Asia
Wall Street’s turn lower on Monday night and a rise in global bond yields brought an abrupt end to the recent strong run in Asia-Pacific markets. Hong Kong’s Hang Seng has risen around 2,000 points since the start of the year to a record level over 33,000, but today the index fell 1%. But in percentage terms Japan’s price-weighted Nikkei index was the biggest daily faller in the region, dropping by nearly 1.5% to 23,291 points. China’s CSI 300 also lost 1% to 4,256 points. Tomorrow sees the release of the manufacturing purchasing managers’ index (PMI) for January. The survey is expected to show that the sector remains in expansionary territory.
Europe
A softening in the pound against the dollar and euro failed to help UK-listed shares. Instead, the FTSE 100 caught the global mood of caution coming from the US and was down around 30 points to 7,641 in midmorning trading.
The FTSE 100’s weakness was driven by banks and miners, with the biggest faller being Anglo American (AAL).
Bank of England Governor Mark Carney is due to give evidence to the House of Lords economic affairs committee about the Bank’s Brexit forecasts.
Europe has posted its strongest annual growth since the financial crisis with a rise of 2.5% in 2017 – the UK’s GDP rose by 1.8% last year. French economic growth was better than expected at 1.9% for 2017, compared with 1.1% for 2016.
The euro pushed above $1.24 against the dollar after the news, which again held eurozone markets back.
North America
The US is once again the focus of global investors’ attention this week. President Trump makes his State of the Union address tonight, while tomorrow sees the Federal Reserve announce its latest interest rate decision. The Fed is not expected to raise interest rates on Wednesday and it is not meeting again until March, when it is likely to raise rates again by a quarter of a point.
McDonald’s (MCD) and Pfizer (PFE) report before the market opens on Tuesday.
US consumer confidence for January is also in view today.
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