High Hopes, Solid Grounds

Economic

Summary:

We believe the macroeconomic outlook for the U.S. in 2025 is solid and promising. Analysts project a GDP growth rate of around 2.4%, driven by a combination of strong consumer spending, robust private sector balance sheets, and a historically strong labor market. The Federal Reserve is expected to continue its easing cycle, with interest rate cuts likely to support economic expansion.

Inflation is anticipated to remain within manageable levels, with core PCE inflation projected to slow to 2.2% by late 2025. This easing of inflationary pressures will allow the Federal Reserve to maintain accommodative monetary policies, further bolstering economic growth.

With regards to the stock market, 2024 showcased remarkable performance, with the S&P 500 surging by approximately 28% year-to-date, which would mark its best annual performance since 2019. This strong performance was driven by a combination of factors, including robust corporate earnings, lower inflation rates, and a series of interest rate cuts by the Federal Reserve. The post-election rally further boosted investor confidence, leading to record highs and significant gains across various sectors.

Looking ahead to 2025, the tech cycle remains a central theme. The continued advancement in artificial intelligence (AI) and other innovative technologies is expected to drive further growth in the tech sector. Additionally, expectations are high for more than 12% earnings growth next year, fueled by strong IT capital expenditure and technological innovation.

Geopolitical risks loom large in 2025, with tensions in regions like the Middle East and Asia potentially disrupting global supply chains and impacting investor sentiment. These uncertainties could lead to increased costs for the U.S. defense budget, as the government seeks to bolster national security and respond to international threats. The Department of Defense has already proposed a $849.8 billion budget for 2025, reflecting the need to address these geopolitical challenges.

European economies are still stuck in the mud – fiscal consolidation remains a focus and a potential drag on growth, while political instability in France and Germany is ongoing. The fiscal outlook in China is improving, but domestic consumption continues to face headwinds.

Overall, we maintained a preference for equities over fixed income on the basis that the macroeconomic backdrop will remain supportive. Within equities, TAA continues to prefer the U.S. versus other regions given a better economic backdrop, healthier corporate fundamentals, and lower net downside risk from policies floated by the incoming U.S. Administration. Within fixed income, the committee believes high yield remains attractive given its starting yield of ~7% and an expectation of low defaults.

UNEXPECTED, YET FREQUENT: STOCK MARKET SURGES NEARLY 30%

Strong U.S. stock market performance was not expected in 2024, but it fell in line with historical data.

Interest Rates

We're remiss to bring up the debt ceiling this time of year, but, like it or not, the debt ceiling comes back into force when we turn the calendar into 2025. However, the political makeup of Washington next year should take the extreme tail-risk of a technical default on U.S. Treasury securities off the table. We'll leave fiscal policy and deficits aside for the time being to say we're thankful to not stress about "x-dates" this holiday season.

That's not to say there won't still be some impact on money markets in the early stages of 2025. While it's unlikely Congress will fail to find a resolution to the debt ceiling, it's also unlikely it will be their top priority after being seated, likely resulting in disruptions to Treasury Bill issuance patterns in the first half of 2025. The Treasury Department will have to abide by the debt ceiling until its resolved, resulting in less T-Bill issuance than otherwise expected, and downward pressure on money market rates all else equal. While we view this as likely to impact T-Bill yields in the short term more than money market fund yields, it's a relatively small disruption compared to a full-fledged debt-ceiling episode.

DECEMBER DEBT CEILING UPDATE

Less T-Bill issuance may result in downward pressure on rates.

The debt ceiling comes back into force in January.

While technical default appears to be off the table, we do expect lumpy, reduced Treasury Bill issuance in the first half.

We wouldn’t be too concerned about debt ceiling headlines as we head into 2025.

