• HSBC fails to beat expectations for 2018 earnings, reporting 15.9 percent higher in pre-tax profit and 4.5 percent in revenue, in comparison to 2017, against the expected 23.8 percent increase in pre-tax profit and 6.28 percent for revenue
• Trade talks between the US and China begin today in Washington, which according to a top official from the US Chamber of Commerce, can only progress if Trump’s administration also creates ways to enforce a trade agreement
• Asian stocks mixed after the US were claiming that Chinese mobile network gear may cause a cybersecurity threat to countries who use their equipment. The Hang Seng index fell 0.36 percent, in comparison to Nikkei 225 which rose 0.23 percent along with the ASX 200 at 0.3 percent
• More Labour MPs may resign, following the seven who resigned on Monday due to the ‘frustration over the leadership’s reluctance to back another EU referendum’, unless their concerns have been heard
• 16 US states are filing a lawsuit against Trump’s administration in relation to the decision to declare an emergency to raise funds for a Mexican border wall
• Confidential US commerce department report suggests a potential tariff increase in imported autos, after Trump previously promised European Commission President that no additional tariffs will be applied on European cars for the time being
• Spot gold increased to $1,322.41 per ounce on Monday, its strongest level in over two weeks, whilst Palladium reached a record high of $1,449 an ounce

Asian overnight: Asian markets failed to really gain traction overnight, with marginal losses in China and Hong Kong counteracted by similarly small gains in Japan and Australia. This comes despite the confirmation that the US and China will once more meet to resume trade talks in Washington on Thursday. Meanwhile, the RBA released their latest monetary policy minutes, with the bank seeing little reason to adjust policy in the near-term

UK, US and Europe: Looking ahead, the UK jobs report should provide us with some form of event-based volatility, bringing the pound into focus. On the mainland, all eyes will be on the ZEW economic sentiment survey following a host of weak economic data centred around the German economy. Meanwhile, the return of the US markets should bring greater volumes and a wider driving force amid recent US market gains

South Africa: Our local bourse is offsetting some of its short term gains this morning in what is expected to be a news light day. Rand is again underperforming its emerging market currency peers after news that South African Airlines will be receiving further bailout funds from government. The dollar is marginally weaker against its developed market currency counterparts, while metal prices trade mixed and oil prices trade flat on the day

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

Source: Daily FX Economic Calendar

9.30am – UK employment data: December unemployment rate to hold at 4%, while average earnings (including bonus) expected to rise 3% from 3.4%. Markets to watch: GBP crosses
10am – German ZEW (February): economic sentiment to fall to -18.4 from -15. Markets to watch: EUR crosses

Corporate News, Upgrades and Downgrades

TBC Bank upgraded to buy at VTB Capital
Ashtead reinstated overweight at Morgan Stanley
Asiamet Resources rated new buy at Berenberg
Ryanair upgraded to buy at SocGen

IAG downgraded to reduce at Oddo BHF
Wizz Air downgraded to hold at SocGen
Nestle downgraded to sector perform at RBC
Worldline downgraded to neutral at Citi
 

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