Rise and shine everyone.

In China, the CSRC announced measures to bolster A-shares, including increased investments from state-owned insurance companies and expanded liquidity tools. These initiatives aim to counter recent market weakness.

Japan awaits the BOJ decision today, with CPI data also due. The market is keenly awaiting forward guidance from the central bank. BoJ Futures are pricing in a 90% chance of a 25bps rate hike.

European indices displayed mixed performance, with the CAC 40 pausing after a recent rally. French business confidence dipped, impacting manufacturing sectors. The ECB is expected to maintain its easing stance. ECB members continue to discuss a steady stream of rate cuts for H1, which isn’t surprising given how economic growth is under pressure. We expect 4 rate cuts this year.

In the US, the dollar gained slightly ahead of Trump's Davos speech. Speculation regarding his tax policies is providing support to the dollar.

OpenAI is set to release “Operator,” an AI agent designed to automate complex web-based tasks, while also advancing toward AGI with a coding agent modeled after senior software engineers to outperform humans in economically valuable work. CEO Sam Altman plans a closed-door briefing with U.S. officials on January 30th, as OpenAI trains a successor to GPT-4, promising a significant leap in AI capabilities.

In the UK, BRC consumer confidence fell, and gilt yields declined slightly despite reassurances from the Chancellor.

Chart of the Day

JPM chart from 22 Jan 2025 shows retail buying sentiment reaches another high.

What we’re watching

• BoJ Rate Decision early morning Asia (late night US)

• President Trump’s Speech at WEF via video link at 5 pm Davos time (11am ET)

Calendars

(news taken from Reuters, FT, Bloomberg; Calendar from Trading Economics)