Top Things to Know Today - page 28
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
Tuesday, January 10
Australia is to report on retail sales.
China is to release data on consumer and producer prices.
Canada is to publish figures on building permits.
Also Wednesday, U.S. President-elect Donald Trump is scheduled to hold his first post-election news conference, which investors will be watching for any hints about the possible direction of economic policy.
Wednesday, January 11
The U.K. is to release a report on manufacturing and industrial production as well as trade data.
Thursday, January 12
The European Central Bank is to publish the minutes of its last monetary policy meeting.
Canada is to report on new house price inflation.
The U.S. is to release the weekly jobless claims report along with data on import prices.
Fed Chair Janet Yellen is to speak at an event in Washington.
Also Thursday, Philadelphia Fed President Patrick Harker, Chicago Fed President Charles Evans, Atlanta Fed's Dennis Lockhart, St. Louis Fed President James Bullard and Dallas Fed President Rob Kaplan are due to speak.
Friday, January 13
China is to report on the trade balance.
The U.S. is to round up the week with reports on retail sales, producer prices and a preliminary look at consumer sentiment.
Philadelphia Fed President Patrick Harker is also to speak.
The British pound plunged to a session low of 1.2125 against the dollar, a level not seen since October 28. It was last at 1.2148 by 5:55AM ET (10:55GMT), down around 1.1%.
The selloff in sterling came as comments by British Prime Minister Theresa May were seen as an indication that the U.K. won’t try to negotiate continued full access to the European single market when it leaves the European Union.
In an interview with Sky News on Sunday, May warned she has no plan to keep "bits of EU membership", indicating an exit from the single market is part of her Brexit plan.
2. U.S. dollar stands tall, still juiced by jobs data
The U.S. dollar stood tall against its major rivals on Monday, after the latest U.S. employment report pointed to strong underlying wage growth, suggesting resilience in the labor market and strengthening the case for more rate hikes in the months ahead.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.3% at 102.47 in early trade.
Against the yen, the dollar was up about 0.1% at 117.11.
Meanwhile, the euro dipped around 0.2% against the greenback to 1.0515.
3. Global stocks struggle for gains, Dow to try again for 20K
U.S. stock markets were struggling for direction on Monday morning, with the Dow remaining within sight of the closely-watched 20,000-level.
European equities were slightly lower in choppy morning trade, while London's FTSE100 managed to eke out gains on the back of a broadly weaker pound.
In Asia, markets ended mixed, with the Shanghai Composite in China closing up 0.55%. Japan's Nikkei remained closed for a public holiday.
4. Oil prices fall $1 as U.S. adds more rigs
Oil prices fell sharply on Monday, as indications of increased drilling activity in U.S. offset signs OPEC members are adhering to planned output cuts.
U.S. crude was down 90 cents, or about 1.6%, at $53.12 a barrel, while Brent slumped 94 cents, or 1.65%, to $56.16 a barrel.
According to oilfield services provider Baker Hughes, the number of rigs drilling for oil in the U.S. last week increased by 4 to 529, the tenth straight weekly rise and a level not seen in more than a year.
Some analysts have warned that the recent rally in prices could be self-defeating, as it encourages U.S. shale producers to drill more, adding to concerns over a global supply glut.
5. China's yuan slides as forex reserves shrink
China's yuan slumped against the U.S. dollar on Monday, with China's central bank setting a firmer fix than many had expected at 6.9262. The yuan was last at 6.9373 against the greenback, down around 0.3% following Friday's 0.5% retreat.
Data released over the weekend showed that China's foreign exchange reserves fell by $41.1 billion in December to near six-year lows of $3.01 trillion, as authorities stepped in to support the weakening yuan ahead of U.S. President-elect Donald Trump's inauguration.
China has been making great efforts to stabilize its currency ahead of Trump's inauguration on January 20 and the long Lunar New Year holidays at the end of the month by taking actions that affect both onshore and offshore markets.
soirce
ECB to hold steady, Trump takes office
European Central Bank officials are unlikely to make any change in policy on Thursday, while data from the United States will help the Federal Reserve decide whether to immediately follow December's rate increase with another.
Recent data from the euro zone suggests the bloc's economy ended 2016 on a solid footing, and last month the ECB surprised markets by saying it would trim its monthly bond purchases to 60 billion euros ($63.86 billion) starting in April.
So none of the economists polled by Reuters this week expect any change at Thursday's meeting. They were unanimous in saying the ECB's next move, after April's planned cut, will be to taper quantitative easing further [ECILT/EU].
"Next week's ECB meeting should be a non-event. After the December decision to extend QE at a slower pace, the ECB is almost on an autopilot for the rest of 2017," said James Knightley at ING.
