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China published its upwardly revised GDP estimate for 2021, at 8.4% instead of 8.1%. China has also stimulated positive market sentiment following the announcement of easing covid-linked restrictions, which will alleviate the negative impact of such restrictions on the economy. China Immigration Administration announced it would resume issuing visas for mainland citizens travelling abroad.
Tuesday’s Economic Data
According to the S&P CoreLogic Case-Shiller Home Price Index released on Tuesday, US home prices continued its downtrend in October for the fourth straight months. The US Dollar Index showed no immediate reaction to these figures and was last seen losing 0.05% on the day at 104.26.
Seasonally adjusted HPI Composite for 20 cities: -0.5% M/M vs. -1.2% consensus and -1.2% prior. HPI Composite for 20 cities, not seasonally adjusted: -0.8% M/M vs. and -1.5% prior.
Key Developments
On Tuesday, the dollar extended its decline, ending the trading session with modest losses against most major rival currencies. Easing US inflation according to last week’s latest data in addition to China’s news were able to boost the market sentiment after a longer than usual weekend.
San Francisco Fed’s Thomas M. Mertens, from the Economic Research Department, published a report, on Tuesday, on the central bank’s official website entitled “Recession Prediction on the Clock”. The report could be seen as a recession predictor based on macroeconomic data, particularly the jobless unemployment rate. This economic update was able to push the US dollar’s latest corrective bounce amid the holiday-thinned trading week. Mertens has claimed that this predictor is almost as accurate as the slope of the yield curve but is more accurate at shorter horizons.
Global stocks benefited from the speculation that China would focus on boosting growth and abandon the Covid-zero policy. Wall Street traded mixed, with the DJIA up, but the Nasdaq Composite shed roughly 100 points.
Russia’s Vladimir Putin signed a decree that bans the sale of Russian oil to countries that imposed the oil price cap. The said ban will come into force between February 1 to July 1.
The EUR/USD pair keeps hovering around 1.0650, while GBP/USD is down to 1.2025. The AUD/USD pair trades in the 0.6730 price zone, while USD/CAD hovers around 1.3520. Easing oil prices weighed on the CAD as the WTI trades at around $79.30 a barrel. Finally, USD/JPY ticked higher and trades at 133.35.
Gold peaked at a fresh 3-week high of $1,833.32 but eased towards its comfort zone at around $1,815 by the end of the day.
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