Daily Update:

• Eurostat's preliminary flash estimate, released yesterday, showed that Q4 growth in the Euro area completely flatlined at 0%. This came in below expectations and below the 0.4% growth in Q3 2024. Separate data yesterday showed that the two biggest Euro economies, Germany and France, also both came in below growth estimates for Q4. A few hours later, the ECB cut its benchmark deposit rate by 25bps to 2.75% (the lowest rate since 2023) in a unanimous decision. President Lagarde stated that the economy is “set to remain weak in the near term” and that “monetary policy remains restrictive”. However Lagarde was more confident that inflation “was well on track” (2.4% in December) and that the ECB “never talked about stagflation”. The ECB also predicts growth in 2025 to be 1.1%, slightly higher than 2024’s annual 0.7% growth estimate and the IMF’s 2025 estimate of 1.0%. 
• Recent data in the U.S. showed an annualised growth rate for Q4 at 2.3%. Though this was below expected, it is still a robust figure that has pushed 2024 yearly growth to 2.8%.  
• President Trump once again threatened 100% tariffs on BRICS nations if they attempt to create a BRICS currency or replace the U.S. dollar. The President is also considering excluding oil imports from the 25% tariffs he plans imposing on Mexico and Canada – “they send us oil – we’ll see”. 
• BTC Spot ETFs saw a surge of inflows yesterday amounting to $588.1M, marking a departure from the rest of the week which began with $457.6M in outflows and saw modest interest on Tuesday and Wednesday.
• The ETH Spot ETFs also benefitted from $67.8M inflows with the rest of the week having been negative. At-the-money implied vol levels of short-tenor options for both majors is exhibiting a downward trend, with BTC’s 1-month tenor at 50%. 
• In DeFi, private equity firm Apollo Global Management has announced a partnership with Securitize to tokenise shares of its Apollo Diversified Credit Fund on various blockchain networks, including: Solana, Ethereum, Avalanche, Polygon, Aptos and Ink. Additionally, Rollman Management Digital, a private investment firm, has invested  $20M into Elastos, a project centered around bringing more DeFi capabilities to Bitcoin holders. Elastos has previously launched a BTC DeFi collateralisation protocol allowing users to access ETH’s network with BTC as the underlying.

This Week’s Calendar:

Charts Of The Day: