The infoshot to help kick-start your week
Last Week
- The Bank of Japan (BOJ) raised its key policy rate to 0.5%, the highest since 2008, signalling a bullish view on inflation. Governor Kazuo Ueda indicated that future rate hikes depend on economic conditions. The yen strengthened by 0.8% against the dollar, and 10-year Japanese government bond yields rose to 1.225%. Japanese stocks fell slightly by 0.1%. The BOJ’s decision was influenced by stable global financial markets and the return of Donald Trump to the White House. The rate hike followed a report showing consumer prices rising at 3%, above the BOJ’s target. The BOJ raised its inflation projections, reinforcing expectations of gradual rate hikes. Economists suggest the BOJ is keeping its options open regarding the final rate destination. The BOJ’s move aligns Japan’s rates closer to other countries, providing flexibility for future economic responses. Prime Minister Shigeru Ishiba’s cabinet supported the hike, creating an opportune timing for the decision.
- President Donald Trump expressed a preference for not imposing tariffs on China, despite continuing to threaten such actions. He emphasised tariffs as a significant leverage over China but indicated a reluctance to use them. Markets reacted positively, with the yuan rising 0.6% and Chinese stocks gaining 0.8%. Trump’s softer stance on tariffs contrasts with his earlier threats of up to 60% tariffs, which could severely impact US-China trade. His administration has also taken a lenient approach towards China-owned app TikTok and has engaged diplomatically with Chinese officials. Trump aims to avoid alienating Beijing while seeking to influence Russian President Vladimir Putin to end the war in Ukraine. Chinese Foreign Ministry spokeswoman Mao Ning highlighted the importance of US-China dialogue and consultation, reflecting the mutual interests between the two nations.
- Novo Nordisk A/S saw its shares rise by up to 14% in Copenhagen after its experimental weight-loss shot, Amycretin, showed up to 22% weight loss in an early-stage trial. This result has boosted investor confidence in Novo’s pipeline, especially after recent setbacks with other drugs and US price cuts for Ozempic and Wegovy. Amycretin’s promising results position Novo back in the competitive race for next-generation weight-loss drugs, challenging Eli Lilly & Co.’s Retatrutide. Patients on the highest dose of Amycretin lost the most weight over 36 weeks, with side effects similar to other weight-loss drugs. Analysts view this development as a positive shift in sentiment for Novo, which is in need of pipeline successes. The new drug combines GLP-1 and amylin, unlike the dual-compound CagriSema. Danish biotech Zealand Pharma A/S, also working on amylin-based medicines, saw its shares rise by 8.1% following the news.
Market Pulse
Coming Up
- US CB Consumer Confidence, Tuesday 28th January 2025 at 3:00pm
- US Fed Interest rate decision, Wednesday 29th January 2025 at 7:00pm
- ECB Interest rate decision, Thursday 30th January 2025 at 1:15pm
Notice:
For professional advisers only, Copia does not provide financial advice, and the contents of this document should not be taken as such. The performance of each asset class is represented by certain Exchange Traded Funds available to UK investors and expressed in GBP terms selected by Copia Capital Management to represent that asset class, as reported at previous Thursday 4:30pm UK close. Reference to a particular asset class does not represent a recommendation to seek exposure to that asset class. This information is included for comparison purposes for the period stated, but is not an indicator of potential maximum loss for other periods or in the future.Open document settingsOpen publish panel
