As noted by Bloomberg, the five key market drivers for this week are heavily political, and broader markets can be expected to be driven in part by headlines.
Key quotes
“Saudi Arabia’s evolving account of the death of journalist Jamal Khashoggi — which the kingdom’s foreign minister on Sunday cast as a “tremendous mistake” perpetrated by a “rogue operation” — has elicited skepticism from officials in the U.S. and its allies as they weigh how to respond. Meanwhile, Treasury Secretary Steven Mnuchin emphasized the importance of the U.S.’s economic ties with Saudi Arabia, reinforcing the Trump administration’s priorities.”
“Chinese President Xi Jinping vowed “unwavering” support for the country’s private sector, the latest response from Beijing to concern over the outlook for the economy. The remarks came after top officials moved to shore up confidence with a rare show of coordinated comments on Friday.”
“The coming week brings a pivotal European Central Bank meeting Thursday as policy makers begin to scale back asset purchases. Saudi Arabia’s “Davos in the Desert” kicks off amid an exodus of many movers and shakers following the death of the dissident journalist. It’s a mega week for tech earnings, with Amazon, Alphabet, Microsoft and Intel all due to report.”
“Asian stock futures are mixed heading into the trading week after U.S. equities edged lower Friday. The start of the week will test China’s rally Friday after officials waded in to assure investors. Bonds sold off, with 10-year Treasury yields hovering near 3.20 percent. The dollar lost ground against most of its Group of 10 peers, but the yen fell.”
“Mnuchin is open to changing how the U.S. determines which nations are gaming their currencies, a move that could give Trump the chance to officially brand China a foreign exchange-rate manipulator as he seeks leverage to redefine trade terms. While the U.S. refrained from labeling China a currency manipulator in a semi-annual report released last week, it was critical of China, highlighting U.S. concerns about the country’s bilateral trade surplus.”
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