UK Market Snapshot
UK markets closed in the red yesterday, after UK’s Prime Minister, Theresa May, stated that Britain would leave the European Union’s single market. British American Tobacco dropped 3.8%, after the company announced that it would acquire remaining 57.8% shares in US peer Reynolds American for $49.4 billion. Mining firms, Anglo American, BHP Billiton and Vedanta Resources slipped 2.3%, 2.9% and 3.8%, respectively, on lower metal prices. Intertek Group declined 3.2%, following a broker downgrade on the stock to ‘Underperform’ from ‘Neutral’. On the contrary, Rolls-Royce Holdings advanced 4.4%, amid news that the company would settle corruption allegations brought by UK and US authorities by paying £671.0 million. Standard Chartered gained 2.8%, after the bank stated that it had completed three shipping finance deals worth more than $1.6 billion in recent months. The FTSE 100 declined 1.5%, to close at 7,220.4, while the FTSE 250 fell 0.4%, to settle at 18,241.0.
US Market Snapshot
US markets closed lower yesterday, after comments from President-elect, Donald Trump, that the strong US Dollar is hurting the US economy and as financial and healthcare stocks slumped. Banks, JP Morgan Chase, Bank of America and Comerica dropped 3.6%, 4.2% and 6.5%, respectively. Merck, Gilead Sciences and Celgene declined 1.4%, 1.6% and 2.2%, respectively, after Trump vowed to address drug pricing issues. Tiffany lost 2.5%, after the company reported disappointing holiday season sales results. On the positive side, Clayton Williams Energy rallied 39.7%, after Noble Energy, up 7.1%, agreed to acquire the company in a cash-and-stock deal valued at $2.7 billion. Reynolds American advanced 3.1%, after British American Tobacco announced that it would buy the remaining stake in the company for $49.4 billion. The S&P 500 slipped 0.3%, to settle at 2,267.9. The DJIA shed 0.3%, to settle at 19,826.8, while the NASDAQ slid 0.6%, to close at 5,538.7.
Europe Market Snapshot
Other European markets finished in negative territory yesterday, after British Prime Minister, Theresa May, outlined her Brexit plans. Zalando tumbled 5.8%, after it posted downbeat results for the fourth quarter. Alstom slipped 0.9%, despite reporting a growth in its sales for the third quarter. Bucking the trend, Cicor Technologies surged 11.1%, after the company reported a significant increase in its order intake for 2016. Chocoladefabriken Lindt & Spruengli jumped 4.8%, following better than expected organic sales growth in 2016. Beiersdorf added 0.1%, after the company’s group sales for 2016 surpassed market estimates. The FTSEurofirst 300 index declined 0.3%, to close at 1,430.9. Among other European markets, the German DAX Xetra 30 slid 0.1%, to close at 11,540.0, while the French CAC-40 shed 0.5%, to settle at 4,859.7.
Asia Market Snapshot
Markets in Asia are trading mostly lower this morning, mirroring overnight losses on Wall Street. In Japan, banks, Sumitomo Mitsui Financial Group, Mizuho Financial Group and Mitsubishi UFJ Financial Group have lost 1.0%, 1.3% and 1.6%, respectively. Major exporters, Canon, Sony and Panasonic have declined 0.4%, 1.2% and 1.4%, respectively, amid a stronger Japanese Yen. In Hong Kong, lenders, Industrial and Commercial Bank of China and Bank of East Asia have gained 0.8% and 1.6%, respectively, ahead of the final policy address from Hong Kong’s Chief Executive, Leung Chun-ying. In South Korea, Hyundai Motor and LG Electronics have gained 1.0% and 1.9%, respectively, while SK Hynix has fallen 1.6%. The Nikkei 225 index is trading 0.1% lower at 18,801.3. The Hang Seng index is trading 1.1% up at 23,101.4, while the Kospi index is trading 0.1% lower at 2,070.1.
