Five Things You Need to Know to Start Your Day
China’s central bank eases, more weakness in manufacturing PMIs and Ghosn is ready to talk. Here are some of the things people in markets are talking about today.
Stocks in China got the year off to a strong start after the country’s central bank reduced the reserve ratio for commercial banks by 50 basis points, a move that will release about 800 billion yuan ($115 billion) for lending. It comes as liquidity concerns remain high in the world’s second-largest economy. On trade, the pressure seems to be off at the moment with President Donald Trump announcing a signing ceremony for the phase-one deal in the White House on Jan. 15, a date that China has not yet confirmed.
Factory output data from across the world showed a brighter outlook for Asian production. Purchasing managers indexes for South Korea, Thailand and Taiwan all moved above 50 in December. China’s official manufacturing PMI remained at 50.2 for the month. There was a less rosy picture in Europe with the euro-area factory gauge weakening to 46.3, an 11th consecutive month for the reading signalling a contraction. The U.K. number also disappointed coming in at 47.5, with new orders plunging. Markit Manufacturing PMI for the U.S. economy is published at 9:45 a.m. Eastern Time.
Scores to settle
After his stunning escape from Japan to Lebanon, former head of Nissan Motor Co. and Renault SA Carlos Ghosn said in a statement that he can now “finally communicate freely with the media” for the first time since his surprise arrest more than a year ago. Ghosn’s foremost aim is likely to be to rebuild his reputation, and probably settle some scores now that he is free from extradition back to Japan. That campaign will begin in earnest on Jan. 8 at a press conference where journalists will get to ask the international fugitive “how did you escape?”
Stocks around the world are making a positive start to the new decade. Overnight the MSCI Asia Pacific Excluding Japan Index climbed 0.5%. Japanese markets are closed for holiday until next week. In Europe the Stoxx 600 Index was 1.1% higher at 5:50 a.m. with banks the strongest performer in a session that is seeing gains for every market sector. S&P 500 futures pointed to a strong open, the 10-year Treasury yield was at 1.921% and gold also gained.
As it’s Thursday, the day starts with weekly initial jobless claims at 8:30 a.m. which are expected to come in at 220,000, close to last week’s level. Despite tomorrow being the first Friday of the month, monthly payrolls data is not due until Jan. 10. As well as the U.S. number, manufacturing PMI for Canada and Mexico are due today. At 11:30 a.m., there will be a sale of 4-week and 8-week Treasury bills, which should be a non-event after the Federal Reserve successfully headed off any year-end turmoil in funding markets.
What we've been reading
This is what's caught our eye over the holidays.
- Odd Lots: Why it’s a big problem that economists don’t understand money.
- Almost everything Wall Street expects in 2020.
- Private equity is starting 2020 with more cash than ever before.
- Even an $8.7 trillion bond rollover can’t solve safe-asset drought.
- The decade that changed everything on Wall Street.
- Pelosi and McConnell begin 2020 in standoff over Trump impeachment trial.
- A warning from tree rings: The Americas are prone to catastrophic, simultaneous droughts.
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