Morning wrap (02.01.2025)

Indices from the Asia-Pacific region are mostly trading lower during the first session of the new year. Additionally, several markets, including Japan and New Zealand, remain closed due to the second day of New Year holidays. Stock markets are open in China, Singapore, and Australia.

Chinese indices are recording losses of around 2.50–3.10%, while the Australian AU200.cash index is gaining 0.66%. In Europe, futures on indices point to a higher opening for the cash session. The German DAX index is up 0.49%, and the EURO STOXX 50 is trading as much as 0.80% higher.

In the forex market, the New Zealand and Australian dollars are the biggest gainers during the first part of the day, with increases of 0.2–0.3%. On the other hand, the Canadian dollar, U.S. dollar, and euro are among the most losing currencies.

Activity in China's manufacturing sector grew in December but less than expected. The Caixin PMI for manufacturing fell to 50.5 points, compared to expectations of 51.6 and the previous month's reading of 51.5. The decline can be attributed to a drop in export orders and a cooling of business optimism regarding China's economic outlook.

India's industrial sector activity also weakened in December, primarily due to weaker demand despite eased cost pressures and strong employment growth. The PMI index fell to 56.4—the weakest since December 2023—compared to 56.5 in November and below estimates, which pointed to an increase to 57.4.

Singapore's economic growth in the last quarter of 2024 exceeded estimates but slowed compared to Q3 2024 (5.4% in Q3 2024). According to preliminary estimates, GDP grew by 4.3% in the three months to December compared to the previous year. Analysts had forecast growth of 3.8%.

According to ECB President Christine Lagarde, the European Central Bank's 2% inflation target is within sight. In a post published on x.com, Lagarde said that in 2024, the ECB made significant progress in reducing inflation and expressed hope that 2025 will be the year the target is achieved, in line with expectations and strategic plans.

A greater appetite for risk is also supporting sentiment in the cryptocurrency market. Bitcoin is up 1.00% to $95,300, Ethereum is up 1.30% to $3,400, and the capitalization of other altcoins has risen collectively by 1.10%.

In 2024, BlackRock's iShares Bitcoin Trust led ETF funds with total net inflows of $37 billion, surpassing competitors like Fidelity ($12 billion).