Pre market: UK markets ended higher yesterday led by rally in mining sector stocks
(MENAFN- ProactiveInvestors - UK) Proactive Investors Fri
UK Market Snapshot
UK markets ended higher yesterday led by rally in mining sector stocks. Rio Tinto BHP Billiton Antofagasta Glencore and Anglo American surged 10.3% 10.8% 14.6% 16.0% and 20.0% respectively amid a rebound in commodity prices. Investec gained 6.3% after a leading rating agency upgraded its long term rating on the stock. Royal Dutch Shell advanced 6.1% despite reporting a significant decline in its earnings for the fourth quarter and 2015. On the downside AstraZeneca plunged 6.1% after it projected a drop in its earnings and sales for 2016. easyJet shed 1.2% after stating that its load factor dropped in January. The FTSE 100 advanced 1.1% to close at 5898.8 while the FTSE 250 rose 0.6% to settle at 16086.7.
US Market Snapshot
US markets closed higher yesterday amid gains in raw material and industrial sector stocks as a weaker US Dollar increased commodity prices. Caterpillar Alcoa and Freeport-McMoRan soared 4.3% 10.1% and 17.9% respectively. Bucking the trend Ralph Lauren sank 22.2% after cutting its revenue forecast for 2016. Kohl's tumbled 18.8% as it reduced its full year earnings outlook following weak sales growth in the fourth quarter. GoPro lost 8.7% after it reported a loss for the fourth quarter. ConocoPhillips dropped 8.6% after it posted lower than expected fourth quarter earnings and cut its quarterly dividend. Merck & Co slid 2.9% extending its losses after sales of its chief diabetes drugs fell short of expectations in the fourth quarter and it offered a downbeat guidance for 2016. The S&P 500 gained 0.2% to settle at 1915.5. The DJIA rose 0.5% to settle at 16416.6 while the NASDAQ advanced 0.1% to close at 4509.6.
Europe Market Snapshot
Other European markets ended mostly lower yesterday amid some disappointing corporate results from the region. Credit Suisse Group tanked 10.9% after it reported a huge net loss for the fourth quarter as it took write-down for a previously acquired US investment bank. Daimler lost 4.1% after stating that its earnings and sales growth would be slow in 2016. Peugeot Bayerische Motoren Werke and Renault slid 2.3% 3.0% and 3.3% respectively as Euro strengthened against the US Dollar. Swisscom declined 2.9% after it posted lower than expected net earnings for the full year. On the contrary Statoil surged 9.1% as it announced a cut in its investments to maintain its dividend payouts. ING Groep climbed 8.9% after its fourth quarter earnings surpassed market expectations. The FTSEurofirst 300 index declined 0.2% to close at 1293.7. Among other European markets the German DAX Xetra 30 slid 0.4% to close at 9393.4 while the French CAC-40 advanced marginally to settle at 4228.5.
Asia Market Snapshot
Markets in Asia are trading mostly higher this morning. In Japan Toshiba has tanked 13.3% after it raised its projected annual loss to 710.0 billion. Carmakers Toyota Motor Nissan Motor and Mazda Motor have dropped 3.0% 3.8% and 6.1% respectively as Japanese Yen rallied against the US Dollar. Banks Mitsubishi UFJ Financial Group and Mizuho Financial Group have fallen 4.6% and 5.2% respectively. On the contrary Gree Inc has jumped 11.8% after it announced an association with mobile messaging app Line Corp. In Hong Kong PetroChina and China Petroleum & Chemical have added 1.5% and 1.6% respectively. In South Korea Samsung Electronics and POSCO have gained 1.0% and 1.4% respectively. The Nikkei 225 index is trading 2.2% lower at 16671.3. The Hang Seng index is trading 0.6% up at 19292.0 while the Kospi index is trading marginally higher at 1917.0.
Commodity Currency and Fixed Income Snapshots
Crude Oil
At 0430GMT today Brent Crude Oil one month futures contract is trading 0.2% or $0.07 lower at $34.39 per barrel. Yesterday the contract declined 1.66% or $0.58 to settle at $34.46 per barrel after Saudi Arabia slashed prices of its high-grade crude oil in Europe and Asia suggesting that the nation is in no mood to cut its oil production and would protect its market share at any cost.
Gold
At 0430GMT today Gold futures contract is trading 0.09% or $1.00 lower at $1156.50 per ounce. Yesterday the contract advanced 1.42% or $16.20 to settle at $1157.50 per ounce as a weaker dollar raised demand for the safe-haven metal.
Currency
At 0430GMT today the EUR is trading 0.09% lower against the USD at $1.1195 ahead of German factory orders data for December scheduled to release today. Yesterday the EUR strengthened 0.87% versus the USD to close at $1.1206. Meanwhile the European Central Bank Chief Mario Draghi reiterated that the central bank would provide additional stimulus in the Euro region to boost inflation if needed.
At 0430GMT today the GBP is trading 0.15% lower against the USD at $1.4563. Market participants would closely monitor the US non-farm payrolls data along with unemployment rate figures both for January due later in the day to determine the US Fed's future course of action. Yesterday the GBP weakened 0.1% versus the USD to close at $1.4585 after the Bank of England kept its interest rates unchanged at its policy meeting and cut UK's economic growth outlook.