Credit Markets

The high yield (HY) market saw strong outperformance last month following the U.S. elections. Market participants interpreted the “red sweep” as a positive backdrop, leading high yield spreads to grind tighter. While HY spreads remain historically tight, it’s worth noting that there have been multiple instances where the HY bond index trades at tight levels for extended periods of time. Despite the strong returns recently, January has proven to provide outsized returns. January’s average HY bond return over the past 38 years of +1.55% exceeds the average for all other months by 97 basis points (bps). Since 1987, high yield returns have been positive 84% of the time in January. While January is typically the best calendar month for HY, the 30-day stretch from mid-December to mid-January have provided even better returns on average, +1.93%, or more than four times a typical 30-day stretch.1

There are always exceptions to the “January Effect”, like in January 2022 where high yield saw a loss of -2.77%, which was the second worst January on record. This loss was driven by the Fed’s hawkish narrative, however heading into the new year, that narrative has flipped which could lead to January looking like past history.

HIGH YIELD JANUARY EFFECT

January has proven to provide historically outsized returns.

While high yield spreads remain historically tight, it’s worth noting that there have been multiple instances where the high yield bond index traded at tight levels for extended periods of time.

January’s average HY bond return over the past 38 years of +1.55% exceeds the average for all other months by 97 basis points. Since 1987, high yield returns have been positive 84% of the time in January.

We continue to think high yield is attractive.

EQUITIES

Since the U.S. elections on November 5th, U.S. large caps have rallied 4.9% through December 10th. Excluding Nvidia, all Mag-7 stocks were solid and contributed a majority of the returns over this period. U.S. small caps fared only modestly better at 5.3% despite initial optimism on Trump-related themes surrounding deregulation and reshoring. Developed ex-U.S. and Emerging Markets have also performed well, delivering double-digit local currency returns in each of the last two years. However, a stronger dollar in 2024 has reduced returns for dollar based investors by 4.6% and 5.7%, respectively.

Barring a December sell-off, U.S. large caps will post their second consecutive year of at least 25% returns, stretching the 1-year forward price-to-earnings ratio to 24x. However, expected double-digit earnings growth over the next two years, a healthy consumer, and continuing expectations for interest rate cuts provide support for our continued preference for U.S. equities. Valuations overseas are in line with historical averages and look cheap relative to the U.S., but growth catalysts are lacking, particularly in parts of Europe. We maintain an underweight to Developed ex-U.S. and a slight overweight to Emerging Markets.

U.S. ON TOP, BUT OTHER REGIONS WERE SOLID

Returns to U.S. investors impacted by stronger dollar.

The second consecutive year of at least 25% U.S. large cap equity gains casts a shadow over solid double-digit local currency returns from other regions.

Valuations appear stretched in the U.S., but we feel they are justified given the earnings growth outlook.

We reaffirm our constructive view on equities, maintaining overweights to the U.S. and, to a lesser degree, emerging markets. We remain underweight developed ex-U.S. equities.

REAL ASSETS

Over the past decade, the global demand for power has continued to surge. First came the growth of the “cloud”, driven by the largest hyperscalers in the world. These users have driven data center growth and capital expenditure spending since 2016. Today’s generative AI needs represent a game changer for the utility and power-generation sectors. AI revenue is expected to grow at an average annual rate of 38% over the next 6-7 years (Structure Research, Company Filings). The launch of Chat GPT has catalyzed OpenAI revenue growth. Within 60 days of launching, ChatGPT eclipsed 100 mm users, and 20 months later they have scaled from $0 to $3.6 B of recurring revenue (ChatGPT, New York Times). With many end-users looking for large scale campuses four times the size of the last generation just three years ago, healthy power and data center demand is expected to continue.

Per CBRE, utility and power-producer earnings growth estimates could reach high single-digits over the next two years. With the contributions of strong fundamentals and earnings growth, robust income yields and discounted valuations, we are optimistic on the infrastructure sector heading into 2025.

AI SURGE

Infrastructure growth is accelerating with AI.

Driven by AI requirements, expectations for global power demand continue to rise.

Utility and power-producer earnings growth estimates may reach high single-digits over the next two years.

We remain overweight global listed infrastructure on strong fundamentals, robust earnings growth, and discounted valuations.

