Good morning! Here’s what you need to know.
— The Canadian dollar slid to $US1.10 per U.S. dollar for the first time since 2009 on an otherwise quiet morning in the markets. So far this year, the Canadian dollar has been falling fast (the U.S. dollar has already risen 3.6% against it year to date). “Canadians are starting to be convinced that the Bank of Canada will have an easing bias at its upcoming meeting on the 22nd of January, but little of this is yet priced in,” Société Génerale senior forex strategist Sebastien Galy wrote clients in a January 17 note.
— 10,000 rioters battled security forces in Ukraine amid the country’s new anti-protest laws, which institute jail time for demonstrators blocking public buildings and the arrest of those wearing masks, according to the Agence France Presse. The riots on Sunday and Monday turned Kiev “into a veritable war zone.”
— Non-profit Oxfam has released a startling report on global inequality revealing that the richest 85 people control as much wealth as the poorest 3.5 billion of the world’s population. “Widening inequality is creating a vicious circle where wealth and power are increasingly concentrated in the hands of a few, leaving the rest of us to fight over crumbs from the top table,” said Oxfam executive director Winnie Byanyima.
— German investor confidence fell for the first time in six months. The ZEW Survey fell to 61.7 from its seven-year high of 62. “Germany is relying on domestic consumption to support its economic growth as the 18-nation euro area, its biggest trading partner, struggles with record unemployment and shrinking bank lending,” Bloomberg reported. In the U.S., it’s a quiet week of economic data.
— Asian markets rallied in overnight trading. Japan’s Nikkei was up 0.99%, Korea’s KOSPI edged up 0.52%, and Hong Kong’s Hang Seng finished up 0.45%. European markets were also higher, and U.S. futures were pointing north as a major snowstorm heads toward the northeast (with 6-10 inches expected in New York).
— The Wall Street Journal’s Jon Hilsenrath reports that the Federal Reserve is “on track” to once again taper back its asset purchasing program. “A reduction in the program to $US65 billion a month from the current $US75 billion could be announced at the end of the Jan. 28-29 meeting,” according to the report.
— U.S. IT firms like IBM and Cisco are “on the defensive” in China as regulators there are suspicious of them having been partners in the U.S. government’s surveillance of China, as revealed by Edward Snowden. “IBM, which reported a 22 per cent drop in third-quarter China sales, led by a 40 per cent decline in hardware revenues, may be a bellwether for the ‘Snowden Effect’ when it reports fourth-quarter results later on Tuesday,” Reuters reports.
— Chinese GDP expanded 7.7% in the fourth quarter year-over-year, down from 7.8% the previous quarter. Industrial production was up 9.7%. Some Asian stocks fell on the news.
— In other Chinese news, a new report has shows that pollution from the country makes its way across the Pacific Ocean to the United States. Reuters reports that on some days, acid-rain from burning fossil fuels in China accounts for a quarter of the sulfate pollution in the U.S.
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