The U.S. markets are closed. But the rest of the world goes on.
Dave Lutz of Stifel Nicolaus has a roundup of what traders are reading and chatting about as they wait for markets to come back online:
Good Morning! Following is a roundup of overnight Market Action — Key headlines (With Story Links), and this week’s calendar.
Euro Markets are under pressure — weighed down by Banks after DB released early. DAX off 40bp in average trading, but most EU markets trading 30% light to average volumes. EU Fins are retreating, losing 1% on the back of DB’s 6% drop overnight. Asian Markets were under pressure on Weak China data — Nikkei lost 60bp, Shanghai lowest in 6 months, and most EM Asia weaker. India’s market jumped as the RBI injected capital into their bond Markets. Aussie lost 20bp, but Miners under pressure after recent run on weak China data. China’s CDS has jumped 10% overnight on liquidity concerns into the New Year Holiday
The 10YY is slightly lower as Bills have a slight bid in CBOT trading. The DXY is weaker as both the Euro and Yen pop against the Greenback. Platinum is jumping 2% overnight and 7% over the last week (South Africa Strikes). Gold hit a new YTD peak overnight, testing $US1260/oz before retreating. Copper and Steel futures remain under pressure (China). The energy complex is mostly red, with WTI off 50bp (Iran deal), but Nat Gas is off 1.5% despite the frigid temperatures in the USA this week.
Market Trading Hours During The US Holiday Today
· New York, Chicago trading floors: closed
· CME Equity products closes at 11:30 AM Eastern, resume trading at 6:00 PM Eastern
· CME and CBOT Interest Rate & FX Products close early at 1:00 PM; resume trading at 6:00 PM
· NYMEX, COMEX early close 1:15 Eastern; resume trading at 6:00 PM Eastern
· NYSE Liffe — Normal close
· Eurex — Normal close
Summary for the week ahead
· Holiday Monday
· Light US Economics, Highlights: PMI, Existing Homes
· Heavy China Data – GDP, IP, Retail Sales, Flash Manufacturing PMI
· Earnings Season accelerates in Tech
· Bank of Japan and Bank of Canada Rate Decisions
· Bank of England Minutes + Carney Speaks
· AIA architectural billings Index
· Sov Ratings Reviews: France, UK and Germany
SOME OF THE HEADLINES TRADERS ARE READING
CHINA / ASIA
· China growth lowest in 14 years – the country’s economy grew 7.7pc last year, the same as 2012, which was the slowest since 1999. Gross domestic product expansion for the October-December quarter also came in at 7.7pc, the National Bureau of Statistics said, from 7.8pc in the previous three months.
· China banks face sub-10% profit growth – Analysts expect single-digit growth for first time since 2005
· China Traders are also anxious about tightening credit conditions ahead of the Chinese New Year holiday at the end of the month. The seven-day repo rate rose 145 basis points to 6.6 per cent.
· In a rare accommodative measure, the state-run People’s Bank of China is providing short-term cash to the country’s biggest lenders, in a move seen as a bid to avoid a liquidity crisis near the Lunar New Year holiday
· Crédit Agricole said they maintained a bearish position on the Japanese currency but short-term gains were possible because market participants do not see the Bank of Japan easing policy further after Wednesday’s policy meeting – “[BoJ governor Haruhiko Kuroda] stressed that the economy is moving smoothly towards inflation as prices will continue to rise for the time being. Under such conditions the central bank is unlikely to become even more aggressive unless sentiment turns sour”
· The early release of Deutsche Bank’s earnings late last night, which showed a €1.2bn Q4 loss, weighed on Banks
· According to Sky News, the IMF will increase its forecast for UK growth in 2014 from 1.9pc to 2.4pc – The upgrade will be significantly stronger than the upgrade expected for world economic growth.
ENERGY / MENA
· Iran halted its most sensitive uranium enrichment work on Monday as part of a landmark deal struck with world powers, easing concerns over the country’s nuclear program and clearing the way for a partial lifting of sanctions, Tehran and the U.N. said.
· Iran said it will attend this week’s (weds) Geneva conference aimed at finding a resolution to Syria’s war, and that it will do so without agreeing to anything in advance – Syria’s main opposition group in exile Syrian National Coalition (SNC) said here on Monday that it suspends its participation in Geneva II conference due to UN’s invitation to Iran.
· Hedge Funds Cut Brent Crude Net-Longs to Lowest in 14 Months
· Militant union AMCU has today served notice to strike within 48 hours at South Africa’s top platinum mines – Leading producers Anglo American Platinum, Impala Platinum and Lonmin confirmed members of the dominant Association of Mineworkers and Construction Union will start their strike for higher wages at morning shift from Thursday.
· A standoff over cost overruns in the Panama Canal expansion has Panamanians as anxious as the global shipping industry – Panama’s plan has suddenly run into rough waters because of ballooning cost overruns. European construction companies hired to expand the canal are threatening to bring the project to a halt as soon as Monday
· Bitcoin doesn’t meet the definition of a currency or even an electronic payment form in Finland, where the central bank has instead decided to categorize the software as a commodity
· OAO Uralkali, the largest potash producer, agreed to supply the soil nutrient to China at a price 24 per cent less than a contract that expired in July
· South Korea discovered the H5N8 avian influenza virus in dead migratory birds after confirming an outbreak at two duck farms in the country’s south – About 100 dead birds found in a reservoir in North Jeolla province tested positive for H5N8, the Ministry of Agriculture, Food and Rural Affairs, said in a statement today.
· China is abandoning a stockpiling programme that has seen the nation run up an outsized hoard of cotton that it must now sell at a loss, pledging instead to switch to a subsidy system for cotton farmers this year.
· It will be the NFL’s No. 1 offence (Denver) vs. the league’s No. 1 defence (Seattle) at MetLife Stadium in New Jersey on Feb. 2.
· Live Blog: Davos 2014
· UBS has struck two deals to outsource most of its fixed income trading platform in a radical step highlighting the scale of cost pressures in the investment banking sector – The Swiss bank will replace its patchwork of multiple trading platforms with standardised solutions from technology groups Murex and Ion Trading, people close to the situation said.
· Lenovo Group is in serious discussions to acquire International Business Machines Corp.’s low-end server business, and a deal may be signed within weeks
· Argentina will make an offer to members of the Paris Club on Monday to renegotiate the terms of its outstanding debt owed to the group of creditor nations, an Argentine source said.
· FT: US regulators ‘funded at a level to fail’
· A rising number of economists say the U.S. will reach 3% growth in 2014 for the first time in nine years – but similar predictions have been dashed in the past few years
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