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Morning report

Markets Quiet with US Closed

Global markets were relatively subdued on Monday and investors took the opportunity to relax ahead of a busy week as the US markets stayed closed for Martin Luther King Jr. day. European and UK equities peeled back from recent record highs, while Asia was mixed.

US market closed

US stock and bond markets are closed on Monday in observance of the Martin Luther King Jr. holiday.

European and UK stocks edged lower

European equities pulled back from record highs as the closed US markets provided investors an opportunity to catch their breath following Friday’s rally, and as they prepare for a busy week of economic data and the European Central Bank’s first policy meeting of the year. The Stoxx Europe 600 dipped lower by -0.1%, mostly weighed by drops in French and British stocks. Air France shares descended -4.6% after a broker downgraded the stock from outperform to neutral, citing limited perceived benefits from the airline’s planned turnaround. Fellow airlines Lufthansa (-2.2%), International Consolidated Airlines (-2.1%) and EasyJet (-1.9%) also fell, perhaps in response to increases in oil prices following supply disruptions in Libya and Iraq at the weekend. German equities bucked the trend in Europe, led by gains in electronic payments service provider Wirecard (+1.6%).
The UK’s FTSE 100 slipped -0.3% as focus in the country shifted back towards fears of a potential hard Brexit on an otherwise quiet day of trading. Stocks that weighed the most on the FTSE 100 included NMC Health (-3.7%), Burberry Group (-2.2%), BT Group (-1.8%) and Rolls-Royce Holdings (-1.7%). Defence company Bae Systems topped the performance tables, with shares jumping +3.7% higher after the company announced it was acquiring a pair of US defence companies. Outside the benchmark index, boutique tonic water maker Fevertree Drinks plummeted -27.2% after reporting a smaller-than-expected +10% rise in 2019 revenue due to subdued UK Christmas trading.

Asian markets mixed

Asian markets were mixed ahead of the Bank of Japan’s monetary policy meeting which began late in the day’s trading. The Shanghai Composite (+0.7%), Kospi (+0.5%) and Nikkei 225 (+0.1%) rose, while the Hang Seng slid -0.9% lower.

The ASX 200 added +0.2%, closing on a new record high for the fifth-straight session thanks to robust gains in the major iron ore minors.

Crude flat, gold and iron ore up

WTI crude was flat at US$58.54, while gold rose +0.3% to US$1,561.24 and iron ore added +US$0.50 to US$97.20/MT.

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