Five Things Everyone Will Be Talking About Today
Commodities get slammed, Euro-area PMIs beat and the Kirchner era ends in Argentina. Here are some of the things people in markets are talking about today.
Copper dropped below $4,500 a metric ton for the first time since 2009, declining as much as 3 percent in Shanghai before recovering somewhat to trade down 2.5 percent at $4,468 by 10:45 a.m. London time. Nickel dropped to a new 12-year low. Zinc, which staged a rally on Friday following the announcement of cutbacks in Chinese smelting, suffered a reversal and dropped 4.3 percent. Zinc imports to China have jumped to highest since January 2014 as traders sought to take advantage of an arbitrage opportunity in London pricing.
Economic activity in the Euro-area hit the highest level since May 2011 in October according to a composite index of services and manufacturing by London-based Markit Economics which rose to 54.4 from 53.9. In Germany, both services and manufacturing PMIs increased, well ahead of economist expectations for a slight decline in those readings. These strong readings may lead to division at the European Central Bank which is expected to announce further easing at next week's policy meeting.
Kirchner era ends in Argentina
Argentina elected centre-right Mauricio Macri to be president in a decisive vote which brings to an end the 12 years of socialist governments led by Nestor Kirchner and later his wife Cristina Fernandez. Macri, a 56-year-old Buenos Aires native, is pledging to quickly reverse much of the Kirchners’ policies and open up the economy, a move that is already being welcomed by international investors.
China still worries investors
Hedge fund managers are still worried about China, including the ability of Chinese authorities to revive the economy and the likelihood of another yuan devaluation. The Shanghai Composite Index dropped 0.6 percent as restarting IPOs added to supply concerns. Meanwhile, shares of Guotai Junan International Holdings Ltd., one of China's biggest securities firms, fell 12 percent after the company issued a statement saying it has not been able to contact its Chairman and Chief Executive Officer, Yim Fung, since Nov 18.
There still seems to be no light at the end of the tunnel for oil bulls who see little hope of supply cuts at next week's OPEC meeting in Vienna. Continued low oil prices are starting to hurt in Saudi Arabia, where pressure is now building for the Gulf kingdom to drop its currency peg to the dollar rather than impose more budget cuts. One state that has managed to do well in 2015 is Mexico which hedged its oil sales at $76.40 for 2015, meaning it is due a payment of at least $6 billion next month.
What we've been reading
This is what's caught our eye over the weekend.
- Another day, another M&A deal. Allergan-Pfizer said to be close to a $150 billion tie-up.
- The case for how the Fed has already made its policy mistake.
- World's top miners risk $10 billion of earnings on carbon cost.
- China's Jack Ma said to follow in Bezos' footsteps.
- Unemployment debt still weighs on U.S. states six years after recession.
- VW's bad news drip keeps getting worse.
- That was nuts, what about next year?
Want to receive this post, and more, into your inbox every morning? Sign up here