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Good morning. Here’s what you need to know.
- Asian markets were higher in overnight trading, with the Japanese Nikkei rising 2.4 per cent and the Shanghai Composite up 0.5 per cent. European markets are also higher, with Germany and Italy leading the way, both up 2.4 per cent. In the United States, futures point to a positive open.
- HSBC’s flash China PMI manufacturing index fell to 50.4 in February, down from 52.3 the month before. Economists had predicted only a slight tick down to 52.2 on the index. However, they also say the Lunar New Year celebrations heavily distort the February PMI data.
- The first exit polls from the Italian elections are out, and frontrunning centre-left candidate Pier Luigi Bersani is in the lead. Markets are reacting quite favourably to the news.
- Elsewhere in the euro zone, Cyprus also held elections this weekend, seeing the pro-bailout candidate, Nicos Anastasiades, rise to power. The country has been engaged in heated negotiations with the IMF, EU, and ECB troika of creditors for 8 months, as Anastasiades’ predecessor refused to comply with privatizations and other reforms requested in exchange for aid.
- After the closing bell on Friday, Moody’s became the first credit rating agency to strip the U.K. of its AAA rating. The country joins the U.S. and France as major AAA-rated economies to be downgraded by one of the three major raters in recent years. The British pound continued its downward trajectory, falling to a 16-month low on the news.
- The Japanese yen is also falling to start the week after Reuters reported that Haruhiko Kuroda, current head of the Asian Development Bank and an established dove on monetary policy, is likely to take over at the Bank of Japan in March.
- Gold is up 1.2 per cent this morning after enduring a brutal few trading sessions last week. The CFTC’s latest Commitment of Traders report released Friday afternoon revealed that fund managers have put on a record amount of short bets against the shiny yellow metal.
- Over the weekend, the White House released reports detailing the state-by-state effects of the government spending cuts contained in the imminent sequester in a bid to put pressure on Republicans to come to some sort of compromise. Republican House Speaker John Boehner’s office responded, “The White House needs to spend less time explaining to the press how bad the sequester will be and more time actually working to stop it.”
- Apple may be releasing an iPad 5 device in June, according to a case maker who says he has already started manufacturing cases for it based on tips received from supply chain sources. BI’s Jay Yarow writes, “The next iPad is expected to mimic the design of the iPad Mini. It will be thinner and lighter. It will also have a smaller overall size, while maintaining the same 9.7-inch screen.”
- At 10:30 AM ET, the Dallas Fed’s February reading of manufacturing activity is released. Economists predict the index will fall to 3.0 from last month’s 5.5 reading. Follow the release LIVE on Business Insider >
- BONUS: Jennifer Lawrence tripped over her dress while walking onto the stage to accept her Academy Award for Best Actress, while Anne Hathaway’s dress may have been a little revealing in hindsight.