- Last week, the Nasdaq 100 was flat, while the DJIA slipped 0.5%. The SPX also fell 0.2%. Stocks tumbled early in the week after President Donald Trump announced a 25% tax on imports from Mexico and Canada and a 10% tax on Chinese imports starting February 1. However, by Monday evening, Trump delayed the Mexico and Canada tariffs for 30 days, easing concerns and helping stocks recover some losses by the end of the week.
- The STOXX Europe 600 rose 0.6%. The Bank of England (BoE) cut its main interest rate by 0.25% to 4.5%, citing progress in controlling inflation and wage growth. It also halved its UK economic growth forecast for this year to 0.8%. The BoE now expects inflation to stay above target until 2027, six months longer than previously predicted. Governor Andrew Bailey signaled more rate cuts ahead but said decisions will be made step by step.
- The CSI climbed 2%. Mainland Chinese markets gained during a shortened trading week as strong consumer spending during the Lunar New Year offset concerns over Trump’s 10% tariff on Chinese imports. Meanwhile, the Caixin China General Services PMI fell to 51 in January from 52.2 in December. While still above 50, indicating growth, the data showed business activity and new orders expanding at their slowest pace in four months.
Brazil's real depreciated by over 20% against the US dollar last year, with a sharp sell-off in the final months of 2024 pushing the currency to a record low. This decline was driven by investor concerns over the Brazilian government's fiscal policies and capital outflows.
However, the real has rebounded strongly this year, ranking among the top-performing emerging market currencies. It has appreciated by 6% against the dollar, reaching its highest level since November 18, just before the government's fiscal package was introduced.
More broadly, emerging market currencies have strengthened recently as trade war fears eased following President Donald Trump's decision to delay tariffs on Canada and Mexico.
