New car registrations in the UK dropped in January, preliminary industry data showed, because of slower demand from fleet and private buyers. The Society of Motor Manufacturers and Traders reported that overall registrations fell to approximately 137,000 units in January, with more than a fifth of those being electric vehicles, aligning with the industry’s continued commitment to the shift towards EVs. That means a small year-on-year drop in car sales – in January 2024, 142,876 new cars were registered. The SMMT is due to release its full report at 9am. China’s currency has weakened as financial traders return to work after the Lunar new year. The eruption of the new US-China trade war this week, in which tariffs were added to exports between the two countries yesterday, has ended the holiday spirits. This pushed the yuan towards the 16-month low set last month. But the fall in the yuan has been cushioned by China’s central bank, as Reuters said: "The dollar rose more than 0.5% against the yuan to a high of 7.2863 in onshore trade, though its gains were capped by the People’s Bank of China (PBOC) setting a stronger-than-expected yuan midpoint rate, around which the currency is allowed to trade in a 2% band. "The fixing had been closely watched by investors for clues on whether Beijing would allow the currency to weaken to blunt the impact of sweeping new tariffs imposed by US president Donald Trump." Economists have suggested that China could respond to US tariffs by allowing its currency to weaken, which would boost exports and fight deflation. After the mayhem of "Manic Monday", a level of calm has returned to the financial markets today (despite the weakening yuan). The pound hit a one-week high of $1.249 last night, recovering all its losses earlier this week as fears of a global trade war hit investor confidence. Wall Street recovered its poise, too, yesterday, with the Dow Jones industrial average gaining 0.3%. Traders are relieved that Trump suspended US tariffs on Canada and Mexico for 30 days on Monday night – although they are also aware that it only kicks the can down the road for a month. The agenda • 9am GMT: eurozone services and composite PMI for January • 9am GMT: SMMT data on UK car sales in January • 9.30am GMT: UK services and composite PMI for January • 3pm GMT: US services and composite PMI for January We'll be tracking all the main events throughout the day …
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