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Market news

14 January 2020
  • 23:30

    Schedule for today, Wednesday, January 15, 2020

    Time Country Event Period Previous value Forecast
    00:30 Japan BOJ Governor Haruhiko Kuroda Speaks
    06:00 Japan Prelim Machine Tool Orders, y/y December -37.9%
    07:45 France CPI, y/y December 1.0% 1.4%
    07:45 France CPI, m/m December 0.1% 0.4%
    08:40 United Kingdom MPC Member Saunders Speaks
    09:30 United Kingdom Producer Price Index - Input (YoY) December -2.7% -0.7%
    09:30 United Kingdom Producer Price Index - Input (MoM) December -0.3% 0.3%
    09:30 United Kingdom Producer Price Index - Output (YoY) December 0.5% 0.9%
    09:30 United Kingdom Producer Price Index - Output (MoM) December -0.2% 0%
    09:30 United Kingdom Retail Price Index, m/m December 0.2% 0.4%
    09:30 United Kingdom HICP ex EFAT, Y/Y December 1.7%
    09:30 United Kingdom Retail prices, Y/Y December 2.2% 2.3%
    09:30 United Kingdom HICP, m/m December 0.2% 0.2%
    09:30 United Kingdom HICP, Y/Y December 1.5% 1.5%
    10:00 Eurozone Industrial production, (MoM) November -0.5% 0.3%
    10:00 Eurozone Industrial Production (YoY) November -2.2% -1.1%
    10:00 Eurozone Trade balance unadjusted November 28 23.3
    13:30 U.S. NY Fed Empire State manufacturing index January 3.5 3.5
    13:30 U.S. PPI, m/m December 0% 0.2%
    13:30 U.S. PPI, y/y December 1.1% 1.3%
    13:30 U.S. PPI excluding food and energy, Y/Y December 1.3% 1.3%
    13:30 U.S. PPI excluding food and energy, m/m December -0.2% 0.2%
    15:30 U.S. Crude Oil Inventories January 1.164 -0.75
    16:00 U.S. FOMC Member Harker Speaks
    18:00 Germany German Buba President Weidmann Speaks
    19:00 U.S. Fed's Beige Book
    23:50 Japan Core Machinery Orders November -6% 3.2%
    23:50 Japan Core Machinery Orders, y/y November -6.1% -5.4%
  • 22:01

    New Zealand: Food Prices Index, y/y, December 2.4%

  • 20:50

    Schedule for tomorrow, Wednesday, January 15, 2020

    Time Country Event Period Previous value Forecast
    00:30 Japan BOJ Governor Haruhiko Kuroda Speaks
    06:00 Japan Prelim Machine Tool Orders, y/y December -37.9%
    07:45 France CPI, y/y December 1.0% 1.4%
    07:45 France CPI, m/m December 0.1% 0.4%
    08:40 United Kingdom MPC Member Saunders Speaks
    09:30 United Kingdom Producer Price Index - Input (YoY) December -2.7% -0.7%
    09:30 United Kingdom Producer Price Index - Input (MoM) December -0.3% 0.3%
    09:30 United Kingdom Producer Price Index - Output (YoY) December 0.5% 0.9%
    09:30 United Kingdom Producer Price Index - Output (MoM) December -0.2% 0%
    09:30 United Kingdom Retail Price Index, m/m December 0.2% 0.4%
    09:30 United Kingdom HICP ex EFAT, Y/Y December 1.7%
    09:30 United Kingdom Retail prices, Y/Y December 2.2% 2.3%
    09:30 United Kingdom HICP, m/m December 0.2% 0.2%
    09:30 United Kingdom HICP, Y/Y December 1.5% 1.5%
    10:00 Eurozone Industrial production, (MoM) November -0.5% 0.3%
    10:00 Eurozone Industrial Production (YoY) November -2.2% -1.1%
    10:00 Eurozone Trade balance unadjusted November 28 23.3
    13:30 U.S. NY Fed Empire State manufacturing index January 3.5 3.5
    13:30 U.S. PPI, m/m December 0% 0.2%
    13:30 U.S. PPI, y/y December 1.1% 1.3%
    13:30 U.S. PPI excluding food and energy, Y/Y December 1.3% 1.3%
    13:30 U.S. PPI excluding food and energy, m/m December -0.2% 0.2%
    15:30 U.S. Crude Oil Inventories January 1.164 -0.75
    16:00 U.S. FOMC Member Harker Speaks
    18:00 Germany German Buba President Weidmann Speaks
    19:00 U.S. Fed's Beige Book
    23:50 Japan Core Machinery Orders November -6% 3.2%
    23:50 Japan Core Machinery Orders, y/y November -6.1% -5.4%
  • 20:00

    DJIA +0.20% 28,965.75 +58.70 Nasdaq -0.10% 9,264.23 -9.70 S&P -0.08% 3,285.55 -2.58

  • 17:01

    European stocks closed: FTSE 100 7,622.35 +4.75 +0.06% DAX 13,456.49 +4.97 +0.04% CAC 40 6,040.89 +4.75 +0.08%

  • 16:00

    U.S. consumer price inflation: Steady as she goes - Wells Fargo

    Analysts at Wells Fargo Securities note that consumer prices rose 0.2% in December, pushing the year-ago rate up to 2.3%. Excluding food and energy, however, the trend in inflation is little changed and suggests no need for the Fed to alter its course on policy.

    • "The inflation picture looks little changed in light of December's CPI data. Consumer prices rose 0.2% in the final month of the year, bringing the year-ago rate up to 2.3%, but there were few signs that the underlying trend in inflation is strengthening.
    • As expected, higher gasoline prices over the month gave the headline a boost. Meanwhile, a modest pickup in food prices stemmed largely from larger price hikes for food services, with food away from home prices up 3.1% over the past year versus a 0.7% increase at grocery stores.
    • Stripping out food and energy, prices are also up 2.3% over the past year - on par with the rate registered in October and November. On a monthly basis, however, core inflation cooled a touch with an increase of 0.11%. Even as tariffs on the last tranche of goods from China were avoided in December, tariffs on roughly two-thirds of consumer goods imports from China remain in place. The impact to goods inflation, however, not only remains minimal, but is also fading. Price changes for the goods categories that most closely correspond to items subject to tariffs added only 0.02 point to the 12-month change in prices in December, down from nearly 0.1 point as recently as this summer.
    • Services continue to underpin core inflation. Shelter costs eased up in December, but much of the softness came from a 1.8% decline in the volatile lodging away from home category. In the similarly volatile services category of airfare, prices fell 1.6%-the largest drop in two and a half years. Primary housing costs posted another soft gain. Given the tight rental market and modest pickup in home price appreciation, however, we do not expect shelter inflation to weaken materially. At the same time, medical care services costs have been trending higher, rising another 0.4% in December.
    • On net, the CPI shows that the trend in inflation remains steady. While the Fed's preferred measure of core inflation, the core PCE deflator, has fallen back in recent months, more telling of the underlying trend is the Dallas Fed's Trimmed Mean, which strips out the most extreme price changes among items in a given month rather than solely removing food and energy. It remains right at the Fed's target at 2.0% and, along with core CPI, suggests that while inflation may not be taking off it is not capitulating either.
    • As a result, there does not appear to be a need for the Fed to add additional accommodation at this time for the sake of boosting inflation. But with wage growth softening recently and Fed officials hinting at a desire for the core PCE deflator to overshoot for a period, taking back last year's insurance cuts remains a distant prospect."

  • 15:36

    GBP sees re-evaluation – Rabobank

    Jane Foley, the senior FX strategist at Rabobank, notes that the weekend comments from MPC member Vlieghe were the third set of dovish remarks from a BoE policymaker since the start of the year after those last week from Governor Carney and Tenreyro.

    • "The remarks have been followed by yesterday's releases of poor UK production figures and weaker than expected November UK GDP data which at -0.3% m/m reinforces the fact that the domestic economy is growing below trend. Insofar as CPI inflation at 1.5% y/y currently is also lower than the Bank's 2.0% inflation forecast and recent retailing surveys have been soft, the market is considering the likelihood that the January 30 MPC meeting could be bring a potential change in interest rate policy. This view has been clearly reflected in the drop in the value of GBP.
    • Having broken below the GBP/USD 1.30 level yesterday, cable dipped as far as 1.2950 this morning before pushing back to 1.30. Despite this bounce, we see risk that unless forthcoming UK economic data releases surprise to the upside, cable could soon set its sights on the post-election low close to 1.2905.
    • Since PM Johnson became PM, the market has taken a consistently more optimistic outlook on GBP on the expectations that political uncertainty in the UK would decline. CFTC speculators' data show that net positions have been positive for the past three weeks which is the longest run since the middle of 2018. That said, already GBP has given back a significant proportion of its post-election gains.
    • In view of perceived rate cut risk and given that the UK and the EU still have to hammer out their future relationship, some of this optimism could be misplaced. Given the soft economic backdrop, we maintain our view that GBP/USD could struggle to hold levels above 1.30 on a 3- to 6-month view unless solid progress is made in the UK/EU future relationship talks."

  • 15:02

    U.S. inflation and squeeze on household spending power - ING

    James Knightley, the Chief International Economist at ING, notes that U.S. inflation was a touch softer than expected in December, but with headline and core CPI still running at 2.3% year-on-year, and wage growth having moderated to 2.9%, there is a squeeze on household spending power.

    • "December US consumer price inflation rose 0.2% month-on-month at the headline level and 0.1% at the core (ex food and energy), both of which were a tenth of a percentage point lower than expected. The main surprise is the softness in the housing component, which rose just 0.1% despite the more positive newsflow on residential property in recent months. Note also in the chart below the slowdown in the core goods component, which suggests the inflation impulse from tariffs has already faded. Most other components were broadly in line with their recent trends although medical care remains an outlier with another strong gain (0.6% MoM) to leave prices for this component up 4.6% YoY.
    • This means the annual rate of headline inflation is now 2.3% versus 2.1% in November, while the core rate remains at 2.3%. Headline inflation is going to be volatile as a result of the fluctuations in energy prices, but in general we expect these annual inflation rates to largely be rangebound between 2-2.4% this year. A strengthening residential property market could see inflation rates in the key housing component rise, but the slowdown in wage growth should keep broader service sector inflation in check, as business cost increases remain muted.
    • Moreover, while there has been a slight tick up in market expectations for inflation, consumer expectations continue to moderate and are at record lows for 5-10Y ahead, according to the University of Michigan sentiment index. This gives the Federal Reserve plenty of flexibility to adjust to any shocks in the economy.
    • We are a little more wary about what this all means for consumer spending. Given unemployment is at 50-year lows and firms continue to talk of a lack of skilled workers to fill vacancies we should really be seeing wages move higher. Instead, last Friday's jobs report showed wage growth of just 2.9% - the weakest since July 2018 - after having been as high as 3.4% just 11 months ago. In consequence, with real wage growth being squeezed lower and employment growth also expected to moderate after a decent run in mid-late 2019, we think it unlikely that consumer spending will be a particularly strong growth driver this year. As such, we continue to have a tendency to be a little less optimistic than the market on GDP growth (1.7% for this year) and have a bias to lower Treasury yields in the medium term."

  • 14:33

    U.S. Stocks open: Dow -0.05%, Nasdaq -0.08%, S&P -0.10%

  • 14:23

    Canada sees improvement in Q4 business sentiment – RBC

    Josh Nye, the senior economist at the Royal Bank of Canada (RBC), notes that yesterday's Canadian Business Outlook Survey showed a modest improvement in sentiment in the late stages of 2019, suggesting a recent run of soft data overstated the economy's slowdown in H2/19.

    • "Indicators of future sales strengthened and hiring intentions picked up, though the capex outlook softened after some large projects were completed. Concerns about trade tensions were less prevalent (even though the survey period closed slightly before a US-China phase-one deal was reached, Brexit was sorted out, and odds of USMCA ratification rose) though concerns about US protectionism remained. Perhaps most significantly for the BoC, the economy appears to be operating close to full employment outside the Prairies with firms continuing to report capacity pressures and labour shortages. Even in the Prairies, where sales growth slowed further, there were reports that the energy sector may have bottomed out toward the end of last year.
    • An improvement in business sentiment in Q4 and indications the economy remains close to full capacity give the BoC reason to discount some of the soft economic data we saw in late-2019. So while the BoC looks set to mark down its Q4/19 GDP growth forecast in January, its tone likely won't be as pessimistic."

  • 14:22

    Before the bell: S&P futures -0.03%, NASDAQ futures -0.01%

    U.S. stock-index futures traded flat on Tuesday as investors decided to take a breather following a record rally, despite a good start to fourth-quarter earnings season.


    Global Stocks:

    Index/commodity

    Last

    Today's Change, points

    Today's Change, %

    Nikkei

    24,025.17

    +174.60

    +0.73%

    Hang Seng

    28,885.14

    -69.80

    -0.24%

    Shanghai

    3,106.82

    -8.75

    -0.28%

    S&P/ASX

    6,962.20

    +58.50

    +0.85%

    FTSE

    7,630.75

    +13.15

    +0.17%

    CAC

    6,037.44

    +1.30

    +0.02%

    DAX

    13,458.31

    +6.79

    +0.05%

    Crude oil

    $58.56


    +0.83%

    Gold

    $1,543.20


    -0.48%

  • 14:03

    BoE: January seems too soon for rate cut – TDS

    Jacqui Douglas, the chief European macro strategist at TD Securities, notes that markets see about a 50% chance that the BoE delivers a rate cut at Carney's final meeting on 30 January and TD's odds are not far behind at 40%.

    • "We believe that the BoE will remain on hold, though with a tighter 6-3 vote. The post-election survey data should be sufficient to support the view that growth will recover as uncertainty fades. But the scale of recovery is likely to be limited, given the difficult trade negotiations to come. So the odds of a rate cut will remain elevated through at least the middle of the year.
    • Rates: Timing of any policy cuts by the BoE remains extremely tricky as markets await to see more post-election data releases. Rates markets are more likely to remain range-bound from here. Furthermore, we think its less likely that they will fade this extreme price action in the weeks ahead of the meeting.
    • FX: Our expectation for an on-hold policy decision should help stem further GBP weakness, although a strong signal that a rate cut was in the pipeline at a future meeting would return our attention to downside risks. In the absence of this, we think investors will remain focused on political risks as the Brexit process begins its next phase. All else equal, this points to two-way risks against the USD but we continue to like GBP on certain key crosses, such as the CHF."

  • 13:59

    Wall Street. Stocks before the bell

    (company / ticker / price / change ($/%) / volume)


    ALCOA INC.

    AA

    19.8

    0.19(0.97%)

    3104

    ALTRIA GROUP INC.

    MO

    50.74

    -0.02(-0.04%)

    149

    Amazon.com Inc., NASDAQ

    AMZN

    1,888.84

    -2.46(-0.13%)

    16596

    American Express Co

    AXP

    128.4

    -0.14(-0.11%)

    608

    AMERICAN INTERNATIONAL GROUP

    AIG

    52.63

    0.01(0.02%)

    150

    Apple Inc.

    AAPL

    316.92

    -0.04(-0.01%)

    622704

    AT&T Inc

    T

    38.12

    0.02(0.05%)

    27049

    Chevron Corp

    CVX

    116.6

    -0.06(-0.05%)

    792

    Cisco Systems Inc

    CSCO

    48

    0.03(0.06%)

    48352

    Citigroup Inc., NYSE

    C

    80.98

    0.33(0.41%)

    359575

    Exxon Mobil Corp

    XOM

    69.68

    -0.12(-0.17%)

    12791

    Facebook, Inc.

    FB

    221.7

    -0.21(-0.09%)

    59242

    Ford Motor Co.

    F

    9.22

    -0.02(-0.22%)

    17382

    Freeport-McMoRan Copper & Gold Inc., NYSE

    FCX

    13.4

    -0.08(-0.59%)

    114683

    General Electric Co

    GE

    12.16

    0.04(0.33%)

    152695

    General Motors Company, NYSE

    GM

    35.07

    0.09(0.26%)

    5510

    Goldman Sachs

    GS

    246.85

    1.64(0.67%)

    25272

    Home Depot Inc

    HD

    223.8

    0.46(0.21%)

    2202

    HONEYWELL INTERNATIONAL INC.

    HON

    181.49

    0.22(0.12%)

    700

    Johnson & Johnson

    JNJ

    145.74

    0.04(0.03%)

    955

    JPMorgan Chase and Co

    JPM

    138.55

    1.35(0.98%)

    429071

    McDonald's Corp

    MCD

    206.57

    0.06(0.03%)

    621

    Microsoft Corp

    MSFT

    163.19

    -0.09(-0.06%)

    863662

    Nike

    NKE

    102.41

    0.25(0.24%)

    9941

    Pfizer Inc

    PFE

    39.6

    0.19(0.48%)

    18031

    Tesla Motors, Inc., NASDAQ

    TSLA

    542.02

    17.16(3.27%)

    1048704

    Twitter, Inc., NYSE

    TWTR

    32.73

    0.04(0.12%)

    24362

    United Technologies Corp

    UTX

    150.01

    -2.04(-1.34%)

    389

    Visa

    V

    196.53

    1.20(0.61%)

    20663

    Wal-Mart Stores Inc

    WMT

    116

    0.12(0.10%)

    19552

    Walt Disney Co

    DIS

    143.61

    -0.27(-0.19%)

    12002

    Yandex N.V., NASDAQ

    YNDX

    44.36

    0.06(0.14%)

    7829

  • 13:46

    Initiations before the market open

    DuPont (DD) initiated with a Buy at Gordon Haskett; target $71

  • 13:46

    Downgrades before the market open

    Apple (AAPL) downgraded to Underweight from Neutral at Atlantic Equities; target $275

    Freeport-McMoRan (FCX) downgraded to Underperform from Neutral at Credit Suisse; target lowered to $10

  • 13:40

    U.S. consumer prices up 0.2 percent in December

    The Labor Department announced on Tuesday the U.S. consumer price index (CPI) rose 0.2 percent m-o-m in December after an unrevised 0.3 percent m-o-m gain in the previous month.

    Over the last 12 months, the CPI climbed 2.3 percent y-o-y last month, following an unrevised 2.1 percent m-o-m jump in the 12 months through November. That was the highest annual inflation since October 2018.

    Economists had forecast the CPI to increase 0.3 percent m-o-m and 2.3 percent y-o-y in the 12-month period.

    According to the report, the indexes for gasoline (+2.8 percent m-o-m), shelter (+0.2 percent m-o-m), and medical care (+0.6 percent m-o-m) all rose in December, accounting for most of the gain in the seasonally adjusted all items index. The food index also went up in December (+0.2 percent m-o-m).

    Meanwhile, the core CPI excluding volatile food and fuel costs edged up 0.1 percent m-o-m in December, following a 0.2 percent m-o-m advance in the previous month.

    In the 12 months through December, the core CPI surged 2.3 percent, the same pace as in the 12 months ending November.

    Economists had forecast the core CPI to rise 0.2 percent m-o-m and 2.3 percent y-o-y last month.

  • 13:30

    U.S.: CPI, Y/Y, December 2.3% (forecast 2.3%)

  • 13:30

    U.S.: CPI excluding food and energy, Y/Y, December 2.3% (forecast 2.3%)

  • 13:30

    U.S.: CPI excluding food and energy, m/m, December 0.1% (forecast 0.2%)

  • 13:30

    U.S.: CPI, m/m , December 0.2% (forecast 0.3%)

  • 13:17

    Company News: Citigroup (C) quarterly results beat analysts’ forecasts

    Citigroup (C) reported Q4 FY 2019 earnings of $1.90 per share (versus $1.64 in Q4 FY 2018), beating analysts' consensus estimate of $1.83.

    The company's quarterly revenues amounted to $18.378 bln (+7.3% y/y), beating analysts' consensus estimate of $17.952 bln.

    С rose to $81.55 (+1.12 %) in pre-market trading.

  • 13:11

    Company News: Wells Fargo (WFC) quarterly results miss analysts’ estimates

    Wells Fargo (WFC) reported Q4 FY 2019 earnings of $0.93 per share (versus $1.21 in Q4 FY 2018), missing analysts' consensus estimate of $1.10.

    The company's quarterly revenues amounted to $19.860 bln (-5.4% y/y), missing analysts' consensus estimate of $20.114 bln.

    WFC fell to $50.71 (-2.69%) in pre-market trading.

