 As global markets return from the New Year holiday, trading remains subdued with light activity expected until next week when full operations resume. Today’s focus will be on Eurozone and UK PMI manufacturing finals alongside US jobless claims, while tomorrow’s US ISM Manufacturing Index could provide an early glimpse of potential volatility ahead. However, the broader tone for January—and likely much of 2025—will be set by a series of pivotal events and data releases in the coming weeks. The month’s significance stems from two major developments. First, key US non-farm payrolls and inflation data are on the radar, likely determining whether Fed will pause its policy easing cycle later this month. Following the Fed’s hawkish December rate cut, markets expect a significantly slower pace of reductions for 2025. Adding to market uncertainties (or maybe clarities) is Donald Trump’s inauguration on January 20. The incoming administration is expected to issue at least 25 executive orders immediately, targeting areas such as immigration, energy policy, and cryptocurrency regulation. Trump’s previously stated plans to impose tariffs on imports from China, Mexico, and Canada could introduce inflationary pressures by raising costs for companies and consumers. Markets will be on high alert for details of the policies and their implications for global trade outlook. The crypto markets' reaction in the coming days could give a sneak peak on how underlying risk sentiment is flaring back from holiday. Bitcoin's pull back from 108368 has started to slow after hitting 55 D EMA (now at 92441). Strong bounce from current level, followed by break of 99866 resistance will argue that Bitcoin has completed the correction, and larger record run up trend is ready to resume. However, sustained trading below the EMA will likely pave the way back to 38.2% retracement of 49008 to 108368 at 85962, or even below, as correction deepens first. In Asia, Japan was on holiday. Hong Kong HSI is down -2.40%. China Shanghai SSE is down -3.05%. Singapore Strait Times up 0.14%.
Happy new year, and wish you a prosperous and healthy 2025!
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