Fixed Income
In the US long term treasury prices rose and pushed yields mostly lower with investors looking forward to today's US non-farm payrolls report for January. Yesterday yield on 10-year notes fell 1 basis point to 1.87% while yield on 2-year notes lost 2 basis points to 0.70%. Meanwhile 30-year bond yield remained flat at 2.70%.
Key Economic News
UK Halifax house price index rose more than expected in January
On a MoM basis the Halifax house price index registered a rise of 1.70% in the UK in January more than market expectations for a rise of 0.10%.
The Halifax house price index had climbed by a revised 2.00% in the previous month.
UK Halifax house price index advanced more than expected in the November-January 2016 period
In the November-January 2016 period the Halifax house price index climbed 9.70% in the UK on an annual basis compared to a rise of 9.50% in the October-December 2015 period. Markets were expecting the Halifax house price index to climb 9.00%.
BoE unanimously held rates amid growth slowdown
The Bank of England's (BoE) monetary policy committee (MPC) voted 9-0 to keep interest rates on hold at a record low of 0.5% where they have been for almost seven years. The MPC member Ian McCafferty who had previously voted for an increase for six straight months unexpectedly dropped his call in this meeting citing a temporary weaker wages outlook. The BoE slashed its growth forecasts to 2.2% from 2.5% for 2016 but the central bank Governor stated that officials still expected the next move in interest rates to be upwards.
UK new car registrations recorded a rise in January
On a YoY basis new car registrations in the UK rose 2.90% in January. In the previous month new car registrations had registered a rise of 8.40%.
Swiss SECO consumer climate climbed in 4Q 2015
The SECO consumer climate climbed to -14.00 in 4Q 2015 in Switzerland compared to market expectations of an advance to -15.00. In the previous quarter the SECO consumer climate had registered a reading of -18.00.
Swiss UBS real estate bubble index rose in 4Q 2015
In 4Q 2015 the UBS real estate bubble index in Switzerland recorded a rise to 1.41. In the previous quarter the UBS real estate bubble index had recorded a revised reading of 1.34.
US number of planned layoffs by US companies advanced in January
On a YoY basis the number of planned layoffs by US companies advanced 41.60% in the US in January. The number of planned layoffs by US companies had fallen 27.60% in the prior month.
US continuing jobless claims recorded a drop in the last week
The seasonally adjusted continuing jobless claims dropped to 2255.00 K in the US in the week ended 23 January 2016 higher than market expectations of a fall to a level of 2240.00 K. Continuing jobless claims had recorded a revised reading of 2273.00 K in the prior week.
US non-defense capital goods shipments (ex aircraft) advanced in December
In the US the final non-defense capital goods shipments (ex aircraft) recorded a rise of 0.20% on a monthly basis in December. The non-defense capital goods shipments (ex aircraft) had recorded a revised drop of 1.10% in the prior month. The preliminary figures had recorded a fall of 0.20%.
US durable goods orders (ex transportation) registered a drop in December
In the US the final durable goods orders (ex transportation) eased 1.00% in December on a MoM basis. Durable goods orders (ex transportation) had dropped by a revised 0.50% in the previous month. The preliminary figures had recorded a drop of 1.20%.
US unit labour costs in non-farm businesses advanced more than expected in 4Q 2015
In 4Q 2015 the flash unit labour costs in non-farm businesses advanced 4.50% on a QoQ basis in the US compared to an advance of 1.80% in the previous quarter. Market expectation was for the unit labour costs in non-farm businesses to advance 4.30%.
US durable goods orders dropped less than expected in December
US Census Bureau has indicated that on a monthly basis in the US the final durable goods orders fell 4.30% in December less than market expectations for a drop of 4.50%. The preliminary figures had recorded a drop of 0.90%. In the previous month durable goods orders had registered a revised drop of 0.50%.
US initial jobless claims advanced surprisingly in the last week
In the US the seasonally adjusted initial jobless claims climbed unexpectedly to 285.00 K in the week ended 30 January 2016 compared to market expectations of an unchanged reading. In the previous week initial jobless claims had registered a revised reading of 277.00 K.
US non-defense capital goods orders (ex aircraft) recorded a drop in December
The final non-defense capital goods orders (ex aircraft) slid 4.30% on a monthly basis in December. In the prior month the non-defense capital goods orders (ex aircraft) had fallen by a revised 1.10%. The preliminary figures had also recorded a fall of 4.30%.
US non-farm business productivity dropped more than expected in 4Q 2015
In 4Q 2015 the flash non-farm business productivity in the US recorded a drop of 3.00% on a quarterly basis more than market expectations for a fall of 2.00%. In the previous quarter the non-farm business productivity had risen 2.20%.
US factory orders dropped more than expected in December
In December factory orders eased 2.90% on a MoM basis in the US compared to a revised fall of 0.70% in the prior month. Market expectation was for factory orders to fall 2.80%.
Japanese foreign exchange reserves rose in January
In January foreign exchange reserves in Japan registered a rise to $1248.10 billion. In the prior month foreign exchange reserves had registered a level of $1233.20 billion.