However, a rebound in prices in December is reviving calls for the ECB to taper its bond purchases, particularly in Germany. Many Germans feel low rates are eating into their savings and fuelling a property bubble while inflation is already close to the ECB's target of almost 2 percent.
But protectionist sentiment is growing after Britain voted to leave the European Union and Donald Trump won the U.S. presidential election. Several elections in EU countries this year could have far-reaching political ramifications and even threaten the euro zone itself. That is likely to stay the ECB's hand for now.
In the press conference after the policy announcement, ECB President Mario Draghi will probably also face questions over the hacking of his email account during his tenure as governor of the Bank of Italy.
It is not yet clear what the hackers got their hands on. But the idea of a leak of sensitive information ranging from monetary policy to emergency measures for Greece will be of concern.
TRUMP STUMP
ECB officials are growing increasingly worried Trump's victory in the U.S. presidential race may harm the euro zone by hurting trade with the U.S and fuelling populism.
Speaking publicly and behind the scenes, officials emphasize any U.S. shift toward protectionism could hurt the already fragile euro zone economy and pave the way for an even stronger backlash against globalization and the euro project.
Trump gave little new policy information at a press conference on Wednesday, but his protectionist statements have kept many investors from adding to risky positions.
The president-elect has threatened to impose retaliatory tariffs on China, build a wall along the Mexican border and tear up the North American Free Trade Agreement (NAFTA).
Before Trump's inauguration on Friday, and their next policy announcement on Feb. 1, several Fed policymakers are due to speak, and they are likely to send an upbeat message.
Inflation, industrial production and housing-start numbers are all expected to signal a strengthening economy, giving the Fed scope to follow up December's rate increase with more tightening this year.
Its Federal Open Market Committee is expected to hike twice more in 2017 and recent comments from policymakers suggest there could be a third move too. [FED/R]
"The FOMC continues to predict only gradual increases in the federal funds rate, especially given the uncertainty surrounding the economic agenda of Trump's administration," Credit Suisse (SIX:CSGN) economists told clients.
"We continue to see two additional hikes in 2017, but acknowledge that the outlook is subject to change in months ahead."
BEGINNING OF BREXIT
Britain's shock decision in June to leave the European Union has sent sterling tumbling. Although the economy has so far fared better than expected, inflation numbers on Monday will probably show prices jumped in December as imports became more expensive.
Prime Minister Theresa May has said she will trigger Article 50, starting the formal withdrawal from the EU, by the end of March. Many think she will take a hard line on immigration at the cost of Britain's access to the single market, hindering trade.
"The government has sent clear signals that the UK will leave the Single Market, a so-called 'hard Brexit'," said Sarah Hewin at Standard Chartered (LON:STAN).
May is due to speak on Tuesday, setting out the approach her administration will take to Brexit. If she does indicate away from a soft Brexit, sterling will probably fall further.
source
1. US President Trump Commentary
President Trump and Administration officials will be making policy comments during the week.
After being sworn in to office on Friday, market attention will focus on comments surrounding economic policy from the new President and his Administration. Rather than being an individual event, this is likely to be a key focus throughout the first week in office and beyond.
Commentary on fiscal policy will be important with markets looking for hints surrounding a fiscal stimulus and potential tax cuts.
Trade policies will also be an extremely important focus with a particular interest on China. Any rhetoric surrounding the dollar is also likely to move markets, possibly substantially.
Trump’s relationship with the Congress will also be an extremely important area of focus in the short-term given that Trump will need congressional support to pass legislation, while Congressional economic bills will risk being vetoed by Trump.
Any signs of early conflict would tend to undermine risk appetite.
The tone of international leaders will also be an extremely important focus with the main short-term focus on Beijing and Moscow.
Commentary from Fed officials is likely to be extremely limited as the silent period ahead of the following week’s FOMC meeting will begin early in the week.
2. US Q4 GDP
The advance reading of US GDP is due on Friday January 27th at 08:30 EST.
The Bureau of Economic Analysis will release its advance reading of fourth-quarter GDP and any revisions to previous data.
The headline release will inevitably trigger a significant short-term market reaction, although the immediate impact on Federal Reserve policy should be limited unless the data is sharply different from expectations. A notably strong release would trigger some speculation that the Fed will look to raise rates at the March FOMC meeting, while weakness would dampen immediate pressures.
The Fed will be looking at investment components closely given recent weakness and evidence of a firm recovery in capital spending would boost confidence in the underlying outlook. Price deflators will also be monitored closely for any evidence of upward pressure on prices.
The political impact of the data will also be important as the new Administration takes office. A stronger than expected release would tend to lessen immediate pressure for fiscal action to boost the outlook, while weaker than expected data would be likely to trigger a more urgent action as well as more aggressive rhetoric from Trump.
