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Good morning. Here’s what you need to know.
- Asian markets were up in overnight trading with the Shanghai Composite rallying over 3 per cent after the country eased capital controls. Europe is higher and U.S. markets have opened flat.
- Chinese stocks surged on reports that chairman of the China Securities Regulatory Commission (CSRC) said the country can now boost investment quotas for Renminbi Qualified Foreign Institutional Investment (RQFII) and QFII by a factor of 10. China first announced an increase in RQFII back in November and the country has announced a few capital account reforms since the leadership handover.
- Apple shares are down 4 per cent in pre-market trading after the WSJ reported that the company is cutting orders for iPhone 5 iPhone 5 after weak demand.
- Politico’s Mike Allen and Jim Vandhei report that comments from inside the House show that Republicans are gearing up for a debt ceiling fight to force spending cuts. More than half of Republicans are reportedly willing to allow a default, and reports suggest that the White House doesn’t realise how difficult it will be to talk “restive conservatives off the fiscal ledge”. Meanwhile, the White House ruled out the trillion dollar coin option to end the debt ceiling stalemate this weekend. Gary Shilling: Here are 10 ways to invest in the ‘Grand Disconnect’.
- In M&A news, UPS is dropping its $7 billion bid for Dutch delivery company TNT Express on expectations that the EU will veto such a deal. Meanwhile, Swatch is buying luxury watchmaker and jeweler Harry Winston for $1 billion.
- The Japanese yen fell to the lowest level since 2010 to as low as 89.67 per dollar. This is ahead of Bank of Japan Governor Masaaki Shirakawa’s speech tomorrow and on speculation of more monetary stimulus. JP Morgan presents 7 interesting market stories that are lurking beneath the surface.
- Eurozone industrial output fell 3.7 per cent year-over-year in November, the biggest decrease since November 2009. Output was down 0.3 per cent month-over-month.
- Fed chairman Ben Bernanke will speak at the University of Michigan at 4:30 p.m. ET on monetary policy and the U.S. economy.
- UK business confidence fell to 90.3 in December, from 91.4 the previous month according to a report from accountancy firm BDO. A measure of output also declined to 93.1, below the 95 reading that indicates positive growth.
- Indian wholesale-price inflation increased 7.18 per cent year-over-year, but the pace of inflation eased to a three-year low. 17 crazy things that only happen in India >
- Bonus – Jennifer Lawrence who won best actress in a comedy or musical at the Golden Globes, said the award meant she beat out Meryl Streep.
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