US economic growth blew past expectations in the fourth quarter, as lower inflation and a hot job market encouraged Americans to keep spending. The world’s biggest economy grew at a 3.3% annualised rate last quarter compared to the one before – slower than the 4.9% pace recorded in the third quarter, sure, but defying forecasts of 2%. That was mainly driven by the economy’s biggest growth engine, consumer spending, which rose at a 2.8% pace. The figures are the latest proof of the US economy’s resilience in the face of the Federal Reserve’s aggressive run of interest rate hikes: instead of plunging into recession last year, as many had warned, it expanded by 2.5% instead. 

In a classic example of “buy the rumour, sell the news”, the price of bitcoin has dropped by more than 20% since the first US ETFs investing directly in the cryptocurrency became more than just chatter, and actually launched. Mind you, that dip was made worse by the US dollar’s sudden strength, plus higher bond yields, and some big one-off transactions. Investors’ speculation that the new ETFs would catalyse wider bitcoin adoption by institutional and retail investors was likely already built into bitcoin’s near-160% surge last year. 

The ECB kept its key interest rate on hold at a record high of 4% for a third straight meeting and stuck with its previous message that rate cuts may still be some distance away. That warning seems to be falling on deaf ears though, with traders still betting that the ECB is more likely than not to cut rates in April. This coincides with economists making gloomy revisions to their 2024 projections for eurozone growth and inflation, to reflect discouraging data on industrial production, producer prices, business orders, and retail sales. Also, to be fair, with attacks on ships in the Red Sea disrupting supply chains and threatening to reheat the bloc’s cooling inflation, you can see why the ECB might be extra cautious about changing course too hastily.

Europe’s most valuable tech company, ASML, is the sole producer of the equipment needed to make the most sophisticated semiconductors, so demand for its products is a bellwether for the industry’s health. Its latest results suggest the chip industry is roaring back to life after a slump that dates back to the pandemic. Orders for ASML’s machines jumped to a record €9.2 billion in the fourth quarter – a more than threefold increase from the previous quarter and way more than the €3.6 billion that analysts were forecasting. The Semiconductor Industry Association might not have been too surprised by the comeback: it reported a rise in global chip sales in November for the first time in more than a year, on the back of rising demand for AI. 

The BoJ has been hanging onto its ultra-low interest rates with two hands, hoping to nudge consumer prices higher after decades of battling with economy-crushing deflation. So it wasn’t too surprising when it held its key rate at minus 0.1% last Tuesday. The BoJ has been the only major central bank with rates in negative territory for a while now. However, with Japan’s inflation exceeding the Bank’s 2% target for almost two years, economists figure the days are probably numbered for those negative rates. They expect the BoJ to raise rates in April after it has assessed the results of the country’s annual compensation negotiations. After all, higher pay is crucial in securing a positive cycle of rising prices and income that feeds into economic growth. 

The total value of India’s stock market surpassed Hong Kong’s for the first time, making it the fourth-biggest equity market in the world. And it shouldn’t come as a huge surprise. India is benefitting from a rapidly expanding base of retail investors, robust corporate earnings, and a young and growing population. What’s more, global investors and companies see it as a compelling trade and manufacturing alternative to China, with a stable political environment and a big, fast-growing, consumption-driven economy.