Tech Shares Lead US Stocks to All-time Highs

US stocks eked out a gain to close at a record with tech shares lifting the major indexes on anticipation that more fiscal spending will revive economic growth and bolster corporate earnings. The dollar weakened. The S&P 500 rose by 0.03% to 3,853.07 while Dow Jones was down 12.37 points (0.04%) to 31,176.01.

US Jobless Claims Fall Slightly, Though Remain Near 1 Million

Applications for US state unemployment benefits fell only slightly last week and remained elevated, signaling heightened pandemic-related strain in the US labor market just as Joe Biden begins his first days as president. Initial jobless claims in regular state programs declined by 26,000 to 900,000 in the week ended Jan. 16, according to Labor Department data.

US Housing Starts Rose to Fastest Pace Since 2006 in December

US home construction starts rose in December to the best pace since late 2006 as builders responded to the robust demand for single-family housing. Residential starts climbed by 5.8% to a 1.67 million annualized rate, according to government data released. The figures are the latest sign of the housing market’s strong rebound.

ECB Seeks New Gauges by March to Aid Pandemic Stimulus Debate

European Central Bank officials have asked staff to propose new ways to measure financial conditions in the euro area, potentially assisting future decisions on how much stimulus the region’s pandemic-hit economy needs. Some officials want new ways to measure the impact of the ECB’s record-low interest rates and asset purchases on credit conditions, the people said.

UK’s Sunak to Set Out Plans to Restore Finances in Budget

Chancellor of the Exchequer Rishi Sunak will set out plans in his budget in six weeks’ time to start restoring order to the UK’s finances, a person familiar said, with the country on course to posting its biggest peacetime budget deficit. The Treasury wants to have a plan that looks beyond Covid at how to close the deficit.

BOJ’s Kuroda Maximizes Flexibility Ahead of Crucial Two Months

Bank of Japan Governor Haruhiko Kuroda looked to keep all his options open for a policy review in March following two critical months that will likely determine whether the pandemic will ease or take a turn for the worse. “Yield curve control has worked appropriately and I don’t think the framework itself needs to be changed,” Kuroda said. But from the standpoint of achieving more effective and sustainable monetary easing its operations are under review.

Indonesia Holds Key Rate on Tame Inflation, Gradual Recovery

Indonesia’s central bank left its key interest rate unchanged at a record low, projecting optimism that the economy is recovering and inflation will remain tame even with new restrictions in place to fight a surge in Covid-19 infections. Bank Indonesia held the seven-day reverse repurchase rate at 3.75%. “This decision is consistent with an inflation estimate that’s still low and maintained external stability, as well as efforts to support economic recovery,” central bank Governor Perry Warjiyo said.

Oil Slips With Global Viral Resurgence Highlighting Demand Risks

Oil ended a choppy session lower with worsening global coronavirus outbreaks accentuating concerns over a demand rebound. Brent crude for March settlement rose US$0.02 to US$56.10 per barrel

Source: Affin Hwang Research - 22 Jan 2021