Thursday: 5 Things The Markets Are Talking About

Markets react to the Fed, Abe loses economy minister and an earnings extravaganza. Here are some of the things people are talking about in markets today.

1. Fed reaction

Emerging markets advanced in the aftermath of yesterday’s Fed statement which acknowledged global risks, reassuring investors that the pace of rate hikes could be slow. The Europe Stoxx 600 was 0.5 percent lower at 10:55 a.m. in London following worse than expected earnings from companies and a report from the European Commission showing executive and consumer confidence fell to 105, the lowest in five months. Italian banks are also getting slammed once again. U.S. stock futures had been higher, led by the Nasdaq 100 following stellar Facebook earnings, but have given up most of their gains. Facebook itself remains set for major gains.

2. Japan’s economy minister resigns

Japanese Economy Minister Akira Amari resigned this morning following accusations he received money in return for favors. Amari, who spearheaded Prime Minister Shinzo Abe’s strategy to boost the nation’s competitiveness (known as “Abenomics”) is the most influential minister to step down since Abe took office in 2012. The prime minister announced the appointment of Nobuteru Ishihara, a former rival for the presidency of his party, as the nation’s new economy minister.

3. Earnings

Earnings season continues apace today with Caterpillar Inc., Ford Motor Co. and Amazon.com Inc. among those due to report. Alibaba Group Holdings Ltd. is also due today, with investors watching for any insight into the health of the Chinese economy. Meanwhile in the U.S. we get initial jobless claims out at 8:30 AM ET. Economists are looking for an improvement from 293K to 281K.

4. U.K. GDP

The United Kingdom economy grew for the twelfth consecutive quarter, with gross domestic product rising 0.5 percent in the fourth quarter, in line with expectations. The growth in the economy was driven by a pickup in services, which account for about 79 percent of gross domestic product. Sterling advanced following the release.

5. Not guilty

In a setback to the U.K.’s Serious Fraud Office the sixth ex-broker charged in connection with the Libor-rigging scandal was acquitted this morning. This follows the acquittal of the other five brokers charged yesterday. Tom Hayes, who had his sentence reduced to 11 years in December, remains the only person convicted in relation to the scandal.

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