  • 13:06

    China's trade surplus came in at $46.79 billion in December – TDS

    Analysts at TD Securities note that China's December exports increased by 7.6% YoY (TD 7.6%, market 2.9%), while imports surged by 16.3% YoY (TD 17%, market 9.6%).

    • "The trade surplus came in at $46.79bn compared to $38.73bn previously. As we highlighted, positive surprise was supported by firmer trade with Korea, base effects and improving PMI components, particularly export orders.
    • The trade surplus with the US was $23.2bn in December, with the rolling 12m surplus narrowing further to $295.4bn, the smallest since July 18, reflecting the impact of tariffs on US-China trade."

  • 12:39

    EU's chief Brexit negotiator Barnier: We must not underestimate direct consequences of doing away with freedom of movement between UK and EU

    • We will not accept any veiled discrimination of citizens' rights
    • UK must implement strong, independent monitoring of EU citizens' rights, complaints

  • 12:35

    Company News: JPMorgan Chase (JPM) quarterly results beat analysts’ expectations

    JPMorgan Chase (JPM) reported Q4 FY 2019 earnings of $2.57 per share (versus $1.98 in Q4 FY 2018), beating analysts' consensus estimate of $2.36.

    The company's quarterly revenues amounted to $28.300 bln (+8.4% y/y), beating analysts' consensus estimate of $27.694 bln.

    JPM rose to $139.40 (+1.60%) in pre-market trading.

  • 12:28

    Global economy expected to witness a “V-shaped” recovery – Westpac

    Richard Franulovich, the head of FX strategy at Westpac, notes that New Year has produced material downside surprises in two of the most widely watched U.S. data points with the ISM manufacturing index unexpectedly crumbled to 47.2 in December, while average hourly earnings in the December payrolls report eased back to a 2.9% annual pace.

    • "Given the weak state of US manufacturing implied by the ISM survey the US economy "needs" the consumer to step up. But a slower pace of income creation raises risks for the consumer and underscores a continuing low inflation backdrop.
    • These closely watched data points may be exaggerating the downside risks. A range of other soft surveys such as Markit's manufacturing PMI, the ISM services index and the NFIB small business survey have been much more resilient than the ISM manufacturing index.
    • The labour market is by any reasonable measure still in very good shape too. Payrolls growth remains well above the pace needed to absorb new entrants. A less robust pace of earnings growth no doubt raises risks to consumer spending but a 2.9% annual pace is not too shabby.
    • Elsewhere, various lead indicators signal a potentially decent uplift in global activity in 2020.
    • A simple composite global leading index comprising the US 10y-3m yield curve, the expectations sub-index of the German ZEW survey, Chinese new yuan loan growth and Korea 20-day export growth.
    • It might be too much to expect a true "V-shaped" recovery for the global economy given all the usual risks such as a possible relapse in the US-China trade war, geopolitical hotspots and US election uncertainties, not to mention the serial disappointments over global growth in recent years. That said, at a minimum the ingredients at the very least seem to be in place to make 2020 a potentially better year for the global economy. That should be good news for global growth proxies like the AUD."

  • 12:23

    Company News: Delta Air Lines (DAL) quarterly earnings beat analysts’ forecast

    Delta Air Lines (DAL) reported Q4 FY 2019 earnings of $1.70 per share (versus $1.30 in Q4 FY 2018), beating analysts' consensus estimate of $1.39.

    The company's quarterly revenues amounted to $11.439 bln (+6.5% y/y), generally in line with analysts' consensus estimate of $11.373 bln.

    The company also issued downside guidance for Q1 FY 2020, projecting revenues of +5-7% y/y to $11.0-11.2 bln versus analysts' consensus estimate of $11.14 bln.

    For the full FY 2020, the company sees EPS of $6.75-7.75 versus analysts' consensus estimate of $7.19.

    DAL rose to $62.15 (+4.47%) in pre-market trading.

  • 11:58

    BoE: PMI improvement would probably prevent a rate cut in January – ABN AMRO

    Bill Diviney, the senior economist at ABN AMRO, notes that market expectations for a rate cut at the 30 January meeting have surged with a 25bp move now more than 50% priced in, up from just 5% from last week.

    • "The move came after weekend comments from MPC member Gertjan Vlieghe suggested he supported a near-term cut unless there was 'an imminent and significant improvement' in data. He pointed to survey data due at the end of the month, likely referring to the flash PMIs due out on 24 January, as being key inputs to the decision.
    • In favouring a near-term cut, he joins two others (Carney and Tenreyro) who have signaled a willingness to support easing, depending on how quickly confidence returns to the economy, as well as two MPC members who have already voted for a cut (Saunders and Haskell). While the balance on the MPC has clearly shifted to an easing bias, there are signs that confidence might be returning to the extent that it would indeed stave off a move.
    • Most notably, business confidence as measured by the Deloitte survey of CFOs - which was conducted in the election aftermath between 13 December and 6 January - rose by the most in the survey's 11-year history. While this measure of confidence tends to under- and overshoot moves in the PMIs, directionally they historically move in sync. This suggests a considerable improvement in the January flash PMIs, which would probably be enough for the MPC to hold fire at this stage, in our view (although it could be a close call).
    • Further out, we continue to expect relatively muted growth in the UK in 2020, with uncertainty likely to weigh on business sentiment again later in the year as we approach the end of the Brexit transition period, and in the absence of significant progress towards a trade deal."

