EconoTicker

Turkey’s January sentiment indicators improved modestly even as factory utilisation eased. Capacity utilisation dipped to 74.1% (from 74.4%), while manufacturing confidence rose to 101.6 (from 100.8). Consumer confidence also ticked up to 83.7 (from 83.5). The mix suggests sentiment is stabilising, but hard-activity utilisation remains soft—consistent with a cautious growth pulse amid tight financial conditions.

Market impact: Mildly supportive for TRY domestic sentiment and Turkey-facing cyclicals, but not a game-changer; FX remains driven primarily by inflation expectations, policy credibility, and external financing conditions.

South Korea’s economy unexpectedly contracted -0.3% q/q in Q4 (vs +0.1% expected, after +1.3% in Q3), while GDP slowed to 1.5% y/y (vs 1.9% expected, 1.8% prior). The downside surprise points to a sharper late-year slowdown, raising questions about domestic demand resilience even as the tech/export cycle has been a relative bright spot.

Market impact: KRW-negative at the margin and supportive for a more dovish BoK tone; may weigh on Korea cyclicals, while reinforcing the market’s preference for global AI/semis exposure over purely domestic-demand plays.

Brazil’s foreign-exchange flows swung into surplus, showing a +$2.215B inflow versus -$1.696B previously. The shift points to improved near-term balance of payments dynamics—likely reflecting a mix of trade-related conversions and portfolio positioning—after an earlier outflow phase.

Market impact: Typically, BRL-supportive at the margin (better flow backdrop) and can help local rates/credit sentiment, but sustained currency impact depends on global risk appetite, commodities, and Brazil’s fiscal/policy headlines.

Mexico’s retail sales beat expectations, rising 1.0% m/m in November (vs 0.1% expected, 0.5% prior) and accelerating to 4.4% y/y (vs 3.0% expected, 3.4% prior). The upside surprise points to resilient household demand and a firmer near-term growth pulse, even as rates remain restrictive.

Market impact: Mildly MXN-supportive via stronger growth optics and carry appeal but can be hawkish for Banxico expectations at the margin if demand strength threatens disinflation; local rates may see modest upward pressure.

South Africa’s retail sales rose 3.5% y/y in November, up from 3.0% previously, signaling firmer consumer demand into year-end. The pickup is consistent with a more supportive real-income backdrop as inflation remains contained, though the durability will depend on credit conditions and employment momentum.

Market impact: Mildly positive for South Africa growth and domestic cyclicals; can be modestly ZAR-supportive if it reinforces a “soft landing” narrative, but FX is still primarily driven by global risk sentiment and rate differentials.

South Africa’s headline CPI rose to 3.6% y/y in December (in line with expectations, up from 3.5% prior), while monthly CPI increased 0.2% m/m after -0.1% previously. Core CPI held at 0.1% m/m and ticked up to 3.3% y/y (from 3.2%). Inflation remains contained in the lower half of the SARB’s target band, but the slight firming suggests disinflation is not linear.

Market impact: Largely neutral for SARB near term, but mildly reduces urgency for rate cuts; ZAR reaction is usually limited unless paired with global risk swings—though firmer inflation can add modest support to local yields.

Ursula von der Leyen, President of the European Commission, delivered remarks at the Davos Annual Meeting emphasizing unity, multilateralism, and the need to uphold dialogue among nations — aligning with the Spirit of Dialogue theme. Her address highlighted the EU’s vision on global cooperation and collective problem‑solving.

Market impact: Boosts European policy predictability, likely easing regulatory risk premiums in EU‑linked markets.

Nearly 3,000 leaders from over 130 countries — including ~65 heads of state and government as well as top CEOs — are attending the World Economic Forum Annual Meeting in Davos, reinforcing the A Spirit of Dialogue theme. These gathering spans political, business, civil society, scientific, and cultural figures, underlining efforts to confront fragmentation and build cooperation amid complex geopolitical and economic challenges.

Market impact: Reinforces global cooperation momentum, providing confidence to cross‑border investment flows and multilateral engagement narratives.

Senior leadership at the World Economic Forum is considering relocating the Annual Meeting from Davos to other cities due to capacity, cost and inclusivity concerns. Potential alternatives include Detroit, Dublin, Jakarta, and Buenos Aires — part of a broader discussion about forum relevance and accessibility amid record attendance and logistical challenges.

Market impact: Signals long‑term organizational strategy shift that could impact Davos’s brand premium and global stakeholder engagement; unlikely to have immediate market effects.

Larry Fink, CEO of BlackRock, criticized modern capitalism at Davos for failing to equitably distribute wealth and warned that AI technology could worsen inequality if not managed inclusively. He called for broader stakeholder participation in AI gains and urged the forum to enhance transparency and relevance to rebuild trust.

Market impact: Raises policy and regulatory awareness around AI and inequality; could pressure tech valuations and shape long‑term ESG investor focus.

The International Monetary Fund (IMF) warned that tariff escalations linked to tensions around Greenland and broader trade friction could trigger a “spiral of escalation” that threatens global economic stability. The IMF’s World Economic Outlook foresees moderate growth, but warns that a full‑blown trade war would significantly hurt markets and global GDP.

Market impact: Adds a risk premium to global equities and credit markets; supportive for safe havens (gold, sovereign debt) amid trade uncertainty.

Chinese Vice‑Premier He Lifeng delivered a full special address at Davos under the Spirit of Dialogue banner, urging countries to resist protectionism and unilateralism and to embrace multilateralism. He stressed that globalization is not zero‑sum and underscored the importance of listening, learning and building trust, echoing earlier remarks with expanded detail on cooperation and shared destiny.

Market impact: Supports multilateral trade sentiment, potentially easing fears around trade fragmentation and aiding markets dependent on global commerce.