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“MOVING IN” (ON STOCK MARKET BARGAINS) (0810 GMT)
Prospects for war just do not bother markets the way they used to. U.S. President Joe Biden reckons Russia intends to “move in” on Ukraine, and even sowed doubt over whether the West would retaliate against any “minor incursion”.
Yet buyers have stepped in to lift MSCI’s world stocks index after two days of falls, that saw the mighty Nasdaq enter “correction” territory, essentially a 10% fall from recent peaks.
Wall Street, for the time being at least, appears set for a bounce, with Nasdaq futures up around 0.7%. And yields on “safe” bonds from Germany and the United States are moving up again after a late-Wednesday pullback.
Reasons for the regular dip-buying are well-documented — abundant cash, negative inflation-adjusted rates, robust company earnings. And China’s first mortgage reference rate cut in nearly two years, shows that policy-tightening in the developed world may be offset at least by Beijing’s actions read more .
And despite this month’s hectic bond selloff, a reminder that yields on a global debt benchmark, the Bloomberg Barclays Multiverse (7-10 years) have only just risen above 2%.
Finally, all around are signs the world economy is emerging from the Omicron knock back of late-2021 and supply chain delays continue to ease. Japan’s exports and imports in December hit record highs in terms of their value in yen read more
Finally, so tight are labour markets in parts of the world that Australia even mulled letting 16-year olds drive forklift trucks, a proposal that’s been put on ice, some may say fortunately. But the day may yet come.
Key developments that should provide more direction to markets on Thursday:
-More geopolitics; China said it warned away a U.S. warship and North Korea suggested it may resume nuclear and missile tests.
-Norway central bank announces interest rate decision at 0900 GMT (expect a hold)
-Euro zone inflation will decrease gradually, Lagarde says read more
-Philadelphia Fed Survey for January
-POLL-Turkish cenbank to halt easing
-Central banks also meet in Malaysia, Indonesia, Sri Lanka, Ukraine
-Final Euro zone HICP Dec, ECB Dec minutes due out
-US initial jobless claims/existing home sales
-US 10-year TIPs auction
-US earnings: Northern Trust, Union Pacific, Netflix, American Airlines
EUROPE ON THE UP (0752 GMT)
Never mind that a selloff on Wall Street deepened overnight confirming correction territory for the Nasdaq but stock futures point to a second day of gains for European equity markets.
Some good-looking earnings could provide support and after gains across Asian markets following another key rate cut in China, derivatives on the DAX, FTSE 100, and Euro STOXX 50 indices were all rising, between 0.3% and 0.5%.
On the watchlist are Unilever shares which could stand up after the company effectively abandoned its plans to buy GSK’s consumer healthcare business, saying that it would not raise its 50 billion pound offer that GSK previously rejected.
Among those which reported trading updates, Bankinter, Deliveroo, Premier Foods and Entain were up in pre-market trading. Europe Inc is expected to deliver a 48% rise in Q4 earnings.
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Mark White is the editor of the ProcurementNation, a Media Outlet covering supply chain and logistics issues. He joined The New York Times in 2007 as an commodities reporter, and most recently served as foreign-exchange editor in New York.