  • 11:40

    France, UK and Germany confirm in a joint statement they have triggered dispute resolution mechanism in the Iran nuclear deal

    The Joint Statement's abstract:

    "We do not accept the argument that Iran is entitled to reduce compliance with the JCPoA. Contrary to its statements, Iran has never triggered the JCPoA Dispute Resolution Mechanism and has no legal grounds to cease implementing the provisions of the agreement.

    We publicly stated our concerns, along with the High Representative of the European Union, on 11 November. At the Joint Commission on 6 December, we made clear to Iran that unless it reversed course, we would have no choice but to take action within the framework of the JCPoA, including through the Dispute Resolution Mechanism.

    Instead of reversing course, Iran has chosen to further reduce compliance with the JCPoA and announced on 5 January that "the Islamic Republic of Iran, in the fifth step in reducing its commitments, discards the last key component of its limitations in the JCPOA, which is the 'limit on the number of centrifuges'", and that "the Islamic Republic of Iran's nuclear program no longer faces any operational restrictions", including on enrichment and enrichment-related matters.

    We have therefore been left with no choice, given Iran's actions, but to register today our concerns that Iran is not meeting its commitments under the JCPoA and to refer this matter to the Joint Commission under the Dispute Resolution Mechanism, as set out in paragraph 36 of the JCPoA.

    We do this in good faith with the overarching objective of preserving the JCPoA and in the sincere hope of finding a way forward to resolve the impasse through constructive diplomatic dialogue, while preserving the agreement and remaining within its framework. In doing so, our three countries are not joining a campaign to implement maximum pressure against Iran. Our hope is to bring Iran back into full compliance with its commitments under the JCPoA."

  • 11:20

    China's premier Li Keqiang: Will make good use of counter-cyclical policy tools

    • Will keep economic operations within reasonable range this year
    • Will aim for a good start for economic development in the first quarter
    • Will guide financial institutions to strengthen credit support for the manufacturing sector, private firms, small and medium firms
    • Will speed up the issuance of local government special bonds

  • 10:58

    Global growth is likely to broadly moves sideways in 2020 – TDS

    James Rossiter , Head of Global Macro Strategy at TD Securities, expects global growth to broadly move sideways in 2020, returning toward trend in H2.

    "Some recent December indicators point to upside risks, and in general, downside risks to global activity in early 2020 have abated. But it remains too early to take a strong signal from the upside (noisy) signals we see for December. A global economy that moves sideways--rather than softer--into the New Year remains the most likely outcome. For markets, this growth backdrop meets a global real rate that looks set to remain around zero. A reduction of the downside risks and some improvement outside the US reduces the US growth dividend that has helped to benefit the USD. While the global economy lacks acceleration, the sprouting of green shoots and a reduction of trade and Brexit uncertainties should reinforce a positive feedback loop. That should boost risk sentiment over the coming months, offering support to global carry and selective G10 currencies".

  • 10:39

    What are the prospects for the USD in the first quarter - MUFG

    MUFG Research discusses the USD outlook and flags a scope for further gains in Q1 against the JPY, CHF, and CAD.

    "We see strong grounds for reflation optimism being sustained in the coming weeks. In Q4, JPY and CAD were the two worst performing currencies in Q4 when the dollar weakened more broadly and we with the added confidence on the US economy and our view that the Canadian economy will show further weakness both JPY and CAD could renew its Q4 trend of under-performance. So we see the dollar advancing more against negative yielding risk-on currencies like JPY, CHF and to a lesser extent EUR. Renewed reflation optimism however will also benefit EM FX. But in G10 generally we would expect the dollar to perform better than it did in Q4"

  • 10:19

    Oil prices could plummet toward $40 per barrel - JBC Energy

    According to the chairman of an energy research institute, oil prices could plummet toward $40 per barrel if the Iranian regime collapses.

    Johannes Benigni, chairman of JBC Energy, made the comments on CNBC amid continuing unrest in Iran.

    Iran's economy has also been under immense pressure from U.S. sanctions that were reimposed after President Trump withdrew from the 2015 nuclear deal. Former President Barack Obama's national security advisor on Sunday said Iran is closer "than ever before" to a possible collapse in the regime.

    Benigni said a change in leadership in Tehran would have a major impact on energy prices. "For the oil market, it would mean that the likelihood of oil prices dropping towards $40 is very high," he said.

    "Remember Iran could easily add 1.5 million barrels within a shortest period of time. Maybe even 2 million barrels, and that's a lot of oil," he said. On a larger scale, he said there isn't much upside potential for Brent crude.

  • 10:00

    RBS forecasts Bank of England interest rate cut this month

    Royal Bank of Scotland Group Plc changed its Bank of England interest-rate forecast and now sees a cut to 0.5% from 0.75% at this month's meeting. It also sees a second reduction later in the year, having previously predicted no move by the BOE at all until May.

    RBS's change of view may be followed by others after Governor Mark Carney and other policy makers said the BOE is looking at whether more stimulus is needed for the economy. Economic data on Monday showed the U.K. economy unexpectedly shrank in November. The year-on-year rate of 0.6% was the weakest since mid-2012.

