Omicron Slumps UK and Eurozone Growth to 11-Month Low; banknote maker De La Rue warns of profits – business live | Business
Hello and welcome to our ongoing coverage of the global economy, financial markets, eurozone and business.
Global equity markets are starting the new week on a high note as investors worry about impending interest rate hikes and the Ukraine crisis.
Stocks fell in many Asia-Pacific markets after Wall Street ended last week with more losses. The S&P 500 fell 1.9% on Friday as January continues to be one of the worst months for stocks since the pandemic began.
Holger Zschaepitz
(@Schuldensuehner)Global equities lost $4.2tn mkt cap this week, the most since October 2020 due to the tech rout and as investors reacted to signs of slowing growth in some of the value stocks towards which they had filmed earlier this year. Global equities now represent 136% of global GDP, up from 144% in December. pic.twitter.com/rRV9I5Fcze
that of Hong Kong Hang Seng index, and South Korea KOSPI, are both down 1.25% today, while Sensex lost 2%.
European stocks are also expected to open lower as traders prepare for a Federal Reserve meeting on Wednesday. The US central bank is expected to confirm that it is on track to begin raising borrowing costs and shrinking its balance sheet soon.
IGSquawk
(@IGSquawk)European opening calls:#FTSE 7479 -0.20%#DAX 15559 -0.29%#CAC 7049 -0.27%#AEX 760 -0.54%#MIB 26896 -0.61%#IBEX 8678 -0.20%#OMX 2301 -0.54%#SMI 12298 -0.46%#STOXX 4212 -0.41%#IGOpeningCall
*(Note that this is the % change from the opening of the index, as futures contracts see large movements in risk).
Like Olivier Allen, market economist at Capital city Economy, says:
“With extremely high inflation, the Fed is on track to phase out the ultra-loose monetary policy that has been a key support for stock prices for over a decade now.”
The situation in Ukraine is also causing concern, after the US government ordered the families of all US embassy staff in Ukraine to leave the country amid heightened fears of a Russian invasion.
Jim Reid of German Bank said:
Geopolitics does not always have an impact on the markets, even if they are very tense and charged. However, the current situation between Russia and Ukraine seems to add to the risk at the moment and deserves special attention.
But Wall Street could recoup some of last week’s losses, at the start of a busy week for corporate earnings – including Microsoft, Apple and Tesla.
Michael Goodwell
(@MichaelGoodwell)Publications on this week’s results
(Going through @eWhispers) pic.twitter.com/5W837KzMOe
Also coming today
Some UK workers will return to the office today for the first time in weeks as Plan B Covid-19 restrictions are rolled back.
The latest corporate “flash” PMI surveys in the UK, France, Germany and the wider Eurozone will be released this morning.
They could show that the British economy recovered in January, after the Omicron coup in December, while Alvin Tan of Royal Bank of Canada Explain :
The economic impact of the omicron variant was probably relatively moderate. Data from early January already indicates some recovery in restaurant reservations, while card spending data also showed signs of recovery.
The recovery as well as expectations for the lifting of restrictions should support the PMI survey, and we expect the January services PMI to strengthen to 54.8.
Agenda
- 09:00 GMT: Flash survey of eurozone purchasing managers for January
- 09:30 GMT: Flash survey of UK purchasing managers for January
- 13:30 GMT: Chicago Fed National Activity Index for December
- 14:45 GMT: Flash survey of US purchasing managers for the month of January