Week in review
- China CPI rose 0.1% y/y in December
- Japan nominal base wages grew 3.0% y/y in November
- U.S. December nonfarm payrolls grew by 256K
Week ahead
- UK CPI
- U.S. CPI
- Bank of Korea monetary policy decision
Thought of the week
MSCI APAC ex-Japan returned 10.6% in USD terms on a total return basis in 2024, underperforming the MSCI AC World. However, this was mainly due to U.S. outperformance, as Asian equities actually outperformed MSCI AC World ex-U.S., which had a 6.1% return. Within the region, Taiwan (35.1%) and China (19.7%) outperformed by a wide margin, while markets like Korea and Indonesia lagged, with disparities mainly driven by changes in multiples. Sectors also showed performance divergences, with information technology and banks outperforming, while commodities and consumer staples lagged. Looking ahead, the upcoming Trump administration could pose challenges to Asian equities, such as slower monetary easing, a strong dollar, and tariff risks. However, these factors have differing impacts in the region. For example, China onshore equities are less correlated with U.S. yields and the U.S. dollar, while markets like India and Indonesia are relatively insulated from tariff risks. Thus, while uncertainties remain elevated, the performance discrepancies in 2024 are likely to continue into 2025, providing fertile ground for active management.
Sources of global equity returns
Total return, USD
Market data