    RBS said there's been an "unmistakable underlying deterioration in the U.K. economic data."

  • 09:39

    USD/JPY remains extremely bid near term – Commerzbank

    "The market is approaching a second, more important, downtrend from 2015 which lies at 110.20. This should hold the topside and while it holds, we will maintain an overall longer term bearish bias. Failure at 107.65 is needed to reassert downside pressure to the 106.48 October low and the 105.00 region. Only on a weekly chart close above the 2015- 2019 downtrend line at 110.20 would we question our bearish bias and introduce scope to 114.55, the 2018 high." Karen Jones, analyst at Commerzbank, said.

  • 09:22

    S&P 500 could rise 15% this year - Freedom Asset Management

    Many stock markets globally have continued their strong run into the new year so it's time to start taking some profits, an investor said.

    "I'm actually starting to think about trimming back some of the exceptional gains we had last year and coming through into this," Simon Fentham-Fletcher, chief investment officer at Freedom Asset Management, told CNBC.

    "So from my perspective, yes, I think it is time to start taking 1, 2, 3% off and ... put away some cash (so) that you can come in when there's a 5 to 10% correction," he added.

    Fentham-Fletcher predicted that the S&P 500 could rise by 15% by the end of this year. He said the climb in the stock index will likely be driven by an improvement in corporate earnings amid a still-strong U.S. economy. But if earnings don't recover and continue to slide, the stock market could correct - and investors with some cash on hand could find a window to invest again, he explained.

  • 08:59

    Focus on the Fed and consumer price data today - Rabobank

    "Last week Fed's John Williams said that rates are likely to stay low for an extended period of time due to "demographic changes, slow productivity growth, and demand for safe assets - all of which are unlikely to be reverse any time soon." Potentially dovish remarks from Williams could be counterbalanced by Esther George who voted against all three rate cuts last year. Data wise, US CPI inflation is expected to accelerate to 2.4% y/y in December from 2.1%, but this is unlikely to change the predominant view in the market that the Fed will keep rates unchanged as the risk of a substantial increase in inflationary pressure is relatively low. Investors will be looking for a fresh clues about the state of the US economy in earnings published by various US corporates." analysts at Rabobank said.

  • 08:39

    NZD / USD still fall to 0.6590 in coming weeks – UOB

    "In yesterday's update, we cited that 'it is too early to conclude that the recent decline in NZD has come to an end... rallies are limited to 0.6650'. On Mon, NZD only touched a high of 0.6653 before paring gains to close at 0.6630. Indicators suggest that NZD is not prepared for a big move either ways, so a sideways pattern looks more likely for today. Expect 0.6610 - 0.6655 range. As for тext 1-3 weeks, as highlighted, NZD has found a short-term top and the current pullback could test 0.6590. Looking ahead, if NZD were to breach 0.6590, the pullback could extend to 0.6555. On the upside, only a move above 0.6690 ('strong resistance' level previously at 0.6730) would suggest the current downward pressure has eased," FX Strategists at UOB Group said

  • 08:19

    US consumer price growth likely to accelerated slightly in December - TDS

    According to analysts at TD Securities, the US overall consumer price index was probably boosted by gasoline prices, which were falling a year ago; the 12-month change probably rose to 2.4% from 2.1%.

    "We expect a 0.2% rise in the trend-setting core index. The 12-month change in core probably held at 2.3%, although it is a close call between 2.3% and 2.4%. A 0.22% m/m rise would likely be enough for 2.4%; we have 0.21%. We are allowing for a modest boost to apparel prices from new sampling procedures introduced last year. Gains in core prices have averaged 0.19% per month in the last 12 months. The 12-month change in core prices was 2.2% in December 2018, so there has been slight-just slight-acceleration in the past year."

  • 08:00

    U.S. urged Switzerland ‘to adjust its macroeconomic policies’

    U.S. Treasury Department added Switzerland back to its currency watch list and urged Switzerland "to adjust its macroeconomic policies to more forcefully support domestic economic activity".

    "Despite borrowing costs for the Swiss government being among the lowest in the world, fiscal policy remains underutilized, even within the constraints of Switzerland's existing fiscal rules," U.S. Treasury said.

    The Swiss currency is less than 1% away from the 15-month high it reached in late December as global unease helped spur investor demand for the haven currency.

    The other countries on the Treasury's monitoring list are China, Japan, South Korea, Germany, Italy, Ireland, Singapore, Malaysia and Vietnam. It removed the tag of currency manipulator from China.

    Switzerland met two of the three criteria in the Treasury's report, having a material current account surplus and a significant bilateral trade surplus with the U.S. Switzerland previously was included on the list between October 2016 and October 2018.

  • 07:39

    U.S. Federal Reserve could lower interest rates 3 times this year - UBS

    Swiss wealth giant UBS has predicted that the U.S. Federal Reserve could lower interest rates three times in 2020.

    Arend Kapteyn, global head of economic research at UBS, said that tariffs implemented in the trade war between Washington and Beijing would drag down U.S. growth to just 0.5% year-on-year in the first half of 2020.

