Global equity markets had a mixed first full week of 2009. The growth optimism over the year-end period faded in the face of poor macro data, and cyclicals gave back some of their gains from earlier in the week.
FX market continues to favour undervalued currencies over higher-yielding ones. The Euro lost some ground in trade-weighted terms. EUR is forecasted for further slide against GBP, NOK and SEK. Performance in emerging markets was mixed. Eastern European currencies continue to trade on the weak side with HUF and RON being notable underperformers. LATAM currencies have been trading more stable. Finally, a stronger USD has been a negative factor for Asian FX over the last few trading sessions.
The week ahead brings several key macro releases and events. In Europe, the ECB meets this Thursday to decide on policy rates. Market expects a 50 bp cut. In the US, the focus will be on the December
retail sales figures (Wednesday), and on January consumer sentiment, December industrial production and consumer prices (all published Friday). In China, we will get the usual raft of key monthly data including retail sales, exports, industrial production, CPI, and PPI.
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