Due to reports that US President elect Donald Trump's economic team is discussing gradually increasing tariffs to avoid soaring inflation, the Chinese stock market rebounded on Tuesday (January 14), US stock index futures rose, and the US dollar weakened.

The stock markets of China and Hong Kong are leading in the Asian region, while the stock markets of Sydney and Taiwan have also risen. The US stock index futures continued the slight rise of the S&P 500 index on Monday. The US dollar index fell for the first time in six days, with the New Zealand dollar leading the way among the currencies of the Group of Ten.

Trump has threatened to impose tariffs of up to 60% on Chinese goods, a threat that has long plagued the Asian market. The plan of gradually increasing tariffs may ease inflation concerns, reduce the yield of treasury bond bonds, and provide space for the Federal Reserve to cut interest rates. The upcoming US inflation data this week will provide more clues for the path of the Federal Reserve's interest rates.

The news of the gradual implementation of tariffs globally has brought more positive emotions to the impact of tariffs on China, "said Billy Leung, investment strategist at Global X ETFs

The yield of Japan's 40 year treasury bond rose to the highest level since its issuance in 2007, which was affected by the global debt selling and the market expectation that the Bank of Japan would raise the policy interest rate. Ryozo Himino, Deputy Governor of the Bank of Japan, reiterated that if the economic outlook is realized, the central bank will raise interest rates. The Japanese stock market, which reopened after the holiday, fell.

Chinese tourism related stocks have rebounded significantly, with stocks such as Eastern Airlines and Tongcheng Travel Holdings rising after the government announced the promotion of tourism through the issuance of consumer vouchers and the expansion of visa free policies.

Goldman Sachs Chief Economist Jan Hatziu predicts that the Chinese government will adopt more monetary and fiscal easing policies and support the real estate market. He expects China's economic growth rate to drop from around 5% in 2024 to 4.5% this year, in line with market consensus.

In terms of other assets, the 10-year US Treasury yield fell 1 basis point to 4.77%, after rising to 4.78% on Monday. Yesterday, the S&P 500 index rose 0.2%, the Nasdaq 100 index fell 0.3%, and the Dow Jones Industrial Average rose 0.9%.

The technology stock index of the "Big Seven" in the US stock market fell by 0.4%. The White House has announced new restrictions on the sales of advanced AI chips by Nvidia and its peers, with the Trump administration deciding how to implement these restrictions that have sparked strong industry opposition.

The highest securities regulatory authority in China has stated its commitment to establishing mechanisms to stabilize the market and has pledged to stabilize market expectations by 2025. Bloomberg reported that if TikTok fails to avoid a controversial ban, Chinese officials are evaluating the possibility of Elon Musk acquiring TikTok's US business.

Leung pointed out, "TikTok's report suggests that US China relations may not be as bad as they seemed before

Although the underlying inflation rate in the United States may only slightly decrease by the end of 2024, the Federal Reserve may continue to take a slow pace of interest rate cuts against the backdrop of a resilient job market and a stable economy.

If the potential inflation in the United States slightly cools down by the end of 2024, against the backdrop of a flexible job market and stable economy, this supports the Fed's slow approach of further interest rate cuts. Investors have been selling stocks because they are increasingly concerned that price pressure remains stubborn.

According to a Bloomberg Economist survey, the core consumer price index (CPI) excluding food and energy is expected to rise 0.2% month on month in December, following four consecutive months of 0.3% increase. The core CPI is a better reflection of potential inflation and is expected to grow by 3.3% compared to the same period last year, which is consistent with the data of the first three months.

This Wednesday's CPI report will be followed by the release of December retail sales data on Thursday, which is expected to show strong consumption during the holiday season.

In terms of commodities, oil prices fell slightly on Tuesday after hitting a five month high the previous trading day.