    "We think this tariff damage is going to push U.S. growth down ... that's actually going to trigger three Fed cuts, which is way off consensus, nobody believes that," he told CNBC.

    The CME FedWatch tool places the probability of the Fed standing pat on interest rates at more than 50% through September. For the central bank's meetings in November and December, that probability falls to 47% and and 40.5%.

    Kapteyn noted that Fed officials themselves have shown little inclination to make any moves, with meeting minutes indicating that they're at "a comfortable hold" and would want to see "a material downshift in the data" before reassessing their position.

    Still, Kapteyn stressed that the impact from tariffs could just be temporary and that the U.S. is not headed into a recession.

  • 07:20

    What events will be in the focus of the market today? - Danske Bank

    In view of analysts at Danske Bank, today, investors ' attention will be focused on the us inflation data for December, but it is unlikely that they will have an impact on the Fed's position on monetary policy

    "Inflation may return to the spotlight at a later stage, as the Fed struggles to live up to the 2% inflation mandate when looking at PCE core inflation. We expect CPI core inflation to rise 2.3% y/y in line with consensus. In the US, the NFIB small business optimism index has rebounded and remains high. There has been a divergence in business confidence between small and large companies. This makes sense, as smaller companies have been less exposed to slower global growth and trade war risks. We think the small business optimism index will remain upbeat. In the afternoon, we have a few speeches from Fed and ECB policymakers."

  • 07:01

    China imports and exports surge in December

    According to the report from Customs General Administration of China (CGAC), China's exports rose for the first time in five months in December and by more than expected, signalling a modest recovery in demand.

    China's trade surplus narrowed to USD 46.79 billion in December 2019 from USD 56.80 billion in the same month a year earlier and less than market expectations of USD 48.0 billion. Exports rose 7.6 percent year-on-year, while imports grew at a faster 16.3 percent.

    For full year of 2019, the trade surplus widened to USD 424.39 billion from USD 350.9 in a year earlier. For all of 2019, its total exports proved remarkably resilient to trade tensions, rising 0.5%, though that was well off a near 10% gain in 2018, reflecting weaker U.S. sales. Imports fell 2.8% last year as China's economic growth cooled to near 30-year lows, after rising 15.8% in 2018.

  • 06:42

    Options levels on tuesday, January 14, 2020

    EUR/USD

    Resistance levels (open interest**, contracts)

    $1.1275 (2574)

    $1.1241 (3026)

    $1.1216 (1824)

    Price at time of writing this review: $1.1143

    Support levels (open interest**, contracts):

    $1.1082 (4637)

    $1.1042 (4382)

    $1.0996 (1460)

    Comments:

    - Overall open interest on the CALL options and PUT options with the expiration date February, 7 is 47915 contracts (according to data from January, 13) with the maximum number of contracts with strike price $1,1100 (4637);


    GBP/USD

    Resistance levels (open interest**, contracts)

    $1.3193 (1055)

    $1.3159 (1357)

    $1.3104 (907)

    Price at time of writing this review: $1.2991

    Support levels (open interest**, contracts):

    $1.2966 (2669)

    $1.2946 (1158)

    $1.2921 (3096)


    Comments:

    - Overall open interest on the CALL options with the expiration date February, 7 is 23430 contracts, with the maximum number of contracts with strike price $1,3600 (3948);

    - Overall open interest on the PUT options with the expiration date February, 7 is 19824 contracts, with the maximum number of contracts with strike price $1,3000 (3096);

    - The ratio of PUT/CALL was 0.85 versus 0.83 from the previous trading day according to data from January, 13

    * - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

    ** - Open interest takes into account the total number of option contracts that are open at the moment.

  • 05:16

    Japan: Eco Watchers Survey: Outlook, December 45.4 (forecast 44.7)

  • 05:02

    Japan: Eco Watchers Survey: Current , December 39.8 (forecast 36.9)

  • 03:31

    China: Trade Balance, bln, December 46.79 (forecast 48)

  • 02:30

    Commodities. Daily history for Monday, January 13, 2020

    Raw materials Closed Change, %
    Brent 64.43 -1.36
    WTI 58 -1.69
    Silver 17.94 -0.72
    Gold 1548.276 -0.83
    Palladium 2130.6 0.98
  • 00:30

    Stocks. Daily history for Monday, January 13, 2020

    Index Change, points Closed Change, %
    Hang Seng 316.74 28954.94 1.11
    KOSPI 22.87 2229.26 1.04
    ASX 200 -25.3 6903.7 -0.37
    FTSE 100 29.75 7617.6 0.39
    DAX -31.79 13451.52 -0.24
    CAC 40 -0.97 6036.14 -0.02
    Dow Jones 83.28 28907.05 0.29
    S&P 500 22.78 3288.13 0.7
    NASDAQ Composite 95.07 9273.93 1.04
  • 00:15

    Currencies. Daily history for Monday, January 13, 2020

    Pare Closed Change, %
    AUDUSD 0.69025 0.07
    EURJPY 122.407 0.52
    EURUSD 1.11337 0.12
    GBPJPY 142.797 -0.13
    GBPUSD 1.29885 -0.53
    NZDUSD 0.66293 -0.09
    USDCAD 1.30559 0.02
    USDCHF 0.97089 -0.18
    USDJPY 109.935 0.39

Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.

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