Significant uncertainties were removed from markets in January as the US and China signed a phase one trade deal, and Parliament passed the Withdrawal Agreement Bill ensuring that a smooth, orderly Brexit will take place. Despite these uncertainties being removed, sentiment remained fragile due to a couple of black swan events; namely a flare up of US-Iran tensions, and the coronavirus outbreak in China.
Looking to the month ahead, trade talks are set to dominate, with markets likely to be fixated over the progress of phase two Sino-US discussions, as well as talks over the future UK-EU trading relationship. Meanwhile, investors will pay close attention to incoming fourth quarter GDP prints for signs of a further slowdown in the global economy; as well as eyeing the first policy decisions of the year from the RBA and RBNZ.
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