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Borrowing drops for China
Overnight the Peoples Bank of China made a cash injection into the interbank market in order to increase liquidity, driving the borrowing costs for Chinese banks to its biggest weekly drop since 2011. China is a major importer of minerals, and traders bought natural resource stocks as they felt a more robust interbank market would ensure domestic companies would be able to continue their high levels of business activity.
Strong supermarket sales anticipated
British retailers are in the black today after the Boxing Day bonanza. As the UK's vital signs improve, dealers are already speculating that supermarkets sales will be strong; Tesco and Morrisons are up 1.1% and 1.5% respectively.
US optimistic after unemployment drop
We are expecting the Dow Jones to open six points higher at 16,485. US index futures are extending their gains due to yesterday’s drop in the number of people claiming unemployment benefit by 42,000. This exceeded analyst expectations and is further proof that the US economy is growing.
Negative outlook for safe havens
Gold is broadly unchanged on the day as the metal faces its first annual loss in more than a decade. If it dips below the important $1200 mark we could see some bargain hunting.
Light liquidity has resulted in losses for the US dollar. Despite tapering from the Federal Reserve, dealers are still not convinced of its safe-haven status.