Key Corporate Announcements Today
AGMs
Diploma, Game Digital, Majedie Investments, Guscio
Final Dividend Payment Date
Focusrite, Northamber
Interim Dividend Payment Date
British Smaller Companies VCT, Circle Property, Ventus VCT D Shs, Ventus 2 VCT, Ventus 2 VCT 'C' Shares, Ventus 2 VCT D Shs, Ventus VCT, Ventus VCT 'C' Shares
Special Dividend Payment Date
British Smaller Companies VCT
Quarterly Payment Date
Assura
Trading Announcements
Ladbrokes Coral Group, Burberry, Diploma, Experian, Hochschild Mining, Premier Foods, JD Wetherspoon, Watkin Jones
Key Corporate Announcements for Tomorrow
AGMs
Cardiff Property
EGMs
Industrial Multi Property Trust
Final Ex-Dividend Date
Baring Emerging Europe, Compass Group, Dewhurst, Shaftesbury, Third Point Offshore Investors Limited, Third Point Offshore Investors Ltd. GBP Shares, UDG Healthcare Public Limited Company
Interim Ex-Dividend Date
Aberdeen Asian Income Fund Ltd., Alcentra Euorpean Floating Rate Income Fund Ltd Red Ord Shs, Amedeo Air Four Plus Limited, Ashtead Group, Bilby, Consort Medical, Coral Products, Doric Nimrod Air One Ltd, Doric Nimrod Air Three Limited Red Ord Pref Shs Npv, Doric Nimrod Air Two Ltd Pref Shs Npv, Ediston Property Investment Company, Empiric Student Property, Fletcher King, London & St lawrence Inv Co., North American Income Trust (The), SSE, Supergroup, Twentyfour Income Fund Limited Ord Red, TwentyFour Select Monthly Income Fund Limited, UK Mortgages Limited
Interim Dividend Payment Date
Crystal Amber Fund Ltd., Electra Private Equity, JPMorgan Global Markets Emerging Income Trust
Quarterly Ex-Dividend Date
Custodian Reit
Trading Announcements
Halfords Group, Revolution Bars Group, British Land, Brown (N), Evraz, Halfords, Moneysupermarket.com, Pets at Home, Royal Mail, Workspace, Acacia Mining
Commodity, Currency and Fixed Income Snapshots
Crude Oil
At 0430GMT today, Brent Crude Oil one month futures contract is trading 0.34% or $0.19 higher at $55.66 per barrel, ahead of the American Petroleum Institute weekly oil inventory data, scheduled to be released later today. Yesterday, the contract declined 0.70% or $0.39, to settle at $55.47 per barrel, after a monthly report by the Energy Information Administration indicated that US shale production would rise by 41,000 barrels per day in February from current month.
Gold
At 0430GMT today, Gold futures contract is trading 0.13% or $1.60 higher at $1214.50 per ounce. Yesterday, the contract climbed 1.40% or $16.70, to settle at $1212.90 per ounce, reaching a 2-month high level, amid mounting concerns surrounding Brexit and as the US Dollar lost ground against its peers following Trump’s comments.
Currency
At 0430GMT today, the EUR is trading 0.18% lower against the USD at $1.0693, ahead of the Euro-zone and German consumer prices for December, slated to release in a few hours. Moreover, the US Federal Reserve (Fed) Chairwoman, Janet Yellen’s speech along with Fed’s Beige Book report, due later in the day, will grab investors’ attention. Yesterday, the EUR strengthened 1.06% versus the USD, to close at $1.0712, after the German ZEW current situation index jumped more than expected in January, marking its highest level since July 2011.
At 0430GMT today, the GBP is trading 0.63% lower against the USD at $1.2335, ahead of UK’s ILO unemployment rate for the three months till November, set to release in the day. Additionally, the US consumer price index for December, scheduled to release today, will be closely assessed by traders. Yesterday, the GBP advanced 3.07% versus the USD, to close at $1.2413, after UK’s Prime Minister, Theresa May, announced that the final Brexit deal would be put to both Houses of Parliament for a vote.
Fixed Income
In the US, long term treasury prices rose and pushed yields significantly lower, as Donald Trump disapproved House Republicans’ border tax plan stating that it is too complicated. Yesterday, yield on 10-year notes plunged 7 basis points to 2.33%, while yield on 2-year notes lost 4 basis points to 1.17%. Meanwhile, 30-year bond yield tumbled 6 basis points to 2.93%.
Key Economic News
Theresa May outlined clean break for Britain
During a speech at Lancaster House in London, the British Prime Minister, Theresa May, laid out her vision for a cleaner break from Europe. May confirmed that Britain would leave the European Union (EU) single market, which guarantees the free movement of goods, services and people within the bloc. The Prime Minister made it clear that her fundamental aim was to regain full control of immigration and lawmaking -- and that leaving the single market was the inevitable consequence. Further, she hopes to complete a final deal with the EU by March 2019 and it would be voted on by both houses of Parliament.
UK house price index rose more than expected in November
On an annual basis, the house price index climbed 6.70% in the UK, in November, higher than market expectations for a rise of 6.10%. The house price index had recorded a revised rise of 6.40% in the prior month.
UK core CPI advanced more than expected in December
In December, on a YoY basis, the core consumer price index (CPI) advanced 1.60% in the UK, more than market expectations for a rise of 1.40%. In the previous month, the core CPI had registered a rise of 1.40%.
UK PPI core output rose less than expected in December
In the UK, the non-seasonally adjusted producer price index (PPI) core output climbed 2.10% in December, on a YoY basis, less than market expectations for an advance of 2.20%. In the prior month, PPI core output had climbed by a revised 2.30%.