Source：Northerntrust

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Glendon

Economic

In the vast and interconnected world of finance, benchmarks are crucial for evaluating market performance. One of the most significant benchmarks in the global investment landscape is the MSCI World Index. This index serves as a barometer for global equity markets and provides traders and investors with valuable insights into market trends, risks, and opportunities.

In this article, we’ll explore why the MSCI World Index matters and how it impacts the decisions of traders and investors worldwide.

What Is the MSCI World Index?

The MSCI World Index is a stock market index developed by MSCI Inc., a leading provider of investment tools and benchmarks. It tracks the performance of large- and mid-cap equities across 23 developed markets. Representing over 1,500 stocks, the index is often used as a benchmark for global equity performance.

The MSCI World Index is weighted by market capitalization, meaning companies with larger market values have a more significant influence on its performance. Some of the major countries included in the index are the United States, Japan, Germany, the United Kingdom, and Canada.

Why the MSCI World Index Matters

1. A Barometer for Global Equity Markets

The MSCI World Index provides a comprehensive view of global stock market performance. By tracking the index, traders and investors can gauge the overall health of developed equity markets. It reflects economic trends, geopolitical developments, and shifts in investor sentiment on a global scale.

2. A Benchmark for Investment Performance

Institutional investors, such as mutual funds, hedge funds, and pension funds, often use the MSCI World Index as a benchmark to measure their performance. If a fund’s returns align with or exceed the index, it is considered successful. This benchmark provides a point of reference for portfolio managers to assess their strategies.

3. Diversification Insights

For individual investors and portfolio managers, the MSCI World Index highlights the importance of diversification. It shows the potential benefits of spreading investments across various sectors and regions, reducing the risk of overexposure to a single market or industry.

4. A Tool for Global Asset Allocation

The MSCI World Index serves as a guide for asset allocation. By analyzing the index's composition, investors can identify which regions or sectors are outperforming and adjust their portfolios accordingly. This is particularly useful for traders looking to optimize returns while managing risks.

5. Predictive Market Trends

The performance of the MSCI World Index often correlates with broader economic trends. For example, an upward trend in the index may indicate global economic growth, while a decline could signal potential challenges. Traders and investors use this data to make informed decisions about market entry and exit points.

Limitations of the MSCI World Index

While the MSCI World Index is a valuable tool, it’s essential to understand its limitations:

Exclusion of Emerging Markets

The index focuses solely on developed markets, excluding emerging economies that may offer high-growth opportunities. For a broader perspective, investors may consider the MSCI All Country World Index (ACWI), which includes emerging markets.

Overrepresentation of the U.S. Market

Due to its market capitalization weighting, the MSCI World Index is heavily influenced by U.S. stocks. This can skew performance indicators, making it less reflective of other regions.

Currency Fluctuations

As the index includes equities from multiple countries, currency exchange rate fluctuations can impact returns for investors using different base currencies.

How Traders and Investors Use the MSCI World Index

Passive Investing:

Exchange-traded funds (ETFs) that track the MSCI World Index allow investors to gain exposure to a diversified portfolio of global stocks.

Active Strategies:

Traders use the index as a reference to identify market trends and capitalize on short-term opportunities.

Risk Management:

The index provides insights into market risks, helping investors adjust their portfolios during periods of volatility.

Final Thoughts

The MSCI World Index is more than just a benchmark; it’s a window into the global economy. For traders and investors, understanding its significance can lead to better decision-making and improved portfolio performance. Whether you’re a passive investor seeking diversification or an active trader looking to spot trends, the MSCI World Index is a vital tool in the financial world.

By keeping a close eye on this index, you can navigate the complexities of global markets and position yourself for long-term success.

To stay updated on all economic events of today, please check out our Economic calendar

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Glendon

Economic

Canada’s economy is often regarded as one of the most resilient and diversified economies in the world. With a robust natural resources sector, a dynamic service industry, and strong international trade relationships, Canada continues to hold a prominent place in the global economy. But what exactly makes Canada’s economy so unique? In this article, we’ll explore the key factors that shape Canada's economy, from its rich resources to its progressive policies, and how these elements come together to create a stable and growing economy.

