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Wall Street's best day of the year so far was rooted in inflation relief and a boom in bank stocks reporting bumper earnings, with a retail readout up next on Thursday. After Tuesday's sub-forecast producer price data, the December consumer price index also surprised and the annual 'core' CPI inflation rate showed disinflation resuming. With key price components on shelter and services better behaved, the 6-month annualised core CPI rate is now back below the Federal Reserve's 2% target to its lowest in four years.

U.S. President-elect Donald Trump's imminent return to the White House and fading hopes for aggressive interest rate cuts have driven the dollar to multi-year highs, and investors see this strength continuing, aided by the new administration's pro-growth and inflationary policies. Much of these gains have occurred since Trump's victory in the November election, as investors raced to prepare portfolios for the new administration's trade and tariff policies, which are expected to offer near-term dollar support while pressuring other economies and currencies. Tariffs with their potentially inflationary pressures could prompt the Fed to be cautious with rate cuts, even as trade tensions darken the global economic growth outlook and send more investors seeking the safe-haven dollar.

Global unemployment remained steady last year at an historical low of 5%, where it is set to stay in 2025, the International Labour Organization said in a report on Thursday. However, the Geneva-based body said that a global economic slowdown from 3.3% to around 3.2% last year, and a gradual deceleration over the medium term, will limit job creation. "The global economy continues to expand at a moderate rate, but it is projected to gradually lose steam, preventing a stronger and more durable labour market recovery," the ILO flagship report on global employment and social trends said.

Global stocks and non-dollar currencies found some respite from their inflation-related anxieties, buoyed by a strong start to the earnings season and a softish U.S. core inflation reading that revived hopes for Fed rate cuts this year. But the relief rally may be short-lived, with U.S. inflation still looking a bit too warm for comfort - and potentially facing upward pressure if the incoming Trump administration pursues aggressive policies on tariffs and taxes. While the just-about-soft U.S. core inflation figure for December lifted sentiment, dragging Treasury yields lower and boosting stocks, analysts cautioned that the annual rate of 3.2% was still a bit on the high side, with the Fed likely to stay on hold for a while longer.

U.S. Treasury nominee Scott Bessent plans to say Thursday during his confirmation hearing that President-elect Donald Trump has an opportunity to unleash “a new economic golden age." According to prepared testimony given to The Associated Press, Bessent will say the U.S. must secure vulnerable supply chains, levy sanctions to address national security concerns “and critically, we must ensure that the U.S. dollar remains the world’s reserve currency.” Lawmakers on Capitol Hill are set to question Bessent's stance on taxes, tariffs, trade and other issues during his confirmation hearing before the Senate Finance Committee.

(Bloomberg) -- Maintaining the dollar as the world’s reserve asset is critical to US economic health and the nation’s future, Scott Bessent, Donald Trump’s nominee for Treasury secretary, will tell a Senate committee, according to prepared remarks.Most Read from BloombergThese Homes Withstood the LA Fires. Architects Explain WhyAs E-Bikes Boom in NYC, Some Call for More RegulationsChicago Agency Pitches $1.5 Billion Plan to Fix Transit WoesNYPD Reforms Car Chase Policy Amid Rising Crashes, Injur

Canada's energy minister came to Washington this week to warn U.S. lawmakers about President-elect Donald Trump's tariffs threat on Canada: They'd inflict economic pain on Americans, with higher prices and job losses. Jonathan Wilkinson, Canada's minister of energy and natural resources, said he feels obligated to sound the alarm about the inflationary risks being created by a president who was elected in large part on the promise of bringing down prices. "It will mean higher gas prices, it will mean higher food prices, it will mean higher natural gas prices for heating people's homes,” he told The Associated Press on Wednesday.