European Indices: A Quiet Start to the Week – 20 Jan 2025

European markets opened little changed today:

• Eurostoxx 50: +0.1%
• Germany DAX: Flat
• France CAC 40: +0.1%
• UK FTSE: Flat
• Spain IBEX: +0.1%
• Italy FTSE MIB: Flat

With the US markets closed for Martin Luther King Day, and Trump’s inauguration as the 47th US President later today (17:00 GMT), market activity is expected to remain muted. US futures are similarly calm, with S&P 500 futures up just 0.1%.

China Leadership Shift at the PBOC

A Reuters report indicates that Zou Lan is set to be appointed as deputy governor of the People’s Bank of China (PBOC) as early as this week. This would make Zou the youngest to hold this position, having previously managed the Evergrande crisis in 2021 and served as director of the monetary policy department since 2019. Markets are watching this move closely for potential monetary policy impacts.

Economic Events of the Day

Today’s agenda is light with limited market-moving data:

• European session: Quiet, with no major releases.
• American session:
  • BoC Business Outlook Survey
  • New Zealand Services PMI

The focus will remain on Trump’s inauguration amid expectations for several executive orders on immigration, energy, and government hiring policies. Importantly, there’s no indication of tariffs being part of these announcements, signaling possible optimism for risk assets.

Notable Economic Data Updates

• Switzerland: December producer and import prices remained flat (0.0% m/m), down 0.9% y/y.
• Germany: December PPI fell -0.1% m/m (vs. expected 0.2%), driven by declines in energy prices.

Forex and Technical Updates

• EUR/USD: Trading near 1.0300 as options expiries anchor price action.
• AUD/USD: Bouncing from lows last seen in 2020 but remains below key resistance at 0.6245.
• NZD/USD: Sellers remain in control below key moving averages at 0.5612.

Key Takeaways for the Week

• Monday: Watch for the PBOC Loan Prime Rate (expected to remain at 3.10% for 1-year LPR).
• Tuesday: UK Employment Report and German ZEW are highlights.
• Friday: Bank of Japan policy decision alongside Japan’s CPI data.

With limited catalysts to start the week, markets are likely to focus on central bank actions and US political developments as drivers for risk sentiment. Stay cautious and monitor forex volatility around key announcements.

For detailed trade ideas, technical insights, or market strategies, feel free to reach out to the HUBFX team.