Natural Resources and Energy Sector

One of the most defining features of Canada’s economy is its abundance of natural resources. From vast forests and freshwater lakes to rich deposits of oil, gas, minerals, and metals, Canada is blessed with an abundance of natural wealth.

The Canadian oil sands, located primarily in Alberta, are among the largest reserves of crude oil in the world, and oil exports remain a key driver of Canada’s economy. In addition to oil and gas, Canada is also a significant exporter of minerals, including gold, copper, and potash, and is one of the world’s largest producers of timber and wood products.

This rich natural resource base has made Canada a key player in the global energy market and has spurred the growth of industries related to energy extraction, transportation, and refining. The reliance on natural resources, however, also means that Canada’s economy is somewhat dependent on global commodity prices, which can fluctuate due to geopolitical events or shifts in global demand.

Diverse and Growing Service Sector

In addition to its resource-rich economy, Canada has developed a diverse and growing service sector. This sector, which includes finance, healthcare, education, technology, and professional services, accounts for a large portion of Canada’s GDP.

Canada’s financial services industry is one of the most stable and well-regulated in the world, with Toronto serving as a global financial hub. The country’s banking system is known for its resilience, especially during times of global financial crises. The highly skilled labor force, coupled with favorable policies, has also helped drive the growth of technology and innovation in Canada. Cities like Toronto, Vancouver, and Montreal are home to thriving tech hubs that attract investment from around the world.

Canada’s healthcare and education sectors are also key contributors to the country’s economic growth. With a world-class healthcare system and a highly educated population, Canada is well-positioned to continue its economic growth in the years to come.

Trade Relationships and Global Integration

Canada’s economy is deeply integrated into the global market, with international trade playing a vital role in its growth and prosperity. As one of the world’s largest trading nations, Canada maintains strong trade relationships with its neighbors and partners around the world.

The United States is by far Canada’s largest trading partner, with both countries enjoying a robust trade relationship under agreements like the United States-Mexico-Canada Agreement (USMCA). This close economic relationship benefits both nations, particularly in industries such as automotive manufacturing, agriculture, and technology.

In addition to the U.S., Canada has built strong trade relationships with countries in Europe, Asia, and Latin America. For example, Canada’s free trade agreement with the European Union (CETA) has opened up new opportunities for Canadian businesses to expand into European markets. The country’s increasing engagement with Asian markets, particularly China and Japan, further highlights Canada’s global trade footprint.

Inclusive and Stable Government Policies

Canada’s political stability, transparent governance, and inclusive policies are also critical elements that contribute to the country’s unique economic environment. The Canadian government is known for its commitment to promoting social welfare, reducing poverty, and fostering an inclusive economy. This is reflected in policies that encourage labor force participation, support for innovation, and a strong social safety net.

Canada has also made strides in promoting sustainability, with policies aimed at reducing greenhouse gas emissions, protecting natural habitats, and transitioning to renewable energy sources. These forward-thinking policies ensure that Canada remains competitive while addressing key global challenges such as climate change and sustainability.

Immigration and Labor Force

Another distinctive characteristic of Canada’s economy is its immigration policies. Canada is known for its open and inclusive immigration policies, which have helped diversify the country’s labor force and strengthen its economy.

Immigration has played a key role in boosting Canada’s population and labor market. Skilled workers from around the world are drawn to Canada’s high quality of life, strong economy, and welcoming attitude toward immigrants. This influx of talent has helped fuel innovation and creativity in sectors ranging from technology and healthcare to business and engineering.

Conclusion: A Unique and Resilient Economy

Canada’s economy stands out due to its diverse and resource-rich landscape, its strong financial and service sectors, and its commitment to inclusive and sustainable policies. As a global leader in trade, innovation, and resource extraction, Canada is well-positioned to continue thriving in an ever-changing global economy. Whether it’s the strength of its natural resources, the dynamism of its technology sector, or its stable political environment, Canada’s unique economic makeup allows it to adapt to global challenges while maintaining long-term growth and prosperity.

As Canada moves forward, its focus on diversifying its economy and expanding its international trade relationships will ensure that it remains a key player in the global economic landscape.

