Wednesday: 5 Things The Markets Are Talking About

Stocks are down, euro area PMIs drop and China’s new growth target. Here are some of the things people in markets are talking about today.

1. Stocks are down

Markets in Asia dropped overnight with Japan’s Nikkei 225 Stock Average closing 3.2 percent lower after Nomura Holdings Inc.’s earnings disappointed. In Europe, the Stoxx 600 fell 0.66 percent at 10:55 a.m. in London. U.S. stock-index futures were little changed.

2. Euro area PMIs

Markit Economics said its composite purchasing managers index for January declined to 53.6 — a four-month low — from 54.3 in December. In a worrying sign for the ECB’s inflation goal, output prices dropped to their lowest level since March 2015. In the U.K. confidence at services companies fell to the lowest level in three years, according to Markit. The data comes a day ahead of the Bank of England’s latest policy decision with speculation increasing that the bank’s next rate move may be a cut.

3. Syngenta deal

China National Chemical Corp. agreed to buy Swiss pesticide and seeds maker Syngenta AG for more than $43 billion in cash, according to a statement out today, with the deal expected to close by year end. With 1.4 billion mouths to feed in China, the deal makes strategic sense for the state-backed company. The takeover will have to be approved by U.S. security officials who need to ensure there will be no risk to American food security from the deal.

4. Oil rally?

Oil prices could increase by 50 percent by the end of the year, with analysts predicting a $15 per barrel rise, estimates compiled by Bloomberg show. In the shorter term, West Texas Intermediate for March delivery has risen 66 cents to $30.56 a barrel on the New York Mercantile Exchange by 11:24 a.m. London time following its biggest two-day drop in seven years. However, the best performing commodity so far this year has been gold, which held its ground near a three-month high this morning.

5. China growth target

China has set a growth target for the world’s second-largest economy of 6.5 percent to 7 percent this year, the first time it has set a range for its growth target since 1995. The economy is under pressure, with investors looking to so-called fallen angels as more debt is cut to junk. In response, the PBOC plans to relax rules on when foreign investors can bring money in and out of the country in a loosening of the country’s capital controls, according to people with direct knowledge of the matter.

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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