10 things you need to know before markets open in Australia and Asia

Photo: William West/ AFP/ Getty Images.

Good morning. Here’s what’s happening as Friday begins and anticipation builds for US non-farms payroll release.

First, the scoreboard (7:55am AEDT):
• Dow: 19,883 -8 (-0.04%)
• S&P 500: 2280 +0.5 (+0.02%)
• SPI 200 Futures (March): 5,605 -2 (-0.04%)
• AUD/USD: 0.7662 +0.0073 (+1%)

And the news.

1. Trump jitters for markets: US stocks erased losses and were little changed. Still the reflation trade that boosted the greenback, stocks and slammed bonds showed more signs of fading. Blame it on President Donald Trump’s foreign-policy antics and the Federal Reserve’s moves that didn’t help change views on the world economy’s strength. The US dollar fell toward its lowest level since November and the British pound fell after the Bank of England said there’s more slack in the economy than previously thought. Australian stocks are poised to open little changed.

2. Ruble up as US eases some sanctions: The Russian ruble is surging after the US Treasury Department’s Office of Foreign Assets Control published an amendment to former President Barack Obama’s sanctions order against Russia to “authorise certain transactions” with Russia’s Federal Security Service. The new authorization will allow US companies to pay up to $5,000 per year to the FSB — which oversees technology imports into Russia — to secure licenses from the security services to export information technology products to Russia, as long as other aspects of the sanctions order aren’t violated.

3. Data today: Australia has January services index data. Japan releases the minutes of its monetary policy meeting where the nation’s central bank kept rates on hold. Services PMI is also due. Euro area has retail sales and PMIs. The big one though is non farms payroll out of the US. Watch out for a big number, which can confirm the world’s largest economy continues to strengthen.

4. Company news: James Hardie Industries posts earnings. Apollo Global Management and Brookfield Property Partners are among companies reporting earnings in the US.

5. This hedge fund likes Trump: US hedge fund manager Dan Loeb is betting president Donald Trump will be good for investments thanks to his planned mix of tax cuts, reduced regulation, and infrastructure spending. A shift from government monetary stimulus to measures that will increase personal and corporate spending will create lower correlations between various types of securities and greater dispersion of results within them, such as stocks, Loeb said. Separately, Albert Edwards, the über-bearish strategist at Societe Generale, thinks Trump may be on to something with his economic policies.

6. Solid Aussie: The Australian dollar is looking rock solid in early Asian trade on Friday, continuing to benefit from data released on Thursday which revealed that Australian recorded its largest trade surplus on record in December.

AUD/USD Daily Chart

7. Goldman sees Aussie rate hikes coming: Goldman Sachs says the chance of the the Reserve Bank of Australia raising interest rates in November is around 40% and rising. The bank sees three rate rises for the RBA in 2018 and warns the central bank could move sooner.

8. Deals bonanza ahead: Last year’s $3.84 trillion of global M&A was down from the $4.66 trillion in 2015, but historically, 2016 was a very strong year and there were several blockbuster deals announced in the fourth quarter that suggest 2017 could be a banner year ahead. So what do M&A experts think will happen in 2017? Well most of them are optimistic, Here’s why.

9. Passive investing to dominate: Passive investing is set to overtake active management in US market share in just four to seven years. That’s according to Moody’s Investor Services, which said in a report released on February 2 that passively managed funds will have more in assets than active funds by 2024 at the latest.

10. Snap IPO: Snapchat parent company Snap Inc. is planning to officially unveil its initial public offering prospectus this week, setting the wheels in motion for what’s likely to be the largest tech debut in years. Snap was able to confidentially file its paperwork with the Securities and Exchange Commission in November because it has annual revenue of under $1 billion. Once its paperwork, or “S-1,” is made public, potential investors will be able to scrutinise the Los Angeles-based company’s financials for the first time.

And here’s a Friday bonus, central banks’ 15 minutes of fame are coming to an end — but it’s happening for all the wrong reasons