- Equity Markets: Yesterday markets had a positive day in both the US and Europe, with the S&P500 +0.63% and the Nasdaq +0.68%. In Europe the Eurostoxx 600 was up 0.93%, as the market looked beyond the Maduro news in Venezuela. In the US, Energy Equipment and Services rose 7% driven by expectations of bountiful work for companies in Venezuela. The ISM Manufacturing index came out at 47.9 for December, which was below expectations of 48.4, but the Employment element of the survey rose to 44.9 from 44.0 previously. Overnight in Asia, markets were strong across the region, with Japan +1.7%, China +1.6% and Hong Kong +1.4%, as investors focused on China’s AI industry progress, and signs of economic recovery, supported by continued Government action to curb excessive competition.There are no major corporate announcements expected today, with only Next reporting its Q4 Sales, which met expectations and the company increased guidance for FY26, potentially indicating healthier consumer spending in the UK.
- Macro: Geopolitics continues to drive sentiment in the commodities space, with refining stocks expected to benefit in the US from better flows of Venezuelan heavy crudes, but overall, the impact from changes in the country’s 1mb/d of production (<1% of Global daily supply) is unlikely to impact in the near term. Political developments in Iran (4.7% global supply) are potentially more impactful. Copper remains close to its recent highs at $12,991/mt after hitting $13k yesterday as mine outages and trade dislocations fuel concerns over supplies. UK Car registration data will be released at 9am, and UK Composite and Services PMIs at 9.30am will help fill out this picture. For Irish names, the AIB Services and Composite PMI data were quite weak at 54.8 and 53.6, down from 58.5 and 55.8 respectively. In Europe German and French CPI may continue to support a stable policy position at the ECB as German CPI is expected to be 2.2% YoY and French CPI at 0.7%. The only data out of the US is the Final revision of December’s Services and Composite PMIs, which are expected to remain slightly above the 50 level at 52.9 and 53.0 respectively. Labour data focused, and centrist Fed member Barkin is speaking at 1pm, which may help signal the Fed’s reading of recent labour statistics.
- Stocks: GSK: (Neutral PT 1660p, 9% downside) Chinese approval of Nucala drug for COPD treatment seen as a positive step for GSK. Novo Nordisk: (Overweight PT DKK451, 30% upside) Wide availability of new Wegovy pill in the US across 70k pharmacies starting at $149 per month. Nestle (Overweight PT CHF87.76 +15% Upside) Details relating to suspected toxin found in infant nutrition products and batch recall
- Debt: Bond markets recovered Friday’s losses with yields 2/3 basis points lower across the board.
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