Asia
China’s CSI 300 was the best-performing stock market in the Asia-Pacific region at the start of the new trading week, rising over 1% to 4,336 points. While many global equity markets are at record highs, China equities are still way off the levels seen in the middle of 2015 before the 2016 crash.
Japan’s Nikkei and Topix indices, as well as Hong Kong’s Hang Seng, also started positively. Japan’s recent stock market gains are still being held back by a stronger yen, which remains close to a four-month high above 110 against the dollar. The US currency’s weakness after the government shutdown also casts doubt on Japanese markets’ ability to push significantly higher this week.
On Tuesday morning, the Bank of Japan will make a decision on interest rates, which are likely to be held at -0.10% and the 10-year bond yield target kept at 0%.
Europe
It’s a busy week for UK economics, with government borrowing figures in view on Tuesday, and at the end of the week the first estimate of Q4 GDP will be released. Wednesday will see the release of unemployment and earnings figures, which are likely to confirm that British workers’ pay is still being squeezed by inflation.
Dixons Carphone (DC) brought forward a trading announcement a day after weekend news that its chief executive, Sebastian James, will be leaving to head up Boots. In the 10 weeks ended January 6, 2018, the electrical retailer’s group revenue was up 4% on the year earlier. A strong performance in Greece was countered by concerns over UK mobile sales and profit margins in electricals. The company’s shares rose over 2% to 192p.
Signs of progress in Germany’s political impasse helped the euro moved higher against the dollar, continuing its recent strong run. Euro strength was the trigger for a drop in equities across the region’s stock exchanges.
North America
The US government shutdown didn’t spoil the positive mood on Wall Street on Friday. Nevertheless, US stock markets are expected to open marginally lower on Monday. US earnings season continues, with Netflix (NFLX) one of the highlights today – although the online TV subscription service releases results after the market close. Consumer companies such as Johnson & Johnson (JNJ) and Procter & Gamble (PG) release fourth-quarter figures on Tuesday.
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