market wrap
be careful:
GDP data for the EU, Germany, France, and Italy. EU Business and Consumer Survey. Private consumption in France. Bank of England Money and Credit. Deal updates from Diageo, Tele2, WPP, BBVA, Hapag-Lloyd, Generali
Opening call:
Stocks are set to rise in European markets on Tuesday ahead of results from big technology companies, meetings between the Federal Reserve and the Bank of England, and a host of economic data. Stock benchmarks were mixed in Asia. Government bond yields have fallen. The dollar has fallen. Meanwhile, oil rose and gold remained stable.
stock:
European stocks are poised to start higher as traders prepare for a busy week of corporate earnings, Fed and BoE interest rate decisions, and economic data from the euro zone and the United States.
About 100 S&P 500 companies are scheduled to report earnings this week, including five tech stocks from the so-called Magnificent Seven that helped lift the market. Alphabet and Microsoft are scheduled to report their financial results on Tuesday, while Metaplatform, Amazon.com and Apple are scheduled to report on Thursday.
Meanwhile, the Fed and BOE are scheduled to announce interest rate decisions on Wednesday and Thursday, respectively.
Preliminary figures for the euro area gross domestic product (GDP) for the fourth quarter of 2024 are scheduled to be released on Tuesday, and estimates of the euro area January inflation rate will be released on Thursday. It is expected to provide hints about the direction of monetary policy.
The week concludes with the release of the US jobs report on Friday. Investors will be watching how job creation fared in January to assess the outlook for the economy and inflation.
Foreign exchange:
An overnight drop in US bond yields eroded the dollar’s strength in Asia, reducing the attractiveness of US fixed income assets and demand for the dollar.
According to Mitsubishi UFJ Bank, the decline in yields was due to the U.S. Treasury lowering its first-quarter borrowing forecast to $760 billion from the previous estimate of $816 billion.
He added that the Treasury’s borrowing strategy has become much more important in the market as the US federal deficit increases.
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According to BDS Switzerland, the euro remains under downward pressure against the dollar, reflecting economic risks in the eurozone.
“Economic risks in the euro area could weigh on developments in the euro and the European Central Bank’s monetary policy,” the report said.
Bonds:
U.S. Treasury yields fell in Asia after the Treasury cut its federal borrowing outlook for the quarter, but investors were ahead of a key week that includes Fed policy decisions and December jobs data.
Investors were also closely monitoring the situation in the Middle East after the United States announced retaliation for a weekend drone attack that killed three U.S. soldiers in Jordan and sharply escalated tensions.
It is virtually certain that the central bank will keep the federal funds rate unchanged at 5.25% to 5.5%, but investors will be watching for policy statements, especially comments from Fed Chair Jerome Powell for clues about the timing of expected changes in the rate. Dew. Interest rate cut.
energy:
In Asia, crude oil rose on concerns about possible disruptions to oil supplies.
UOB said a strong US response to the escalating conflict in the Middle East could push oil prices higher.
Concerns about the outlook for China’s economy and energy demand also helped keep oil prices from rising.
metal:
Gold was trading solidly but could fall ahead of the two-day FOMC meeting that begins later today.
Fawad Razaqzada, market analyst at City Index and Forex.com, said the strength in precious metals could weaken this week.
The analyst said the FOMC meeting could signal that the Fed will remain firm against excessive dovism.
Another important thing to watch is the US Treasury’s release of quarterly tax refunds on Wednesday, the analyst added.
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Iron ore prices were mixed. Baocheng Futures said that while the Chinese government’s recent stimulus measures have improved market sentiment, this is being offset by continued deterioration in steel mill profitability.
As steel inventories continue to rise, most factories have limited room to increase production to boost profits.
This bodes badly for demand for steelmaking materials and could limit the positive effects of policy easing. Iron ore is likely to remain volatile as weak fundamentals limit upside, it added.
today’s top headlines
Why did oil prices rise after the crisis was averted?
The recent disruption in the Red Sea is not the only reason why oil prices have risen.
Brent crude oil futures rose more than 6% last week, settling at $83.55 a barrel on Friday, the highest since early November. The gains came as winter storms hit U.S. oil production and new data showed the country’s economy remains resilient and hinted at solid fuel demand going forward.
Ministry of Finance lowers first quarter borrowing outlook
The Treasury Department said Monday that it expects first-quarter borrowing to be $760 billion, $55 billion less than previously expected. Part of the decline was due to “increased net financial flows” and an increase in cash balances. The updated forecast includes a quarter-end cash balance of $750 billion.
