AM Analysis
Asian Bourses Received A Boost Last Night
Asian bourses received a boost last night after the People’s Bank of China provided a short term liquidity injection to commercial banks. This comes as a welcome release for banks ahead of Chinese New Year on Friday the 31st of January when huge amounts of money are withdrawn from banks to fund travel and gifts. It is also seen as a way to keep money market rates under control as seven day repo rates jumped up to 6.59% from only 4% a few weeks ago.
Banks will be looking for a rebound today following yesterday’s news about the losses at Deutsche Bank caused banks to take 8 points from the FTSE 100 yesterday amid fears that euro litigation is one of the major increases in costs.
Hopes of a long term resolution between the west and Iran last night hit a stumbling block after the UN extended an invitation for Iran to attend Syrian peace talks which was swiftly retracted last night after the Syrian National Coalition threatened to boycott the event should Iran attend without pre-agreeing to a transitional government. Iran, a major backer of Bashar al-Assad, refused to commit to any pre-conditions causing embarrassment for the UN and potentially upsetting any chance of a long term agreement on Iran’s nuclear programme, whose sanctions were lifted for 6 months last week.
– Alex Conroy
PM Analysis
European Markets Hold Onto Gains
European markets hold onto gains as we head into the afternoon with settlement boosted by easing Chinese money rates. The dollar remains strong against major peers after a report from the Federal Reserve showed it would trim its bond buying program next week.
US futures are signalling a higher open for equities which will reopen after yesterday’s holiday and as investors digest earnings from Johnson & Johnson and Verizon Communications. Fourteen companies within the S&P are reporting earnings throughout the day whilst 62 percent of companies have already reported better than expected earnings.
Data from Germany has shown that investment sentiment unexpectedly stalled in January after rising to a seven-year high in the previous month. Despite the worse than expected reading, Europe’s top economy remains intact.
– Lee Mumford
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