Good morning! Here’s what you need to know in the markets on Monday.
China expects to lay off 1.8 million workers in the coal and steel sectors as part of its efforts to reduce industrial overcapacity, an official at the human resources and social security ministry said on Monday.
The price of oil has continued to rise early on Monday, following big gains during last week. The price of crude rose by more than 15% during trading last week, and some indicators now suggest that the market is showing signs of bottoming out.
Asian markets had a pretty rubbish day of trading on Monday. Just before 6:50 a.m. GMT (1:50 a.m. ET) major indices across the continent were in the red. In China, the CSI 300 was down more than 4%, while the Dow Jones Shanghai dropped 3.7%. Japan’s Nikkei was down 1%, while the Hang Seng in Hong Kong fell 1.3%.
Gold is now officially the best performing asset of 2016 so far. The precious metal, traditionally a haven for investors during times of market strife, has seen big gains this year. Bloomberg reports that the 15% rise in the price of gold so far in 2016 puts it top of the tables when it comes to asset performance.
JP Morgan has sacked two important traders over allegations that they didn’t follow the bank’s compliance procedures. The Financial Times reports that Andrew Lombara, head of US Treasury trading, and Chi Lee, a junior Treasury trader were sacked in January, but the reasons for their departures have just emerged.
Saudi Arabia is looking for help from the USA to help its struggling economy. Saudi officials have been contacting big US corporations to try and increase foreign investment in the country’s economy, and boost employment, according to a report from the Financial Times. The country is trying to decrease its reliance on oil, as the price of the commodity remains at historical lows.
A major investment firm believes that the US economy may already be in recession. Kessler Investment Advisors, which specialises in US treasuries, said in a post that “the recent increases in core inflation are normal in the sequence of how a recession evolves.”
China is stopping two of its largest overseas investment schemes. According to the Financial Times, the Chinese government is mothballing the Qualified Domestic Institutional Investor 2 scheme, and the Qualified Domestic Limited Partner scheme. The first of these was designed to allow Chinese citizens to invest in overseas stocks, while the second was meant to allow Western asset managers to sell investments directly to wealthy Chinese citizens.
Manufacturing in Japan expanded for the first time in three months. Factory output expanded 3.7 per cent on month in January, official data showed on Monday, a potential sign of the beginning of a recovery in the country’s economy.
The economic damage caused by rising sea levels is set to rise. According to a study from the Potsdam Institute for Climate Impact Research, the threat of rising sea levels will cost economies progressively more over the coming years.
For example, in Copenhagen, a moderate sea level rise of 11 cm by 2050 from 2010 levels would cause about €1 billion a year in extra damage if no protective action is taken, the study estimated. However, if sea levels rose by 8cm, that figure would nearly quadruple to €4 billion
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