To stay updated on all economic events of today, please check out our Economic calendar

Risk Warnings and Disclaimers

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Justin

Economic

The global economy will underwhelm in 2025. Policy-makers may be satisfied with global growth rates around 3%. But they are failing to address fundamental challenges and the global economy is muddling along, a far cry from the 4% and higher average rates in past decades. US President-elect Donald Trump’s trade policies could deal a rude shock to the outlook. Meanwhile, the termites keep feasting away at the global economic foundations.

US growth may ease over the year, but many forecasters still see growth around 2.25%. The irrepressible consumer will help avert a downturn, putting paid again to the hard landing crowd. US economic non-policy remains a mess.

Euro area growth should ‘numerically’ pick up but remain weak, especially in Germany, which may witness a dead cat bounce. However, PIGS (Portugal, Ireland, Greece and Spain) will fly.

Chinese policy-makers are shifting towards cautious monetary and fiscal stimulus, but won’t overcome the economy’s massive structural debt, housing, deflationary and confidence headwinds. In the spring, authorities will post a growth target perhaps of around 5% and they’ll hit it one way or another. India remains somewhat a bright spot.

Japan’s 2025 growth rate will bounce back, supported by wage gains and because 2024 gross domestic product was held down by a sharp first quarter contraction.

Latin American growth remains hampered by longstanding productivity and corruption problems, with Brazil’s financial woes intensifying and US-Mexican relations undermining confidence. Argentina may be the star!

Fragmentation and flailing multilateralism

The major economic strides of the last 80 years were facilitated by America’s hegemonic power and the security structure it offered within which to pursue the liberal order.

But America’s relative global weight has waned and the US turned somewhat inward. After the 2008 financial crisis, the G20 was touted as the premier forum for international economic co-operation. But it then floundered, riven by Russia’s brutality against Ukraine, poor performance in many emerging markets, Trump’s isolationism and bellicosity, and fraying US-China relations.

The US, Europe and Japan reconnected in a revitalised, cohesive G7 on issues such as financial sanctions, cybercrime, anti-money laundering and helping Ukraine against Russia. But that unity too is likely to fray as Trump 2.0 injects uncertainty and volatility.

Liberal trade and investment are under siege

The Joe Biden administration was little different than a revanchist Trump 1.0. Now, Trump 2.0 threatens 25% tariffs on Mexico and China – America’s two largest trading partners – while across the board tariffs of 10% to 20% would batter Europe and 60% China. If implemented, a massive hit to global growth will be delivered. Some suggest the tariff threats are merely a negotiating tactic for unspecified concessions. Who knows?

Protecting national security is essential. But much is simply protectionism. Is America truly afraid that Chinese solar panels and electric vehicles will undermine national security? Is a mothballed steel plant and lost jobs better than one owned by a firm from the country of a close ally that protects jobs?

Decoupling continues amid growing US-China tensions

Everybody in the US is a China hawk. The only question is how big the talons are. The US is possibly on the verge of banning TikTok, further cutting off less-than-advanced chips, adding more firms to the entity list, on top of tariffs.

President Xi Jinping will stand up to Trump and China will retaliate. US levers on China are not as strong as under Trump 1.0. But China is not doing itself any favours in the West’s eyes by embracing President Vladimir Putin, looking indifferently on Russia’s war against Ukraine and fomenting hostility in the South China Sea.

Europe remains weak and divided

Trump is dismissive of Europe, America’s staunchest ally. The French government remains stalemated. No matter who runs Germany, economic policy is hamstrung and the country’s growth model broken. Surprisingly, Italy is Europe’s island of stability in a stormy sea.

Skirmishing between European Union member states and Brussels will continue. A divided Europe disdainful of Trump 2.0 won’t formulate a coherent response.

Poor macroeconomic policy, squeezed real incomes undermine public trust

Inflation is down but productivity growth languishes, squeezing real incomes and bolstering insecurity and populism.

Public debt is high in the US, much of Europe, Japan and China. In the US, the fiscal trajectory is unsustainable. Trump is likely to boost deficits from the already absurdly high level of 7% of GDP, pushing up longer-term rates, hurting investment and causing market indigestion. Will bond vigilantes return?

