Tuesday: 5 Things The Markets Are Talking About

Chinese stocks get slammed, safe havens rally, and Apple is due to report earnings. Here are some of the things people in markets are talking about today.

1. China stocks slammed

The Shanghai Composite Index plunged 6.4 percent to 2,749.79 at the close. Huang Weimin, a hedge fund manager whose Chinese stock-index futures wagers returned more than 6,200 percent last year, has warned investors should sell their shares now, before it’s too late. To add to China’s woes, discrepancies between its reported exports to Hong Kong and the shipments registered by the territory widened in December. China recorded $1.94 of exports for every $1 of imports Hong Kong registered from the mainland, suggesting currency-market swings may have spurred a fresh round of fake trade invoicing.

2. Haven bid

German sovereign debt yields hit fresh all time lows this morning with two-, three- and five-year notes all gaining. Rising sovereign debt prices in the U.K. have increased worries of a debt auction not being covered with Robert Stheeman, chief executive officer of Britain’s Debt Management Office, saying that he can’t rule out an uncovered auction happening “at some point.” Last week’s auction of gilts due in 2021 had a bid-to-cover ratio of only 1.07, the lowest since a 2009 sale of 40-year securities. Gold rose to a two-month high.

3. Oil fluctuates

Oil prices continue to be volatile. After falling as low as $29.28 a barrel in early trading, West Texas Intermediate was at $30.27, down 0.2 percent at 11:10 a.m. London time. Bets on oil falling below $25 a barrel have risen to a record.

4. Fed decision day guide

Markets are losing faith in more rate increases from the Fed, with implied probabilities suggesting a 30 percent chance of no more hikes at all this year. It is certainly safe to say that the economic landscape has changed and the Fed needs to recognise this tomorrow, without taking a March rate rise completely off the table. Timothy Duy, professor of practice and senior director of the Oregon Economic Forum at the University of Oregon, says that choppy markets could put the central bank in “risk management” mode.

5. Apple earnings

Apple Inc. is due to report earnings after the bell today. With shares down 11 percent since the company’s last report in October, analysts will be watching closely for the key iPhone sales number. The earnings will also be monitored by the hundreds of suppliers around the globe whose fortunes are closely tied with the company.

Forex heatmap

Bloomberg

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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