Euro strengthens, oil rises and gas also rises
On the foreign exchange front, the euro strengthened against the dollar, changing hands at 1.0688 dollars (from 1.0599 dollars at Friday’s close). The currency also stands at 140.78 yen (140.44), while the dollar/yen exchange rate is at 131.67 (132.49). Oil also continues to rise, benefiting from the reopening in China: the wti, the February contract, changes hands at 75.22 dollars, up 1.97%, while the Brent of the North Sea, the March contract, 79 $.84 a barrel, up 1.27%. Finally, the value of gas rises: the February future is worth 72.97 euros per megawatt hour, up 4.9%.
Stock markets rise in Asia, Tokyo closes positive
Asian stocks were up sharply as the MSCI emerging markets index entered a bull market phase, recovering more than 20% from its October lows. The prices are driven by the reopening and support for the economy taken decisively by Beijing and the bets on a slowdown in the Fed’s monetary tightening, after last Friday’s data saw the ISM index enter a phase of contraction and wages cool down. Tokyo, Sydney and Shanghai closed up 0.6%, Shenzhen up 0.7%, Seoul up 2.6% while Hong Kong advanced 1.9%.
China reopens borders, change of course on Covid
China has decided to reopen its borders from Sunday. The new strategy against Covid by the Beijing authorities is underlined by the Chinese newspapers: “life goes on again” writes the official newspaper of the Chinese communist party in an editorial. China has indicated that as of January 8, the victims caused by Covid are just over 5 thousand but according to the World Health Organization, China significantly underestimates the infections and international experts estimate one million deaths by 2023. The elimination of The quarantine obligation for international flights, however, takes place in a phase in which the connections between China and the rest of the world are minimal compared to those of 2019, the pre-pandemic phase. There were 245 international flights in China on Sunday, including departures and arrivals, which compares with 2,546 flights on the same day in 2019 (-91%). China estimates a 70-75% recovery in domestic tourism revenues this year.
Eyes on US inflation Thursday and employment in Italy
At the start of the week, the markets are still looking at the macroeconomic data scheduled to evaluate the state of health of the economy. Waiting for the most relevant data, the one on theUS inflation on Thursday, the week opens with data on the industrial production in Germanywhich is growing in real terms by 0.2% on a seasonally adjusted monthly basis, according to the estimate released by the Federal Statistical Office Destatis. The figure compares with the 0.4% monthly decrease in October (figure revised downwards compared to the previous estimate of -0.1%). The comparison with November 2021, on a seasonally adjusted basis, shows a decrease of 0.4 percent. Still on the European macro-economic front, today Istat will release data on theemployment in Italy.
