Stocks Rise; Dollar Weakens Versus Majors Peers

US stocks edged higher and benchmark Treasury note yields lingered at 10-month highs as investors mulled the prospects of the economic recovery and vaccine rollout. The S&P 500 rose by 0.04% to 3,801.19 while Dow Jones was up 60.00 points (0.19%) to 31,068.69.

US Small-business Optimism Slumps to Seven-month Low

US small-business optimism slumped in December to a seven-month low as Covid-19 infections spread at a record rate and governments tightened restrictions on activity. The National Federation of Independent Business index of sentiment decreased by 5.5 points to 95.9, the group said. As renewed lockdown measures continue to weigh on business activity, sales expectations dropped to minus 4%, the lowest since May.

ECB to Disregard Any Temporary Inflation Rises, Schnabel Says

The European Central Bank will disregard any temporary pickup in inflation this year caused by pent-up demand, according to Executive Board Member Isabel Schnabel. The eventual easing of restrictions aimed to stop the spread of Covid-19 could lead prices for things like trips or restaurant meals to “develop a certain dynamic,” the policy maker said.

Bank of England’s Broadbent says UK economy may be better than it looks

The UK economy could be stronger than output data suggest as consumers switched their spending in response to the pandemic, according to Bank of England Deputy Governor Ben Broadbent. The difficulty in responding to large and rapid shifts in demand may mean the impact on inflation may also have been softened, he said. However, he said the anticipated steep rise in unemployment when government furlough programs wind down indicates that the central bank’s policy response was appropriate.

South Korea’s Jobless Rate Hits 10-year High as Virus Surges

South Korea’s jobless rate hit a 10-year high in December as the country’s worst coronavirus outbreak forced businesses to slash hiring. The unemployment rate jumped to 4.6% last month, the highest since January 2010, the statistical office reported.

India’s Inflation Slows to 15-month Low Before RBI Rate Decision

India’s consumer price inflation cooled to a 15-month low in December, boosting the case for the central bank to resume interest rate cuts to support the economy. Consumer prices rose 4.59% last month from a year earlier, data released by the Ministry of Statistics showed. It is also the first time price-growth has returned within the Reserve Bank of India’s 2%-6% target band in nine months.

Thailand Unveils US$7 Billion Stimulus to Counter Virus Impact

Thailand unveiled stimulus programs including cash handouts worth 210bn baht (US$7bn) to support millions of individuals and businesses affected by the country’s biggest wave of coronavirus infections since the pandemic began a year ago. The government plans to distribute cash to about 30 million people, mostly informal sector workers and farmers, who are hit by curbs on businesses and mobility, according to secretary general of the National Economic and Social Development Council.

Oil Extends Gains on Expectations for Shrinking US Supplies

Oil advanced after settling at a fresh 10-month high, with an industry report showing US crude inventories fell by more than expected. Brent crude for March settlement gain US$0.92 to US$56.58 per barrel

Source: Affin Hwang Research - 13 Jan 2021