| Welcome to your morning markets update, delivered every weekday before the European open. Good morning. A U.S. airstrike killed a senior Iranian general, Spain is finally set to have a government again and a U.K. retail bellwether is reporting. Here's what's moving markets. Airstrike U.S. President Donald Trump ordered an airstrike that killed one of the most senior and revered generals in Iran, Qassem Soleimani, a move that raises the risk of further severe tensions between the two nations. Iran's supreme leader, Ayatollah Ali Khamenei vowed that "severe retaliation" awaits Soleimani's killers. Oil prices surged to levels not seen since an attack on Saudi Arabia's oil infrastructure in September, U.S. stock futures declined as traders consider the potential for more escalation, which could have a broader de-stabilizing impact on the Middle East and gold rose as investors fled to haven assets. Spain's Government Spain finally looks set to get a government. The country has been without a proper one in place since March, when it held the first of two elections in 2019, but acting Prime Minister Pedro Sanchez has now secured the support of a Catalan separatist party to help him take office for the second time. Now the question will be the price that Sanchez's Socialists have had to pay to secure that support and there will be scrutiny of the policy plans, which are set to include raised taxes for wealthy individuals and big companies. Spanish banks and energy companies will likely be in focus for stock investors. Next Bellwether The first clues of how the U.K. high street fared over the Christmas period will arrive with bellwether Next Plc, amid hopes that the decisive election result and perception of some clarity about the near-term Brexit outlook would spur consumers to open their wallets over the festive season. The update from Next is always closely watched and it comes ahead of a slew of other trading statements from the sector next week, including all the major supermarkets and Next's rival Marks & Spencer Group Plc. Ghosn Watch The world continues to watch for further details on Carlos Ghosn's escape from Japan to Lebanon and nowhere more so than at Nissan Motor Co., which Ghosn used to run and where executives are worried about what he might say in the expected media blitz to follow. Lebanon said it would probe the allegations against Ghosn should Japan seek his return and could even hold a trial in Beirut, though Japanese Prime Minister Shinzo Abe has mostly continued with his normal routine so far. If nothing else, Twitter has been set ablaze by the story's pun potential, something this 5 Things column would never stoop to. Coming Up… The minutes from the Federal Reserve's latest policy meeting will be released after the European close and markets will be watching for hints on its plans for the repo market and its resolve to keep interest rates unchanged. Crude oil inventory data will arrive in the European afternoon and the major car makers will all provide updates on sales in the U.S. during December. U.S. manufacturing data, French inflation and German unemployment numbers are all still to come too. What We've Been Reading This is what's caught our eye over the past 24 hours. And finally, here's what Mark Cudmore is interested in this morning It's only the second trading day of the year and S&P 500 E-Mini futures are on track for a bearish key-day reversal after reaching a record high in early trading. This is a very important short-term technical signal and shouldn't be easily dismissed. It occurs when an asset in an established uptrend opens above the previous day's close, prints a fresh high and then reverses so powerfully that it falls below the previous day's low and closes below that day's open. It's one of the most clear indicators that the rally had gone too far, too fast. The spike in oil prices was the catalyst and the U.S. stock market is the main equity victim so far because it was the most expensively priced, rather than because the U.S. economy is the most vulnerable to an oil shock. It's still early in the session so much can change, but U.S. equity investors will be correctly getting nervous about how far a pullback could run in the context of the past three months' powerful gains.  Mark Cudmore is a Bloomberg macro strategist and the Managing Editor of the Markets Live blog. Bloomberg Terminal users can follow him there at MLIV Like Bloomberg's Five Things? Subscribe for unlimited access to trusted, data-based journalism in 120 countries around the world and gain expert analysis from exclusive daily newsletters, The Bloomberg Open and The Bloomberg Close. Before it's here, it's on the Bloomberg Terminal. Find out more about how the Terminal delivers information and analysis that financial professionals can't find anywhere else. Learn more. | 
Post a Comment