Last week saw a series of important global economic developments. In the United States, jobless claims rose to 217,000, while oil inventories decreased by approximately 1.962 million barrels. Inflation indicators showed mixed movements, with the headline Consumer Price Index (CPI) rising 2.9% year-on-year, while the core CPI fell to 3.2%. In the Eurozone, headline inflation rose, with the CPI increasing by 2.4%. In the UK, inflation dropped to 2.5%, while GDP grew by 0.1% month-on-month. In China, exports grew strongly by 10.7% in December, along with improvements in several economic indicators, such as loans and GDP. In Australia, employment rose significantly, but unemployment stood at 4.0%. These developments suggest persistent inflationary pressures in the U.S., while other economies continue to experience varying growth.
Market Analysis
USD/JPY Pair
The USD/JPY pair continues its downward trend, reaching 154.97 on Friday, January 17, 2025, the lowest level since December 19, 2024. It is currently trading near the 156.00 level. The pair has fallen by 2% since the January 10, 2025 peak of 158.87, reaching the low on Friday, January 17, 2025. Factors supporting the Japanese yen include: narrowing the yield gap between Japanese and U.S. government bonds, a slight weakness in the U.S. dollar, and hawkish statements by the Governor of the Bank of Japan, Kazuo Ueda. The Relative Strength Index (RSI) currently stands at 50, indicating a neutral stance and suggesting uncertainty surrounding the USD/JPY pair.
Netflix
Netflix’s stock rose by about 84% last year. The markets are awaiting the release of Netflix’s Q4 2025 financial results on Tuesday, January 21, 2025. The markets expect the company to report earnings of $4.20 per share, up from $2.11 per share in the previous reading. Revenue is expected to reach $10.13 billion, compared to $8.83 billion in the previous report. The RSI currently stands at 50, indicating a neutral stance on Netflix’s stock.
Gold
Gold prices have risen by around 3% since the beginning of the year, currently near $2,700. The bullish trend is expected to continue, especially with several factors supporting gold prices, such as ongoing gold purchases by central banks, potential U.S. interest rate cuts in the near future, and persistent U.S. inflation. The RSI currently stands at 59, suggesting upward momentum for gold. The MACD indicator shows a bullish crossover between the MACD (blue) and the Signal Line (orange), further supporting the upward momentum for gold.
German DAX Index
Notably, despite the economic contraction in Germany and the negative factors surrounding the country, particularly on the political front, the situation is the opposite for German stocks. The DAX index continues its upward trajectory, reaching 20,921 points on Friday, January 17, 2025, the highest level ever. The index has risen by about 5% since the beginning of the year. The RSI currently stands around 72, indicating an overbought zone and suggesting continued positive momentum for the DAX.
Key Events This Week
Markets are looking forward to several important economic indicators and data releases this week:
• Today, the main lending rate in China, industrial production index in Japan, and the producer price index in Switzerland will be released.
• On Tuesday, data on income including bonuses and unemployment in the UK, as well as CPI in Canada and New Zealand, will be closely watched.
• On Thursday, Japan’s export and import indices, U.S. weekly jobless claims, and crude oil inventories will be released.
• Finally, on Friday, the Bank of Japan’s interest rate decision is awaited, with expectations for a 25 basis point hike from 0.25% to 0.50%. Additionally, Japan’s CPI, along with manufacturing and services PMI data for Australia, Japan, the UK, the Eurozone, and the U.S., will be released, as well as the University of Michigan’s consumer sentiment index and existing home sales data in the U.S.
Please note that this analysis is provided for informational purposes only and should not be considered as investment advice. All trading involves risk.
