Market Highlights 💡- 21 January 2025

Trump and Xi Jinping hold positive talks, driving Chinese stock market up.

🇺🇸 S&P 500 Index: Market closed

🇺🇸 Nasdaq: Market closed

🇪🇺 Stoxx 600 Index: +0.05% 📈

🇯🇵 Nikkei 225 Index: +1.17% 📈

🇭🇰 Hang Seng Index: +1.75% 📈

🇨🇳 Shanghai Shenzhen 300 Index: +0.45% 📈

🇸🇬 Straits Times Index: -0.07% 📉

Asia-Pacific markets rise: The Hang Seng Index $HSI(HSI)$  and Shanghai Shenzhen 300 Index $CSI300(000300.SH)$ increased by 1.8% and 0.5%, respectively, as investors remained optimistic about US-China relations after positive phone talks between Chinese President Xi Jinping and US President-elect Donald Trump.

The People's Bank of China (PBoC) held the 1-year and 5-year Loan Prime Rates (LPR) unchanged for the third consecutive month in January, at 3.1% and 3.6%, respectively, in line with market expectations.

Upcoming Events:

• Tuesday: EU data release, including the ZEW Economic Sentiment Index.

• Thursday: Investors will await US Jobless Claims, Eurozone Consumer Confidence Index (preliminary), and Japan's export YoY data.

• Friday: US S&P Global Manufacturing and Services PMI (preliminary), University of Michigan Consumer Confidence Index (final), Eurozone HCOB Manufacturing and Services PMI (preliminary), Japan's Inflation YoY, and BOJ rate decision.

Things to Know Today:

1. President Donald Trump promised in his inauguration speech that America would enter a“Golden Age,”outlining plans for reforming immigration, trade, tax, and energy policies while emphasizing US sovereignty and economic revival.

Trump inauguration

2. Trump did not immediately impose tariffs on China but instructed federal agencies to investigate unfair global trade practices and assess China's compliance with the 2020 trade deal.

China tarif by Trump

3. The US Dollar dropped 1.1% on Monday, while major currencies like the Euro, Canadian Dollar, and Renminbi rose, following reports that Trump would impose any new taxes in a“prudent”manner.

US dollar

4. China launched an $8.2 billion National AI Industry Investment Fund in Shanghai, supported by state-owned enterprises, to drive AI industry growth, while the US tightens export controls on AI chips.

AI focus by China

5. Malaysia and the EU resumed negotiations on the Malaysia-EU Free Trade Agreement (MEUFTA) during Prime Minister Anwar Ibrahim's visit to Brussels to strengthen economic ties and boost Malaysian exports.

MEUFTA

Key Takeaways:

The first full trading day of President Trump's second term (Tuesday) is expected to start strong, as his more cautious approach to tariffs immediately boosts investor confidence.

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