On Friday, Canada released the consumer prices data that beat the consensus estimates. The numbers showed that in December, the CPI increased by an annualized rate of 2.0%, which was higher than the consensus estimate of 1.7%. This was a positive indication for the Canadian economy that is facing a number of challenges, including the falling house prices. The number was also along the Bank of Canada’s target of 2.0%, which increases the likelihood that the bank could raise interest rates in the near term.
The US government shutdown continued over the weekend as differences between the White House and congress increased. In a bid to ease the tensions, Donald Trump made some concessions that would allow the government to be opened. He offered to extend the protections of the ‘dreamers’ by three years, a measure that was rejected as a non-starter by the democrats. All this shows that the shutdown could continue for an extended period of time. On Friday, data showed that consumer confidence had slowed to 90.7 from the previous 97 while the Michigan current expectations reduced to 110.
Over the weekend, it was announced that Donald Trump will hold a follow-up meeting with his North Korean counterpart in Vietnam. This will be the second time that the two leaders have met to discuss the issue of the denuclearization of the Korean peninsula. This meeting comes after the first meeting, which happened in Singapore. There is some criticism about the need for the second meeting since the first one did not achieve much. In response to the news, the Japanese yen strengthen slightly after the market open.
Data released early today confirmed the notion that the Chinese economy is slowing. The first reading of the Chinese Q4 growth showed that the country’s economy expanded by 6.4%, which was lower than the previous quarter’s 6.5%. This was the slowest rate of growth in more than ten years. Recently, analysts have been warning that the previous growth trajectory of the Chinese economy was not achievable. This is because the country is transitioning from the previous strategy of capital spending. On a positive note, the country’s industrial production rose by an annualized rate of 5.7%, which was higher than the estimated 5.3% while retail sales increased by 8.2%. The unemployment rate was at 4.9%, which was higher than the previous 4.8%. In recent weeks, the government has announced a number of measures to boost growth including the reducing of VAT, personal income tax cuts, and a large-scale reduction of taxes.
In France, the yellow vest protests continued this weekend, causing a major headache for the young president. Last week, the president went on the offensive, by having roundtable discussions with the people from around the country. He also announced that he would not attend the World Economic Forum, an annual jamboree that does not achieve much for the global community. These protests are mostly because of the income inequality in the second-largest EU country.