1. U.S. Equity Futures Fluctuate, Dollar Edges Higher
Markets were mildly risk-off on Monday as investors weighed strong economic data from China, U.S. President-elect Joe Biden’s stimulus plans and surging coronavirus trends. Carrefour SA tumbled 6%, leading Europe’s Stoxx 600 lower after Canada’s Alimentation Couche-Tard abandoned talks on a $20 billion merger. The dollar ticked higher, while S&P 500 futures were little changed. U.S. financial markets are closed Monday for the Martin Luther King holiday.
Futures on the S&P 500 Index fell 0.1% as of noon London time.
The Stoxx Europe 600 Index was little changed.
The MSCI Asia Pacific Index decreased 0.4%.
The MSCI Emerging Market Index fell 0.2%.
2. No Direct Link Between Elderly Deaths and Vaccine: Norway
Health authorities in Norway say there’s no evidence of a direct link between the recent string of deaths among elderly people inoculated against Covid-19, and the vaccine they received. The Norwegian Medicines Agency is seeking to address fears that taking the vaccine might be too risky, after 33 people in the country aged 75 and over died following immunization, according to the agency’s latest figures. All were already seriously ill, it said. “Clearly, Covid-19 is far more dangerous to most patients than vaccination,” Steinar Madsen, medical director at the Norwegian Medicines Agency, said by phone on Monday. “We are not alarmed.”
3. China’s Growth Beats Estimates: Economy Powers Out of Covid
China’s economy roared back to pre-pandemic growth rates in the fourth quarter as its industrial engines fired up to meet surging demand for exports, pushing the full-year expansion beyond estimates and propelling its global advance. GDP climbed 6.5% in the final quarter from a year earlier, pushing growth to 2.3% for the full year. That leaves the world’s second-largest economy driving global growth and potentially passing U.S. GDP sooner than previously expected. The V-shaped recovery from the biggest slump on record was engineered by getting Covid-19 under control and deploying fiscal and monetary stimulus to boost investment. Growth accelerated as the nation’s factories revved up to meet pent-up global demand.
4. EU Set Target for Vaccinating 70% of Its Population by Summer
The European Union’s executive arm will urge member states to set a target for vaccinating at least 70% of the bloc’s population by this summer. The European Commission will also vow to agree with member states by the end of this month on a protocol for vaccination certificates “which can be recognized and used in health systems across the EU. Such certificates could replace quarantines and test-requirements, proving that “you are no longer high-risk for travel.” This policy comes when an increase in infections that has forced EU governments to prolong recession-inducing lockdowns. It also follows an underwhelming rollout of vaccinations across the continent that has left the EU lagging behind the U.S., the U.K. and other developed nations.
5. Russia’s Crude Oil Gets a Boost From Saudi Production Cuts
Russia’s flagship crude is rising in price in Europe in the wake of Saudi Arabia’s surprise oil production cuts. The nation’s Urals crude sold at a slight discount of 70 cents a barrel to benchmark Dated Brent in northwest Europe on Jan. 15, an increase of almost $1 from an 8-month low seen before Christmas. Saudi Arabia, the world’s top oil exporter, surprised global oil markets earlier this month by announcing a plan to go it alone with output cuts of 1 million barrels a day in February and March. By contrast, Russia will boost its output slightly while most other nations participating in a supply-management pact kept production stable.
6. London Stock Exchange Seeks Accelerated IPOs in Listing Review
London Stock Exchange is pushing the U.K. government to shorten the process for companies to go public as part of a review of its listing rules. Initial public offerings in London take five weeks from publication of the registration document to a stock’s trading debut. The LSE has suggested shorter timetables to the government review, the results of which are expected early this year. The proposals would still give unconnected analysts enough time to form a view about the IPO candidate and relay it to investors. These changes would bring the City’s listings more in line with quicker procedures on U.S. and continental exchanges.
7. Dollar Shorts Mount Before Yellen Outlines Market-Based Policy
The U.S. Treasury Secretary-designate will affirm the U.S.’s commitment to a market-determined dollar value on Tuesday. The comments could fuel speculation authorities will not object to a softer greenback, which earlier this month fell to a two-year low against its major peers. Investors are already doubling down on wagers that stand to profit if the currency weakens further, emboldened by an incoming Democratic administration that is prepared to unleash more fiscal stimulus to help the economy recover. Hedge funds boosted net short positions to the highest in nearly three years in the week through Jan. 12. Meanwhile, they raised bullish bets on the pound to the most since October, and are betting on the euro and the Australian and New Zealand currencies to rise.
8. HSBC Chairman Gives Hints of Looming Strategy Revamp
HSBC plans to accelerate its expansion across Asia in its imminent strategy refresh, according to Chairman Mark Tucker. Tucker said “the world had changed” in the 11 months since Europe’s biggest bank announced a long-awaited overhaul, forcing the lender to make its plans more radical. HSBC’s strategy update is expected to come alongside its full-year results on Feb. 23. The London-based lender has seen its share price drop by a third in the last year amid the Covid-19 pandemic. The bank has previously said it will reduce its headcount by 35,000 and target cost reductions in underperforming units in the U.S. and Europe.
9. Heathrow Loses European Airport Crown in Pandemic Year
Istanbul’s new hub, completed in spring 2019, processed 23.4 million passengers in its first full calendar year of operation, edging past Heathrow, where traffic collapsed by 73%. Paris-Charles de Gaulle, the second-busiest airport in Europe during 2019, stood slightly ahead of its London rival as of the first 11 months of 2020. It reports its full-year data later Monday. The virus outbreak and the resulting travel restrictions have battered European airlines since March. A push to replace country-specific entry curbs with pre-flight testing has unraveled with the rise of more-infectious strains in the U.K. and elsewhere. Britain’s quarantine mandate and a shifting list of exempted countries have also discouraged travel to London.
10. Dubai’s Property Glut Could Mean Two More Years of Price Drop
Dubai home prices will likely extend declines this year and next as the market works to clear an oversupply that’s been a drag on values since 2014. A property glut and faltering demand have driven Dubai home prices down by more than 30% since the market peaked seven years ago, a decline made worse by the coronavirus pandemic. The government has responded by setting up a committee to manage supply and demand as some of the city’s largest developers continued with construction. Some developers have been calling for a moratorium on new projects in Dubai.