Good morning! Here are the major stories you need to know about in markets today.
Chinese Stocks Are Getting Absolutely Hammered. Just ahead of the close, the Shanghai composite is down 8.31%. Hong Kong’s Hang Seng is down too, 1.96% lower, while Japan’s Nikkei closed up 0.86%.
The Swiss Government Says It Will Weather The Franc’s Surge. Finance Minister Eveline Widmer-Schlumpf said she expects the exchange rate to settle down at around 1.10 per euro, a level she believes firms in the export-orientated country should be able to withstand. The move sent the franc soaring, prompting firms across Switzerland to warn of a plunge in profits, with the luxury, industrial and tourism sectors most exposed.
The Franc May Have Also Wiped Out Everest Capital’s Main Fund. According to Bloomberg, Everest Global Capital, the firm’s main fund, was wiped out in less than a day by the Swiss Franc’s unexpected explosion last week.
More Capital Flowed Out Of Russia In 2014 Than Ever Before. Net outflows by companies and banks reached $US151.5 billion in 2014, more than two times as much as in 2013, according to the Central Bank of Russia. The last time the level of outflows was nearly this high was during the global financial crisis in 2008, when it reached $US133.6 billion.
Plunging Oil Prices Are Complicating The Bank Of Japan’s Stimulus Efforts. Bank of Japan policymakers gathering for a rate review this week face the daunting task of coming up with a reason why they can hold off expanding stimulus for now, as slumping oil prices keep inflation further away from their 2% target. Some expansion of Japan’s QE programme or one of its bank lending schemes is possible on Wednesday.
Rumours And Noise About The ECB’s Thursday Meeting Will Be A Big Deal This Week. The ECB could launch a government bond-buying program with new money as soon as its Jan. 22 meeting. With markets in an unusually febrile state – oil and copper have plunged while the Swiss franc rocketed after Switzerland abandoned its currency cap – it’s a fair bet that if the ECB holds back, there will be an extreme reaction.
China’s Xiaomi Is Buying A Stake In Software Firm Kingsoft From Tencent. China’s Xiaomi
has agreed to buy about 3% of software firm Kingsoft from Tencent Holdings for HK$527 million ($US67.99 million), according to a Kingsoft filing on Monday. The deal with Xiaomi, the world’s third-biggest smartphone maker, is expected to close on Jan. 30.
And China’s Growth Is Expected To Hit A 24-Year Low. China’s annual GDP growth slowed to its weakest rate in more than two decades in 2014, according to an AFP survey, projecting further deceleration in the world’s second-largest economy this year. The median forecast in a poll of 15 economists saw the Asian giant’s GDP expanding 7.3% last year.
Uber Is Vowing To Create 50,000 Jobs In Europe. According to the Financial Times, Uber CEO Travis Kalanick said that he understood the need to some regulation of the firm, and promised to produce 50,000 jobs in an overture to European countries hit by high unemployment
President Obama Wants To Levy More Taxes From The Wealthiest Americans. President Barack Obama’s State of the Union address will propose closing multi-billion-dollar tax loopholes used by the wealthiest Americans, imposing a fee on big financial firms and then using the revenue to benefit the middle class, senior administration officials said on Saturday.