2016 is off to a troubling start, with ongoing slowdown in emerging markets evidenced by disappointing PMI figures in China and India. Economists noted overall weakness in demand, both externally and at home. China's main indices were down some 5% in the afternoon session (-6.85% now), triggering a new A-share circuit breaker trading halt, US S&P e-mini contract is down 16pts or 0.7%, and copper is down 1.5%. In FX, USD/JPY is down about 100pips from Asia session highs below 119.50. EUR/USD reverse the earlier losses below 1.0830 to rise above 1.0880, as evidence of EM turmoil could spill into the Fed presumed expectations of 4 rate hikes in 2016. PBoC also set Yuan fix much lower once again above 6.50, while offshore Yuan hit new 5-year lows above 6.60 vs USD. Oil prices were up nearly 3% in early electronic trade above $38.10 in WTI Feb contract (37.66 now) in spite the risk-on melt-down. Geopolitical/sectarian Saudi-Iran tensions have spooked investors concerned about possibility of supply disruptions. Japan PMI once again held up well, and Markit economist said this suggests that the official GDP figure for Q4 2015 will signal some growth. Comments from PM Abe noted the economy is firmly on a recovery path with Japan no longer in deflation. Among notable Fed speak, hawk and new FOMC voter Mester said she may have preferred calling for a steeper pace in rate hikes as inflation weakness would prove to be temporary. Fed Vice Chair Fischer also said he may be in favor of higher rates if markets are overheating, though it would be difficult to respond with negative rates in the event of significant deterioration. Fischer added the equilibrium interest rate decline is likely due to persistent weakness in aggregate demand.
Nikkei -3.06% Hang Seng -2.615 Shanghai -6.9%
Eur$ 1.0885 JPY 119.44 CNY 6.51 GBP 1.4737 CHF 0.9966 RUB$ 73.0380 WTI $37.66
S&P -0.85% EuroStoxx-2.41% Dax-2.70% SMI -1.3%
Yearly Performance (Local Currency)
Dow-2.23% S&P-0.73% Nasdaq+5.73% Russell-5.71% Brazil-13.31% EuroStoxx-6.83% FTSE-9.85% CAC-2.64% Dax-1.71% IBEX-16.70% MIB+1.07% SMI-2.58%% Nikkei +8.54% Hang Seng-7.11% Shanghai +4.60%
Yearly Performance (USD)
Dow-2.23% S&P-0.73% Nasdaq+5.73% Russell-5.71% Brazil-42.07% EuroStoxx+3.85% FTSE-4.93% CAC+8.53% Dax+9.56% IBEX-7.15% MIB+12.66% SMI-1.84% Nikkei +9.07% Hang Seng-7.16% Shanghai +9.41%
Macro :
- White House Delays New Financial Sanctions on Iran: WSJ
- FT : Cash lures investors from high-grade debt http://on.ft.com/1ZF86Mg
- FT : Brevan Howard’s $20bn flagship fund falls for second year http://on.ft.com/1moEc0V
- FT : Tech group public-private funding gulf widens http://on.ft.com/1SqE1hq
- Hedge Fund Lutetium Plans to Liquidate, Return Investor Cash
- IMF Not Convinced Greece Will Meet Fiscal Targets: Tsakalotos
- China’s First Data Point in 2016 Shows Growth Stabilizing
- Saudis Cut Diplomatic Ties With Iran, Foreign Minister Says
- Citi Sees Oil Mkts Remaining Weak Before Rebalancing in 4Q 2016
- Fed's Mester prefers a bit quicker U.S. rate-hike pace - http://reut.rs/1Ouh23m
Keep an eye on :
- Auto Sector : French Dec. Car, Light-Vehicle Registrations Rise 11.8%: CCFA
- ADS GY : Adidas Optimistic on FY, 1H Order Books Full, CEO Tells SZ
- AIR FP : ANA to Order 3 Airbus A380 Jets, Boost Hawaii Service: Nikkei
- AIR FP : Airbus set to widen lead over Boeing http://on.ft.com/1SqCkAC
- AKZA NA : Akzo Nobel Paints a Prettier Profit Picture - Barron's : http://bit.ly/1JlIkc0
- AZN LN : WSJ : AstraZeneca Needs to Set Itself Free http://on.wsj.com/1OEWcQR
- EN FP : Orange, Bouygues May Reach Takeover Deal in 1Q, JDD Reports
- CSGN VX : Citigroup, Credit Suisse Paid No U.K. Tax in 2014, Reuters Says
- DIS FP : Disney: ‘Star Wars’ Has Highest Sales Ever for a New Year’s Day
- ENGI FP : Engie in Talks to Start U.K. Retail Energy Business, Times Says
- GOOGL US : Authors Guild Files to Take Google to Supreme Court: Wash Post
- LEON SW : Goldman Sachs’s Satoshi Kubo Said to Leave to Join Leonteq
- LHA GY : Lufthansa Said Hiring More than 4,000 New Employees in 2016
- MC FP : L Capital Said to Seek Fabindia Stake Sale: Economic Times
- MC FP : Champagne Sales Reach Record Levels in 2015, Les Echos Says
- UG FP : France’s 2016 New Car Registrations Could Exceed 2M: Echos
- RNO FP : France’s 2016 New Car Registrations Could Exceed 2M: Echos
- CFR VX : Chinese May Be Buying Swiss Watches Outside Hong Kong: Bilan
- SAS SS : SAS CEO Gustafson Says Airline Market Needs Mergers, DN Reports
- SAN FP : Sanofi Sues Roche’s Genentech, Says MS Drug Patent Is Invalid
- SHP LN : Shire Said in Advanced Talks to Buy Baxalta for ~$32b Cash/Stock
- STMN SW : Straumann rumoured to interest 3M and other US companies - Sonntagszeitung
- TSLA US : Tesla Bursts Into Flames at Recharging Station in Norway: FVN
- TKA GY : ThyssenKrupp Expects Steel Industry Combinations, CEO Tells WamS
- VRX US : Pershing Sells Shrs of Valeant Pharmaceuticals, Holds 8.5% Stake