3. UK Supreme Court Ruling
The UK Supreme Court is due to give its ruling on whether the UK government needs parliamentary approval before triggering Article 50 on Tuesday January 24th.
The government lost its case in the High Court at the beginning of November before appealing the judgement. The consensus is that the government will lose the appeal by a majority verdict, although a surprise verdict is possible.
The impact of the ruling has been diminished slightly by Prime Minister May’s recent speech on Brexit policy.
Markets had been looking for parliamentary involvement in the triggering of Article 50 to lessen the risk of a ‘hard’ Brexit, but events have moved beyond this and it is very unlikely that the Labour opposition would block the triggering of Article 50.
There is, however, a risk that a Supreme Court ruling against the government would lead to further legal challenges. In this context, the bigger risk for Sterling is that the triggering of Article 50 could be delayed beyond the end of March, which would increase economic risks.
The most important aspect of the ruling will, therefore be whether it increases or decreases uncertainty.
The UK Q4 GDP data is due for release on Thursday 26th.
4. Australia CPI Data
The latest Australian CPI data will be released on Wednesday January 25th local time (19:30 EST Tuesday).
Headline data and the trimmed mean underlying data are both due for release.
With Australian CPI data only released quarterly, the data tends to have a larger impact on market sentiment and yield expectations.
The latest Melbourne Institute (MI) inflation gauge recorded an increase in prices of 0.5% for December from 0.1% the previous month, which suggests a significant upturn in overall inflation pressures.
The data overall will have an important impact on Reserve Bank of Australia expectations and firm quarterly data would be likely to rule out the potential for any further cuts in interest rates.
An extremely strong report would trigger some speculation over higher rates within the next six months. Weaker than expected data would put additional pressure on the fourth-quarter GDP data due on March 1st.
5. Eurozone PMI Data
The flash Eurozone PMI data will be released on Tuesday January 24th at 04:00 EST.
The French and German data will be released at 03.00 and 03.30 EST respectively.
The latest round of PMI releases for the Eurozone will have an important impact on the economic and monetary policy outlook.
During the fourth quarter, there was evidence of a significant recovery in the Eurozone economy with the composite output index at the highest level for over 5 years.
Input prices rose at the fastest pace for over five years, while the increase in output prices was the fastest since July 2011, although prices dipped in France and Italy.
In his press conference after the ECB policy meeting, President Draghi stated that there had still not been a convincing upturn in inflation and that inflation needed to be rising across all countries.
A further strengthening in activity for January and upward pressure on prices would make it more difficult for the ECB to maintain its current stance. There would also be a further increase in opposition from within Germany with both the government and Bundesbank very uneasy over current policies.
Weak data would increase concerns surrounding the outlook and increase political tensions.
source
Rebel Socialist Hamon seen winning French primary first round: partial results
Benoit Hamon, a former Socialist education minister on the left of the party, led in the first round of a primary to pick a Socialist presidential candidate on Sunday, with more moderate ex-prime minister Manuel Valls in second place, partial results showed.
Hamon, 48, who was sacked under the government of President Francois Hollande for criticizing his economic policies, had won 35.2 percent of the vote and Valls about 31 percent with just over a third of the total votes counted.
If the final count confirms this result, the two men will go face-to-face in a Jan. 29 runoff to decide who will be the Socialist candidate in the April-May presidential election.
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was down around 0.5% at 100.25 by 5:55AM ET (10:55GMT), after falling to 100.17 earlier, a level not seen since December 8.
The dollar sold off amid disappointment that U.S. President Donald Trump’s inauguration speech on Friday proved light on detail over his plans for economic stimulus.
Against the yen, the dollar was down about 1% at 113.51, edging back toward a seven-week low of 112.57.
Meanwhile, the euro gained around 0.4% to 1.0741, its highest since December 8.
Elsewhere, the British pound firmed almost 0.8% to 1.2469, its strongest level since December 19.
Investors will be closely watching the first official Trump administration press briefing on Monday. President Trump is scheduled to appear at 1:30PM ET (18:30GMT).
Looking ahead, there is expected broad market caution as Trump will likely start rolling out executive orders in coming days.
The U.S. President said Sunday he would start talks with Mexico and Canada to renegotiate the North American Free Trade Agreement (NAFTA). Additionally, Trump said he would pull the U.S. out of the Trans-Pacific Partnership (TPP).
2. Global stocks slump after Trump's protectionist remarks
U.S. stock market futures pointed to a lower open on Monday morning, after U.S. President Donald Trump struck a protectionist tone in his inaugural address on Friday, disappointing investors who hoped to hear further details on his promises of tax cuts and other stimulus.
Meanwhile, European equities pushed lower in morning trade, after newly sworn-in U.S. President Donald Trump announced plans to implement a protectionist agenda.