UK output PPI advanced less than expected in December
The non-seasonally adjusted output PPI in the UK registered a rise of 0.10% in December on a MoM basis, lower than market expectations for an advance of 0.40%. In the prior month, output PPI had registered a revised similar rise.
UK input PPI advanced more than expected in December
On a YoY basis, the non-seasonally adjusted input PPI registered a rise of 15.80% in the UK, in December, higher than market expectations for a rise of 15.50%. Input PPI had advanced by a revised 13.30% in the previous month.
UK input PPI advanced less than expected in December
In the UK, the non-seasonally adjusted input PPI rose 1.80% in December on a monthly basis, less than market expectations for a rise of 2.40%. In the previous month, input PPI had fallen by a revised 0.60%.
UK CPI advanced more than expected in December
In the UK, the CPI climbed 0.50% in December on a monthly basis, more than market expectations for an advance of 0.30%. The CPI had climbed 0.20% in the previous month.
UK retail price index advanced more than expected in December
On an annual basis, the retail price index in the UK rose 2.50% in December, more than market expectations for an advance of 2.30%. The retail price index had registered a rise of 2.20% in the previous month.
UK retail price index ex-mort int. payments rose more than expected in December
On a YoY basis, the retail price index ex-mort int. payments climbed 2.70% in December, in the UK, more than market expectations for a rise of 2.50%. The retail price index ex-mort int. payments had advanced 2.50% in the previous month.
UK output PPI rose less than expected in December
The non-seasonally adjusted output PPI in the UK rose 2.70% in December on a YoY basis, compared to a revised advance of 2.40% in the prior month. Market expectation was for output PPI to rise 2.90%.
UK CPI rose more than expected in December
In December, the CPI rose 1.60% on a YoY basis in the UK, compared to an advance of 1.20% in the previous month. Market expectation was for the CPI to climb 1.40%.
UK PPI core output remained unchanged in December
The non-seasonally adjusted PPI core output remained unchanged on a MoM basis in the UK, in December, less than market expectations for an advance of 0.20%. PPI core output had registered a revised rise of 0.10% in the prior month.
UK retail price index registered a rise in December
In December, the retail price index registered a rise of 0.60%, on monthly basis, to a level of 267.10 in the UK, compared to a level of 265.50 in the prior month. Markets were anticipating the retail price index to climb to a level of 266.70.
Euro-zone economic sentiment index climbed in January
The economic sentiment index registered a rise to 23.20 in January, in the Euro-zone, compared to a level of 18.10 in the previous month.
Euro-zone new car registrations in EU 28 countries registered a rise in December
In the Euro-zone, new car registrations in the EU 28 countries climbed 3.00% on a YoY basis, in December. In the prior month, new car registrations in the EU 28 countries had advanced 5.80%.
German economic sentiment index recorded a rise in January
The economic sentiment index recorded a rise to 16.60 in January, in Germany, compared to market expectations of an advance to a level of 18.40. The economic sentiment index had recorded a level of 13.80 in the prior month.
German current situation index registered a rise in January
The current situation index recorded a rise to 77.30 in Germany, in January, higher than market expectations of a rise to a level of 65.10. In the prior month, the current situation index had recorded a reading of 63.50.
Italian trade surplus dropped in November
In November, (EU countries) trade surplus in Italy narrowed to €0.24 billion, compared to a revised trade surplus of €0.45 billion in the previous month.
Italian trade surplus widened in November
Italy has registered (non-EU countries) trade surplus of €3.97 billion in November, compared to a trade surplus of €3.80 billion in the prior month.
US NY Empire State manufacturing index registered a surprise drop in January
The NY Empire State manufacturing index dropped unexpectedly to a level of 6.50 in January, in the US, lower than market expectations of a rise to a level of 8.50. The NY Empire State manufacturing index had recorded a revised reading of 7.60 in the previous month.
Japanese industrial production advanced in November
On an annual basis, the final industrial production registered a rise of 4.60% in November, in Japan. Industrial production had recorded a drop of 1.40% in the prior month. The preliminary figures had also recorded a rise of 4.60%.
Japanese industrial production rose in November
The final industrial production in Japan climbed 1.50% in November, on a monthly basis. Industrial production had registered a flat reading in the prior month. The preliminary figures had also indicated a rise of 1.50%.
Japanese capacity utilisation advanced in November
In Japan, capacity utilisation registered a rise of 3.00% on a monthly basis, in November. Capacity utilisation had risen 1.40% in the prior month.
Chinese house price index rose in December
On a YoY basis, the house price index climbed 12.40% in December, in China. The house price index had recorded a rise of 12.60% in the prior month.