European high-debt countries will seek to restrain deficits, and Germany won’t pursue major workarounds from its rigid debt brake. Structural reform will continue to flag as policy-makers are wary of political fallout from adjustment costs.

China has some fiscal space at the centre, but is cautious in using it, let alone helping consumers rather than overhauling its inefficient investment and export-led growth model.

At some point, the fiscal chickens and unwillingness to revamp growth models will come home to roost. Further real income squeezes are likely and huge bouts of market volatility may be a sign of more trouble.

The 2025 global economy will underwhelm. America’s relative economic and political weight is still strong, but waning. Across the world, political fragmentation, hits to globalisation, uncertainty, flailing multilateralism, poor economic policy and mediocre leadership will accelerate the weakening of the global fabric. There are many culprits, but the US is at the heart of this own goal.

Source:Mark Sobel

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Alex

Economic

The yen is slightly higher on Friday. In the European session, USD/JPY is trading at 157.89, down 0.12% on the day.

Japan’s household spending continues to decline

Japanese consumers are holding tight on the purse strings and that could spell tr0uble for Japan’s fragile economy. Annually, household spending declined by 0.4% in November, following a 1.3% decline in October and above the market estimate of -0.6%. This marked a fourth straight decrease. Spending was weak in most categories, with the exceptions of housing and education. Monthly, household spending rose 0.4%, well below the October gain of 2.9%, which was a 14-month high. The reading easily beat the market estimate of -0.9%.

The household spending report comes on the heels of the November wage growth report, which was mixed. Nominal wages jumped 3% but real wages, which are adjusted for inflation, came in at -0.3%, marking a fourth consecutive month of negative real wage growth.

US nonfarm payrolls expected to decelerate

The US wraps up the week with nonfarm payrolls for December. With inflation largely in check, the Federal Reserve is keeping a close eye on the health of the labor market as the Fed reduces interest rates. The labor market has been cooling slowly but not deteriorating too quickly and the Federal Reserve would like to keep it that way. Nonfarm payrolls are expected at 160 thousand, after a gain of 227 thousand in November.

The Federal Reserve minutes had little impact on the movement of the US dollar but were significant in reiterating that the Fed plans to go slow on rate cuts in 2025. The minutes raised concern about the upside risk of inflation due to Trump’s pledges to enact tariffs and respond to illegal immigration with mass deportations. The Fed can be expected to gradually cut rates, which likely means increments of 25 basis points.

USD/JPY Technical

USD/JPY is testing support at 158.04. Below, there is support at 157.69

There is resistance at 158.51 and 158.86

Source: ACTIONFOREX

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Alex

Economic

Germany recorded the highest number of company insolvencies since 2009 in the last quarter of last year, a study from the Halle Institute for Economic Research (IWH) showed on Thursday, reflecting high interest rates and increased prices.

The fourth quarter of 2024 saw 4,215 company insolvencies with almost 38,000 jobs affected, according to the study, a level unseen since the financial crisis in mid-2009.

Compared with the fourth quarter of 2023, the number of insolvencies at the end of last year rose by 36%, as calculated by IWH.

The institute attributes the negative development only partly to the current economic crisis and increases in the cost of energy and wages.

"Years of extremely low interest rates have prevented insolvencies, and during the pandemic, insolvencies have failed to materialize due to subsidies such as short-time work benefits," said Steffen Mueller, head of insolvencies research at IWH.

The rise in interest rates and the elimination of subsidies have triggered catch-up effects in insolvencies from 2022, Mueller said.

Across sectors, the highest growth in insolvencies was in the services sector, growing by 47% year-on-year, compared with 32% in the manufacturing sector.

Source: Theedgemarkets

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Justin

Central Bank

Even if the Bank of Japan were to raise its inflation forecast, the upgrade alone won't lead to an interest rate hike if it is driven by temporary factors such as the rising price of rice and higher import costs, said three sources familiar with the bank's thinking.

