• Another shutdown of the US government has reportedly been avoided in the latest round of negotiations. Following the longest shutdown in the history of the US at the start of this year, the government was opened temporarily whilst budget negotiations continue.
• US markets had a mixed session yesterday with the Dow down 0.21% but the S&P and Nasdaq marginally higher at 0.13% and 0.07% gains respectively. Could the end of shutdown fears spur a rally in today’s session? 
• With a subdued session in most of yesterdays major markets, the Nikkei was the stand out from the crowd with a gain of 2.61%. The gain saw the index rebound from its monthly low on the back of strong demand for automakers and machinery makers as well as a weaker yen.
• UK economic growth over the last 3 months was the weakest since 2012 which is thought to be attributed to global and Brexit worries. Meanwhile, a study has claimed British companies have diverted £8 billion to the EU amid the uncertainty.
• Brent and WTI were up 0.37% and 0.29% respectively. El Molla, the Egyptian petroleum minister has said that he believes $60-70 is a fair price for a barrel of oil.
• Gold has firmed slightly following a pull back of the US dollar amid ongoing US-China trade talks
• London Cocoa was up over 2% yesterday but there are concerns that this may be short lived as it tests its resistance level seen over the past 6 months. 
• Iron Ore has retreated from its 2 year high following a 20% in the past week.
• Ocado has begun to claw back some of their lost market cap following last weeks warehouse fire. The food delivery company is now trading at the price it was 2 weeks ago.
• Plus 500 shares have fallen over 30% following the announcement that they expect to miss earnings expectations which they attribute mainly to tightening regulations by the EU. 

Asian overnight: Japanese markets were playing catch up overnight following Monday’s bank holiday, with both the Nikkei and Topix rising 2% over the course of the session. Sentiment is likely to be guided by any developments in trade talks between the US and China, yet at least we are seeing tentative signs of a possible breakthrough in negotiations to avoid another government shutdown. This has helped the dollar to rise to the highest level since December yesterday. However, while a deal appears to have been reached, it is still down to President Trump to approve that deal.

UK, US and Europe: In the latest of Brexit woes, a ferry contract has been cancelled with the company Seaborne Freight. The deal received criticism as the company owned no ships and had never ran a ferry service before. A fund of £102 million was used to reduce congestion on the Dover port in the case of a no-deal Brexit. The government asserted that the procurement process which involved companies submitting bids for the funds was done competitively and that the Department of Transport acted transparently.

Looking ahead, central bankers are in focus, with appearances from Jens Weidmann, Mark Carney, and Jerome Powell will dominate sentiment. Coming at a time where global growth is slowing and inflation is also on the slide, markets will be watching intently for any more dovish signals from these prominent central bankers.

South Africa: Markets have found some solace in news that the US policymakers had reached a tentative deal which looks to avert the commencement of another government shutdown later this week. Markets will now look to the next bout of trade talks this week ahead of the March 1 deadline (before US raises import tariffs again) for resolve on the matter. Our local bourse is trading firmer on the improved global market sentiment although the rand remains weakened as the dollar remains firm. Industrial rand hedge counters have been the play (in the short term) leading our local bourse higher while, financial and retail counters have proven to be more vulnerable to rand weakening. Metal prices trade mixed this morning with precious metals slightly higher and most base metals slightly lower.

Economic calendar - key events and forecast (times in GMT)

Source: Daily FX Economic Calendar

11.30pm – Westpac Australia consumer confidence (February): index to fall to 99.2 from 99.6. Markets to watch: AUD crosses

Corporate News, Upgrades and Downgrades

• Nissan's net income for the last quarter fell 76%
• TUI suffered a fiscal Q1 loss of €83.6 million for underlying earnings, compared to a €36.7 million loss a year earlier. Weather conditions and a weaker pound hit margins.
• AA said that its motor insurance business saw strong growth for the full year, with policies up 16% to 731,000, but roadside breakdown members fell 2% to 3.21 million. Capital expenditure and full-year earnings are expected to be in line with guidance.
• Stagecoach has agreed a new short-term rail franchise with the UK Department for Transport, running from 3 March until 18 August.
• Debenhams has secured financing of £40 million as it looks to renegotiate debts with lenders and accelerate plans for store closures in the latest of British high street stores to face difficulties. 
• Softbank have invested $940 million in Nuro a self-driving delivery service.

Galp upgraded to neutral at Goldman
Leoni upgraded to buy at Quirin Privatbank AG
Polymetal upgraded to neutral at JPMorgan
Rio Tinto upgraded to buy at Goldman

BHP Group downgraded to neutral at Goldman
Britvic cut to equal-weight at Morgan Stanley
Spire Healthcare downgraded to underperform at Credit Suisse
Fiat Chrysler downgraded to add at AlphaValue

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