- As MPs prepare to vote on amendments to the Brexit Plan, Theresa May has set the 13th of Feb as the date to hold a second round of voting on her Brexit deal.
- Apple is set to release its Q4 earnings after market close today. According to Zacks Investment Research, the EPS is expected to be $4.17, an increase of 7% YoY. This will be a crucial earnings report for Apple, as it pre-announced its December results on January 2nd, lowering revenue expectations by 8%, and blaming the slowdown on weaker than expected sales of iPhones in China.
- The US DoJ has filed criminal charges against Huawei for allegedly stealing trade secrets from T-Mobile. This comes after it is seeking to extradite its CFo Meng Wanzhou to the US from Canada following her arrest on fraud charges in early December.
- Asian stocks were trading lower on Tuesday morning as ongoing trade tensions between the Us and China resume talks. In mainland China, the Shanghai composite was trading 0.5% lower, whilst the Shenzhen composite was down by 1.36%. Meanwhile the Nikkei 225 was down 0.12%, and Hong Kong's Hang Seng and South Korea's Kospi were down 0.59% and 0.3% respectively.
- Donald Trump has mentioned that another government shutdown is “certainly possible” as he believes there is a low chance that congress will fund the wall. It comes as economists forecast the shutdown cost the economy $11 billion.
- The Dow Jones industrial Average closed 209 points lower at 24,528 as Caterpillar reported weaker than expected quarterly earnings and Nvidia cut their revenue forecast. The S&P 500 and Nasdaq followed the Dow as they closed 0.8% and 1.1% lower respectively.
- European stocks closed the first trading day of the week lower as concerns over Brexit still loom and Tesco announces it will cut jobs and replace workers with vending machines.
- After leaving policies on hold at last week´s meeting, ECB president Mario Draghi warned investors on Monday that the European union's growth dip could be bigger and longer than initially expected.
- Gold prices remained stable near the $1,300 mark on Monday, as investors await for more developments on the US-China trade wars as talks are expected to be held in the next few days.
- Oil dropped on Monday as weak industrial earnings from both the US and China raise further concerns about a global economic slowdown.
Asian overnight: Markets were volatile yesterday after disappointment following Caterpillar earnings, and a slow recovery in sentiment was knocked by news that the US had charged Huawei with corporate theft and sanctions violations. The move threatens to escalate the US-China trade standoff, which had seemed to be calming down ahead of talks between the two sides this week. BHP Billiton is up 2.1% in Australia after not trading yesterday on account of a public holiday within the region. Tencent Holdings is flat in Asia this morning suggestive of a similar start for major holding company Naspers
UK, US and Europe: Global markets are trading lower this morning, taking their lead from US markets overnight which fell on weaker than expected earnings and suggestions of a weaker forward outlook amidst trade uncertainties and a slowdown in a projected global economic growth. British MPs are expected to vote on 16 amendments to Theresa May's Brexit deal tonight, including one proposed by Labour's Yvette Cooper which could rule out a no-deal Brexit by delaying the UK's exit from the EU for at least 9 months. Downing Street says Theresa May is willing to go to Brussels to renegotiate the Irish backstop in an attempt to pass her Brexit deal. The 2.5% jump on the cable in the past week shows that the market is less fearful of a no-deal Brexit, as other outcomes such as an amended deal or a new referendum are seen as more likely than a hard Brexit.
Economic calendar - key events and forecast (times in GMT)
Source: Daily FX Economic Calendar
Corporate News, Upgrades and Downgrades
- Royal Mail has downgraded letter volume guidance, blaming new European privacy regulations. Overall performance for the nine months to 31 December was in line with forecasts, through letter volumes were down 8% and revenue was 6% lower.
- Domino’s Pizza said that it expected annual pre-tax profit to be at the lower end of expectations, as weaker international sales offset a strong UK performance. Sales rose 5.5% to £339.5 million for the three months to the end of December.
- PZ Cussons reported a 20% drop in first-half profit, to £26.7 million, while revenue was 10% down at £335.1 million. Annual guidance was downgraded, with adjusted profit for the full year expected to be around £70 million.
- Hargreaves Lansdown saw a 6% drop in assets under administration, to £85.9 billion in the first half, while the number of clients rose by 45,000, to 1.136 million. Pre-tax profit rose 4% to £153.4 million.
Aeroports de Paris upgraded to neutral at Citi
BAT upgraded to overweight at Piper Jaffray
Rheinmetall upgraded to outperform at MainFirst
TI Fluid upgraded to buy at Citi
Diploma downgraded to hold at Berenberg
Halma downgraded to hold at Berenberg
JM downgraded to sell at SEB Equities
Polymetal downgraded to hold at VTB Capital
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