Retail sales rose in U.S. holiday season

U.S. retail sales from November 1 to December 24 rose 7.6% year-on-year, according to Mastercard. Online commerce is growing at a faster pace (+10.6% yoy). Consumption continues to increase, but not at the expense of electronics – sales of gadgets have fallen (minus 5% y/y). However, this year’s holiday retail sales growth is less than the 8.5% increase last year as decades-high inflation, rising interest rates and the threat of a recession turned consumers cautious. The DXY index which measures USD against a basket of currencies dropped 0.2% to 104.04 level, a potential sign of a risk-on Santa rally to close the year.

Meanwhile, Chin’s officials announced that it will lift the mandatory quarantine for inbound travellers to the country. This led to an increase in commodity prices, while the price of gold is again above $1800 per ounce.

European markets open higher on Monday due to China reopening their borders. This could give an extra boost to the markets in the last trading week of the year. On the stock markets the DAX index in Germany traded 0.63% higher at 14,028.45 level, the CAC 40 in France climbed 0.92% to 6,565.02 level, while Euro Stoxx 50 added 0.79% to 3,847.05 points. There’s not much economic data will be released this week with highlights including U.S. retail inventories and French bond auctions. But investors expect that new pandemic rules in China and becoming EU data will help the European markets approach the close of the year with a degree of optimism and the recession expected for the region in 2023 may not be as bad as first feared.

Bonds closed largely flat on Friday amid weaker liquidity heading into year end. GHANA (+.125) just managed to nick some gains as restructuring talks continue. Over the weekend, the government announced an extension of the GHS bond restructuring to January 16 as talks with stakeholders continue. The debt exchange invitation was also amended to offer new bonds maturing each year from 2027 to 2038, adding 8 new maturities to the already existing 4 among other modifications to the originally announced exchanged programme.