ETX Capital Daily Market Bite, 11th January, 2013: Flattish Markets; UK Data Poor
January 11, 2013 11:52 am
January 11th, 2012, Daily Market Bite from Ishaq Siddiqi Market Strategist.
After yesterday’s late sell-off in European trading, equities are starting the day out on a firmer note this morning benefitting from a strong close in US trading yesterday evening and from news out of Japan where a new fiscal stimulus package was announced by the incoming government of recently elected Prime Minister Abe. In contrast news out of China where inflation rose more than expected as food prices have been surging due to a much colder than average winter is putting a lid on the prevailing positive sentiment this morning as some are worried that this unexpected rise in prices might limit the likelihood of further monetary easing and the implementation of additional fiscal stimulus. No doubt the news out of Japan is encouraging however at the same time it needs to be seen if indeed these measure will also have a positive long term impact on the economy or just provide a short term boost and in the end just lead to a worsening of the already dire financial situation in Japan. In regard to worse than expected Chinese inflation data, the spike in food prices might just very well be temporary as it is closely related to prevailing bad weather conditions and therefore carries less weight than it normally would with the Chinese government likely to wait and see if a new trend of rising prices is developing before undertaking any measures at all. There is very little economic and corporate data out today however of some interest might be a speech by Fed’s Plosser in the early afternoon speaking on the US economic outlook. Overall markets are likely to remain range-bound with very little new data available at this point of time, as investors are probably preferring to stay mostly on the side lines until the US earnings season is shifting up a gear next week when several major banks and technology companies are reporting their quarterly figures.
January 11th, 2012, Daily Market Bite from Ishaq Siddiqi Market Strategist.
After yesterday’s late sell-off in European trading, equities are starting the day out on a firmer note this morning benefitting from a strong close in US trading yesterday evening and from news out of Japan where a new fiscal stimulus package was announced by the incoming government of recently elected Prime Minister Abe. In contrast news out of China where inflation rose more than expected as food prices have been surging due to a much colder than average winter is putting a lid on the prevailing positive sentiment this morning as some are worried that this unexpected rise in prices might limit the likelihood of further monetary easing and the implementation of additional fiscal stimulus. No doubt the news out of Japan is encouraging however at the same time it needs to be seen if indeed these measure will also have a positive long term impact on the economy or just provide a short term boost and in the end just lead to a worsening of the already dire financial situation in Japan. In regard to worse than expected Chinese inflation data, the spike in food prices might just very well be temporary as it is closely related to prevailing bad weather conditions and therefore carries less weight than it normally would with the Chinese government likely to wait and see if a new trend of rising prices is developing before undertaking any measures at all. There is very little economic and corporate data out today however of some interest might be a speech by Fed’s Plosser in the early afternoon speaking on the US economic outlook. Overall markets are likely to remain range-bound with very little new data available at this point of time, as investors are probably preferring to stay mostly on the side lines until the US earnings season is shifting up a gear next week when several major banks and technology companies are reporting their quarterly figures.
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