Monday: 5 Things The Market Will Be Talking About

Iran sanctions end, Brent dips under $28 and global stocks are down. Here are some of the things people in markets are talking about today.

1. Iran is back

The United Nations’ nuclear agency announced Saturday that Iran has complied with the terms of an international agreement to curb its nuclear development program, allowing sanctions against that country to be lifted. This will allow Iranian banks to reconnect to the Swift system for international financial transactions, allowing capital to flow into – and out of – the country freely. The U.S. did apply new sanctions on Iran on Sunday over its missile program, but they are very limited in the context of the controls that have just been lifted.

2. Oil

The biggest reaction to the lifting of sanctions on Iran has been in the oil price – with Brent dipping below $28 a barrel overnight – as Iranian production is set to enter an oil market already in a global glut. Stock markets across the Gulf tumbled as a reversal in oil price falls now seems further away, despite optimism expressed by the Saudi oil minister. In the U.S. the price of North Dakota Sour fell below $0 to -$0.50 a barrel at one refinery on Friday.

3. Taiwan election

Taiwan opposition leader Tsai Ing-wen was elected president in Saturday’s election and her Democratic Progressive Party won a clear majority in the legislature, shutting the Kuomintang party out of power for the first time since Chiang Kai-shek fled across the Taiwan strait in 1949. After the result 59 year-old Tsai promised she would overhaul Taiwan’s flagging economy while maintaining peace with mainland China. The Beijing administration, which considers Taiwan to be a province of China, will now have to revise its road map for eventual reunification as the new government in Taipei seeks full independence. The Taiex index added 0.6 percent at the close of its first session after the election result.

4. Banks battered

Asian stocks declined overnight and European shares are mixed in trading so far today with the Europe Stoxx 600 index unchanged at 11:20 a.m. London time. Bank stocks have been hit hardest, with the Euro Stoxx Banks index down almost 4 percent in earlier trading before recovering somewhat. There is also no respite for the miners, with Anglo American becoming the most volatile stock in the Europe 600 Index, putting it in the realm of penny stocks.

5. Davos on, U.S. markets off

The World Economic Forum annual meeting in Davos, Switzerland is on this week and the great and the good of the global economy are once again gathering to discuss the state of world. Bloomberg will have updates and interviews from Davos throughout the week on television and online. In the U.S. markets are closed today for Martin Luther King day.

Forex heatmap

Bloomberg

Dean Popplewell

Dean Popplewell

Vice-President of Market Analysis at MarketPulse
Dean Popplewell has nearly two decades of experience trading currencies and fixed income instruments. He has a deep understanding of market fundamentals and the impact of global events on capital markets. He is respected among professional traders for his skilled analysis and career history as global head of trading for firms such as Scotia Capital and BMO Nesbitt Burns. Since joining OANDA in 2006, Dean has played an instrumental role in driving awareness of the forex market as an emerging asset class for retail investors, as well as providing expert counsel to a number of internal teams on how to best serve clients and industry stakeholders.
Dean Popplewell
Dean Popplewell

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