Earlier, in Asia, markets ended mostly lower, with the Shanghai Composite in China closing up around 0.6%, while Japan's Nikkei slumped 1.3%.
3. McDonald's, Yahoo earnings ahead
Dow component McDonald’s (NYSE:MCD) is set to report fourth quarter earnings ahead of Monday's opening bell. Analysts expect the fast food giant to report earnings of about $1.41 per share on $5.99 billion in revenue.
After the bell, Yahoo (NASDAQ:YHOO) is scheduled to release its latest round of quarterly and full-year earnings. Analysts on average expect Yahoo to report earnings of 11 cents a share. After adjustments for stock-based compensation and other factors, analysts project profit of 21 cents a share.
4. Gold rallies to 2-month peak as dollar stumbles
Gold prices rallied to the strongest level in around two months on Monday, as the U.S. dollar tumbled amid uncertainty around the economic policies of new U.S. President Donald Trump.
Prices of the yellow metal touched a session high of $1,219.40 a troy ounce, a level not seen since November 22. It was last at $1,214.50, up almost $10.00, or 0.8%.
5. Oil starts the week lower as rising U.S. drilling activity weighs
Oil prices declined on Monday, as prospects of rising U.S. production weighed on the market.
U.S. crude was down 75 cents, or about 1.4%, to $52.48, while Brent lost 65 cents, or nearly 1.2%, to $54.84 a barrel.
Oilfield services provider Baker Hughes said Friday that the number of rigs drilling for oil in the U.S. last week jumped by 29 to 551, the largest weekly increase since a recovery in the rig count began in June and the highest level in around 14 months.
The data raised concerns that the ongoing rebound in U.S. shale production could derail efforts by other major producers to rebalance global oil supply and demand.
source
‘Godfather’ of chart analysis says Trump rally has another 5% pop left
The headline is from a Market Watch article
A global equities rally continued on Thursday, as investors embraced riskier assets after the Dow topped 20,000 for the first time amid optimism over President Donald Trump’s policies and a solid round of corporate earnings.
U.S. stock market futures pointed to a higher open on Thursday morning, with the Dow plowing further above the 20,000-level, as investors eyed more earnings and data on weekly jobless claims and new home sales.
Meanwhile, European equities moved higher in morning trade, hitting the strongest level in about a year.
Earlier, in Asia, markets rose to 3-1/2-month highs, boosted by strong overnight gains on Wall Street.
2. Another big day of U.S. earnings ahead
U.S. fourth-quarter corporate earnings season continues to gather pace on Thursday, with majors such as Caterpillar (NYSE:CAT), Ford (NYSE:F), Fiat Chrysler (NYSE:FCAU), Comcast (NASDAQ:CMCSA), Biogen (NASDAQ:BIIB) and Bristol-Myers Squibb (NYSE:BMY) all set to report ahead of the opening bell.
After the close, Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Intel (NASDAQ:INTC), PayPal (NASDAQ:PYPL) and Starbucks (NASDAQ:SBUX) are on tap.
3. Dollar bounces back from 7-week lows
The U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.35% at 100.26 in New York morning trade.
It fell to 99.77 overnight, a level not seen since December 8, amid concerns over President Donald Trump's protectionist stance.
Trump signed executive orders on immigration on Wednesday, including one of border security and the intent to build a wall along the U.S.-Mexico border. The president is also planning 'extreme vetting' of visa applications and a temporary ban on virtually all refugee admissions into the U.S. as early as today.
Against the yen, the dollar was up about 0.9% at 114.35, pulling away from a seven-week low of 112.53 touched earlier this week.
Meanwhile, the euro fell around 0.3% to 1.0717, pulling back from a seven-week peak of 1.0772.
4. U.K. economy grew 0.6% in final three months of 2016
Britain's economy maintained its robust momentum in the final three months of 2016, again wrong-footing expectations that June's vote to leave the European Union would rapidly take its toll on growth.
Preliminary data showed that Britain's economy expanded 0.6% in the fourth quarter of last year, maintaining the above-average pace seen in the first three months after June's Brexit referendum.
Compared with a year earlier, the economy grew 2.2%, according to the Office for National Statistics.
5. Johnson & Johnson to buy Actelion for $30 billion
U.S. healthcare giant Johnson & Johnson (NYSE:JNJ) will acquire Swiss biotech company Actelion Ltd (SIX:ATLN) in a $30 billion all-cash deal that includes spinning off Actelion's research and development pipeline, the companies said on Thursday.
The acquisition gives J&J access to the Swiss group's line-up of high-price, high-margin medicines for rare diseases, helping it diversify its drug portfolio as its biggest product, Remicade for arthritis, faces cheaper competition.
Germany December import price index mm +1.9% vs +1.3% exp
Germany December import price index data 27 Jan