The BOJ could hike rates this month if the board is convinced that sustained, broad-based wage hikes will take hold, and keep inflation durably at its 2 per cent target, they said.

"Risks to inflation are skewed to the upside due partly to renewed yen falls," said one of the sources, a view echoed by another source.

"Wage momentum also appears to be strong," a third source said, adding the board may discuss revising up its inflation forecast for the fiscal year beginning in April.

The BOJ will likely debate whether to raise interest rates from the current 0.25 per cent at its policy meeting on Jan. 23-24. It will also issue fresh quarterly growth and price forecasts that serve as the basis for setting monetary policy.

Under current forecasts, the board expects core consumer inflation to hit 1.9 per cent for both fiscal 2025 and 2026. While the board has yet to discuss details of its forecasts, recent data and surveys have pointed to rising inflationary pressures.

The yen is currently hovering at 158 to the dollar, down from around 140 hit in September and near levels hit when the BOJ hiked rates in July last year.

Core inflation accelerated in November to 2.7 per cent as the weak yen pushed up import costs, adding to stubbornly high prices of rice.

Rising wages are adding to inflationary pressure, backing up the BOJ's argument that Japan is on track to sustainably achieve its 2 per cent inflation target - a prerequisite for further rate hikes.

Wage hikes are spreading to companies of all sizes and sectors, the BOJ said in a quarterly report on Thursday, signaling that conditions for a near-term rate hike were continuing to fall into place.

"The need to raise pay is more widely shared among small firms," Kazushige Kamiyama, the BOJ's Osaka branch manager, told a news briefing on Thursday. "We can expect solid wage gains this year."

While such optimism heightens the chance of a rate hike at the BOJ's January meeting, Governor Kazuo Ueda has flagged uncertainty over U.S. President-elect Donald Trump's policy as a reason to tread cautiously in pushing up borrowing costs.

If comments and policies announced after Trump's inauguration on Jan. 20 trigger volatile market moves, the BOJ could put off hiking rates again, some analysts say.

Markets are focusing on BOJ Deputy Governor Ryozo Himino's speech and news conference on Tuesday, for fresh hints on whether the bank could hike rates this month.

Source: Reuters

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High Hopes, Solid Grounds

UNEXPECTED, YET FREQUENT: STOCK MARKET SURGES NEARLY 30%

Interest Rates

DECEMBER DEBT CEILING UPDATE

Credit Markets

HIGH YIELD JANUARY EFFECT

EQUITIES

U.S. ON TOP, BUT OTHER REGIONS WERE SOLID

REAL ASSETS

AI SURGE

Source：Northerntrust﻿

Why the MSCI World Index Matters to Global Traders and Investors

What Is the MSCI World Index?

Why the MSCI World Index Matters

1. A Barometer for Global Equity Markets

2. A Benchmark for Investment Performance

3. Diversification Insights

4. A Tool for Global Asset Allocation

5. Predictive Market Trends

Limitations of the MSCI World Index

Exclusion of Emerging Markets

Overrepresentation of the U.S. Market

Currency Fluctuations

How Traders and Investors Use the MSCI World Index

Final Thoughts

What Makes Canada's Economy Unique

Natural Resources and Energy Sector

Diverse and Growing Service Sector

Trade Relationships and Global Integration

Inclusive and Stable Government Policies

Immigration and Labor Force

Conclusion: A Unique and Resilient Economy

Outlook 2025: Global Economy Will Underwhelm Amid Huge Uncertainty

Fragmentation and flailing multilateralism

Liberal trade and investment are under siege

Decoupling continues amid growing US-China tensions

Europe remains weak and divided

Source:Mark Sobel

Japan’s Household Spending Declines, Yen Edges Higher

Japan’s household spending continues to decline

US nonfarm payrolls expected to decelerate

Source: ACTIONFOREX

Germany Records Highest Company Insolvencies Since Financial Crisis

Source: Theedgemarkets

Rosy Wage Outlook, Weak yen Drawing BOJ Attention to Inflation Risks

Source: Reuters

Risk Disclosure

Source：Northerntrust