Closing changes for the main European equity bourses:
- German DAX +0.8%
- UK FTSE -0.1%
- Italy MIB +0.7%
- Spain IBEX -0.1%
- French CAC +0.1%
Spanish parliament voted in a new government today, adding some stability but the stock market wasn’t impressed.
Archives of “January 7, 2020” day
rssUS’ Pompeo to deliver remarks to the media at 1500 GMT
US secretary of state, Mike Pompeo, will brief the media later today
No further details on what it may be about. Here is the press release by the US Department of State. Just take note as it could relate to tensions in the Middle East.
10% corrections in S&P 500
It has been more than a year since the S&P 500 went down 10%. In the nearly 17 years since March 2003, there have been 19 declines of 10% or more. There have been 82 declines of 5% or more.
Drawdown Qty Trading days Days since last
5% 82 4234 64
10% 19 4234 298
20% 5 4234 259
25% 2 4234 2731
33% 1 4234 2831
More details on Iran’s reported retaliation ‘scenarios’ against the US
Iran says that the “revenge operation” will not just be one single operation
Iran’s Supreme National Security Council secretary, Ali Shamkhani, says that “a total of 19 bases, including 11 head bases, the closest to the eastern and western borders of Iran, and along with 8 US bases in the north and south of Iran, are on high alert”.
Adding that “we are aware of their military personnel and equipment and we are tracking their smallest developments”.
This is basically an outright threat towards the US and it will be interesting to see how Trump responds to this – whether verbally or actual military action.
I’ve said it before, the first rule of military response is to never talk about it. The fact that Iran is so brazen about the issue certainly raises some eyebrows about what they plan to do.
Iran lawmakers reportedly approve bill designating Pentagon as terror group
ICANA, Iran parliament’s official news service, reports
It says that under the legislation, “all members of the Pentagon and related companies, as well as actors and commanders involved in the martyrdom of Qassem Soleimani, are designated in the list of terror groups”.
The bill is drafted as a form of retaliation against the recent US attack that killed Soleimani and was passed by a vote of 228-0, with two abstentions.
I would take this as a warning sign to potential escalation in geopolitical tensions in the Middle East but until military action is taken, I reckon markets may turn a blind eye to developments such as the above for the time being.
#Bitcoin is up 13% in the last 3 days.
Iran is said to be assessing 13 retaliation ‘scenarios’ against the US
Fars News Agency reports
The headline is crossing the wires now with Iran being cited as saying that the weakest retaliation scenario itself will cause a “historic nightmare”.
Markets are turning more defensive again on the session as bonds catch a mild bid with USD/JPY slipping to a session low of 108.26 currently.
Markets Roundup for 2019
Nikkei 225 closes higher by 1.60% at 23,575.72
Japanese stocks climb as geopolitical fears subside
US-Iran tensions are still persisting but markets are sensing that the fear is abating and that is helping to push Asian equities higher on the day. The Hang Seng and Shanghai Composite are also both up by 0.5% going into the closing stages of the session.
Looking ahead, European equities should also see a rebound from the late surge in Wall St overnight with US futures also up by 0.2% currently. In the currencies space, the dollar is keeping more firm to start the day though USD/JPY is near unchanged around 108.37.
Iran’s Zarif: US attack on Soleimani has made the world, US more unsafe
Comments by Iranian foreign minister, Javad Zarif
Still plenty of talk and plenty of threats but little follow through by the Iranian camp after the airstrike in Baghdad last Friday. As such, markets have turned a little bit more greedy with US stocks recovering yesterday and futures are pointing higher today as well.