Wednesday: 5 Things The Market Is Talking About

Euro-area inflation comes in below expectations, there are reports that Yahoo is thinking about selling its Internet business and Yellen is scheduled speak. Here are some of the things people in markets are talking about today.

1. Euro area inflation

Euro-area inflation remained at 0.1 percent in November, below economist forecasts for a small rise to 0.2 percent and with core inflation unexpectedly slipping to 0.9 percent. In a Bloomberg survey published this week, all 53 participating economists predicted the European Central Bank will step up stimulus at tomorrow’s meeting. The euro dropped back below $1.06 after the inflation numbers were released and traded at $1.0589 at 10:53 a.m. London time as traders look to euro dollar parity in the coming months.

2. Reports of big changes at Yahoo

Yahoo! Inc.’s board will consider a potential sale of the company’s main Internet businesses, the Wall Street Journal reported, citing people familiar with the matter. Chief Executive Officer Marissa Mayer is facing renewed pressure from activist investor Starboard Value after making little progress to turn the company around after three years at the helm. Shares in Yahoo were 6.5 percent higher in premarket trading following the report.

3. Yellen speaks

Federal Reserve Chair Janet Yellen is set to deliver remarks and participate in an interview at the Economic Club of Washington after that in what will be the first of her two major engagements over the coming days. She is expected to start her prepared remarks at 12:45 p.m. ET with her conversation with David Rubenstein beginning at 1:15 p.m.

4. China stocks rally

The Shanghai Composite Index climbed 2.3 percent as financial companies rallied on prospects for monetary stimulus. China Life Insurance Co., China Vanke Co. and China Citic Bank Corp. all surged by the 10 percent daily limit. Authorities in China announced that they were easing controls on investment grade corporate bond sales. Finance Minister Lou Jiwei told a closed-door meeting last month of plans to expand the size of its local government debt swap program to about 15 trillion yuan, according to a person who attended the gathering.

5. Bonus pools

Citigroup Inc., the third-biggest U.S. bank, plans to leave its bonus pool unchanged from 2014, joining JPMorgan Chase & Co. in a move that will put pressure on weaker rivals, particularly in Europe where banks are preparing to cut compensation. Morgan Stanley shares climbed yesterday on news that the bank is planning to cut as much as a quarter of its fixed income staff.

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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