Christin Tuxen
Danske Bank A/S
Market movers today
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Central banks will take centre stage this week with the meetings at Norges Bank and the ECB (both Thursday) and Bank of Japan (Tuesday); see previews of the former two in box.
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We will also get more news on the pace of the global recovery with the release of flash PMIs for the euro area, the US, Japan and the UK (all Friday).
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Equity markets will continue to focus on the earnings season, which is off to an encouraging start.
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Today looks set to be a quiet start to the week calendar-wise with only Norwegian industrial confidence for Q4 due for release.
Selected market news
Equities and the oil price generally moved higher overnight as political unrest flared up in a range of regions. In Libya, the ongoing civil war led to ports and pipelines being blocked and forced the national oil company to declare 'force', which is set to take some 400,000 barrels per day off the market. In Iraq, the repercussions from the recent Iran-US confrontation remain pertinent, but over the weekend worker discontent led to the closure of one of Iraq's large oilfields, Al Ahdab, while another, Badra, was at risk of closure. Brent crude rose close to USD66 per barrel.
Equities posted decent gains in the Asian session with Nikkei up around 0.25% on the day but renewed unrest in Hong Kong caused the Hang Seng index to suffer, down more than 0.4%. The US is closed for Martin Luther King Day today and thus US Treasuries will not trade; the 10Y yield closed at 1.82% level on Friday. EUR/USD below 1.11 again while USD/CNH made another dip, now below 6.85. The People's Bank of China - as expected - overnight left its benchmark lending rates unchanged, with notably the 1Y prime loan prime rate kept at 4.15%, while the corresponding rate for 5Y and longer loans was maintained at 4.80%.
While it looks set to be a quiet start to the week in terms of data releases, tomorrow will mark both the start of the annual World Economic Forum gathering in Davos as well as the Senate opening the impeachment trial against the US president. The former is - as always - set to focus on high-level issues, but central bankers will come along and might use the opportunity to reflect on their upcoming strategic reviews. The latter is set to deliver a good deal of political noise to markets, but we stress that it remains highly unlikely that president Trump will be ousted as this requires the backing of a range of Republican senators.
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