In the week gone by, global stock markets continued to grapple with volatility as Treasury yields climbed higher, reflecting a reassessment by investors regarding the Federal Reserve’s pace of monetary easing. In this blog, we’ll know in detail what happened last week (January 6, 2025 to January 10, 2025) all across the globe.
Uncertainty in the US Rate Cut Decision
Federal Reserve Chair Jerome Powell recently tempered expectations for further interest rate cuts in 2025, emphasizing that the central bank is in no hurry to adjust monetary policy. The Fed’s next meeting on interest rates is scheduled for January 28-29, 2025.
Minutes from the Fed’s last meeting revealed that policymakers anticipate continued moderation in inflation this year. However, they flagged concerns about potential stubborn inflationary pressures, partly attributed to uncertainty surrounding the policies of President-elect Donald Trump, who will assume office on January 20. Speculation persists about his stance on tariffs and protectionist measures.
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Europe and Germany Faced the Heat
In Europe, stock markets displayed mixed movements following the European Commission’s release of preliminary data indicating a decline in its economic sentiment indicator by 1.7 points across the EU and 1.9 points in the euro area for December. Both figures remain below their long-term averages.
Germany’s industrial orders unexpectedly fell in November, while German retail sales dropped by 0.6%, dashing hopes of a year-end boost from Black Friday and Cyber Monday promotions. Additionally, consumer confidence in both the EU and the eurozone weakened in December.
This followed inflation data earlier in the week that aligned with expectations, easing concerns about elevated consumer prices impacting interest rate cuts. The eurozone economy has narrowly avoided recession over the past year, and further interest rate cuts from the European Central Bank are anticipated in 2025.
Meanwhile, Japanese markets edged lower as inflation and interest rate concerns weighed on investor sentiment. The country’s consumer confidence index slipped to 36.2 in December from 36.4 in November, reflecting unexpected weakness in consumer sentiment.
India’s Lower GDP Growth Rate
On the domestic front, Indian markets experienced significant volatility driven by factors such as foreign institutional investor selloffs, a weakening rupee, subdued earnings forecasts, and concerns over India’s economic slowdown.
Uncertainty around President-elect Trump’s trade policies and the Fed’s interest rate decisions further dampened investor sentiment.
India’s GDP growth for the financial year 2024-25 is projected at 6.4%, marking a four-year low compared to the 8.2% growth recorded in FY 2023-24, according to MOSPI. This slowdown has raised concerns about potential credit rating downgrades, exacerbating the rupee’s decline and triggering foreign capital outflows.
Conclusion
Investors also remained cautious ahead of December quarter earnings, with markets expected to take cues from both domestic and global developments moving forward. So, open Demat account with SMC Global Securities and invest as per your investment objective and risk profile.
Reference:
SMC Global Securities’ Research Team
Author: All Content is verified by SMC Global Securities.
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- 20 Lac+ unique clients
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- Advance Technical Analysis
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