The Treasury Department said it expects to have $750 billion in cash and borrow $202 billion in net marketable debt heading into the second quarter. Since April 15th is the deadline for filing personal income taxes, there is less need for borrowing in the April-June period.
Qatari Prime Minister says progress has been made on hostage release agreement
Qatar’s prime minister said on Monday that the leaders of Egypt, Israel, Qatar and the United States have made progress toward a deal to release Israeli hostages held by Hamas in exchange for a ceasefire in the Gaza Strip.
“We are in a much better situation than we were a few weeks ago,” Prime Minister Sheikh Mohammed bin Abdulrahman Al Thani told a public forum in Washington.
Renault cancels Ampere IPO plans
Renault announced that it has decided to cancel the initial public offering of its electric vehicle division Ampere, due in part to stock market conditions.
The French automaker said it intends to list the business in 2022, with a trading debut expected in spring 2024.
Bregal Form Impact Strategy Focused on Agriculture
Bregal Investments is establishing a new strategy dedicated to reducing carbon emissions in agriculture and increasing the sustainability of crops while generating salable carbon credits.
The Bregal Sphere Nature strategy invests in so-called agroforestry projects that combine tree and shrub crops such as cocoa and coffee with the planting of other native trees and shrubs. Alvar de Wolff, who co-leads the strategy as managing partner with Agustín Silvani, says such projects will help remove greenhouse gases produced by agricultural operations, while also improving biodiversity and reducing drought and other said that it helps increase the crop’s tolerance to stress.
Amazon and iRobot abandon deal amid intense regulatory scrutiny
Amazon.com and robot vacuum maker iRobot are closing a $1.7 billion deal following regulatory backlash, as competition authorities around the world place greater scrutiny on deals between tech companies. agreed.
Amazon and iRobot announced Monday that they have signed a termination agreement that resolves all outstanding issues related to the deal, which was originally agreed to in August 2022. Amazon will pay iRobot a $94 million termination fee.
Elon Musk says Neuralink has implanted brain chips into humans
Elon Musk said the first humans received a Neuralink brain implant. This could be a milestone in the development of “brain-computer interface” technology that could one day allow people suffering from debilitating conditions such as paralysis to interact with their surroundings.
Musk tweeted late Monday that the patient received the implant the day before and was “recovering well,” suggesting the surgery was successful and there were no major technical issues. Musk did not provide details about the patient. When Neuralink announced last September that it was recruiting trial participants, the company said it was looking for people who suffer from quadriplegia.
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Major events expected on Tuesday
00:01/UK: January over-the-counter price index
05:30/NED: January Producer Confidence Survey
05:30/NED: December PPI
06:30/FRA: December Household consumption expenditure on manufactured goods
06:30/FRA: Q4 GDP – Initial estimates
07:00/SWI: December trade balance
07:30/Hun: December PPI
07:45/FRA: Housing starts in December
08:00/SWE: January Quarterly Business Trend Survey
08:00/SWE: January Consumer Trends Survey
08:00/SPN: Q4 GDP preliminary figures
08:00/SVK: January business confidence indicators
08:00/SVK:January Business Trend Survey
08:00/SWI: January KOF Economic Barometer
08:00/SPN: January preliminary CPI estimates
08:00/AUT: Q4 GDP preliminary figures
08:00/CZE: 4th quarter GDP preliminary figures
09:00/ICE: January CPI
09:00/BUL: December PPI
09:00/GER: 4th Quarter GDP – First Release
09:00/ITA: 4th quarter GDP preliminary figures
09:30/UK: Q4 insolvency statistics
09:30/POR: Q4 GDP preliminary figures
09:30/UK: December Bank of England effective interest rate
09:30/UK: December Money and Credit – Personal Loans, Business Loans, Extensive Money and Credit
09:30/UK: Financial and financial statistics for December
10:00/CYP: November industrial production index
10:00/EU: January Business and Consumer Survey – Business Environment Indicators and Economic Sentiment Indicators
10:00/ITA: December PPI
10:00/GRE: December PPI
10:00/CRO:December Retail industry
10:00/MLT: December PPI
10:00/EU: Q4 GDP preliminary figures
10:30/BEL: January CPI
11:00/IRL: December WPI
11:00/POR: December Retail
13:00/HUN: January Hungarian interest rate decision
All in GMT. Brought to you by Onclusive and Dow Jones.
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January 30, 2024 00:16 ET (05:16 GMT)
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