration.
Yellen repeats message
Federal Reserve Chair Janet Yellen again backed gradual rate hikes in her second speech in two days, saying the central bank can't afford to let the economy run hot. While the path for U.S. monetary policy seems as certain as it can be, the path for fiscal policy is much less so. Yesterday in Washington, U.S. Treasury Secretary-nominee Steven Mnuchin endorsed a strong U.S. dollar in the long run, while bemoaning the currency's present strength. With anticipation of a Trump stimulus spurring the recent rally in the greenback, fiscal policy looks set to become the key driver of exchange rates.
New data show growth in the Chinese economy accelerated for the first time in two years, rising to 6.8 percent in the three months through December. Retail sales were the main driver of the increase, with industrial production coming in slightly below expectations. In other good news for policy makers, it seems that capital controls are starting to pay off as yuan outflows plummeted in December.
Overnight, the MSCI AC Asia Pacific Index gained 0.1 percent while Japan's Topix index closed 0.4 percent higher ,despite a strengthening yen. Europe's Stoxx 600 Index added 0.1 percent by 5:39 a.m. ET in quiet trading ahead of today's inauguration. S&P 500 futures increased 0.2 percent.
The last day of a World Economic Forum meeting in Davos that has been dominated (if not attended) by Donald Trump is underway. Yesterday's highlights included an interview with U.K. Prime Minister Theresa May, in which she offered her strongest support yet for London's financial center.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Soros says markets to slump with Trump, EU faces disintegration.
- U.K. retail sales fell 1.9 percent in December, the fastest pace in almost five years.
- No politicians have managed to get the better of Putin.
- The green bond giant wakes up.
- Bank executives in Davos say London clearing is probably safe.
- JPMorgan boosts Dimon's annual pay to $28 million.
- President Obama did look at minting the coin.