05.02.16 Friday Evening

As the final session of the week comes to a close, investors can look back on a week of volatile trading which saw a combination of key earnings alongside crucial levels being tested in global markets.
 

This week has been focused on the incredibly weak US Dollar which is on track for its worst week in years as investors continue to heavily sell the currency. This is due to the belief the Federal Reserve are now set to be less aggressive with interest rate rises than originally expected or even keeping rates on hold all together this year due to recent market conditions. With the US Dollar selling off aggressively, this has had a knock on effect to commodity prices with Gold and Copper smashing three month highs. With the strength in the commodity market, this has led to incredibly volatile mining stocks pushing higher throughout the week such as Anglo American - up 20% during Thursday’s session. Antofagasta, Glencore, BHP Billiton and Rio Tinto all followed suit throughout the day.
 

On the M&A front, Sainsbury’s £1.3bn takeover of Home Retail Group has been agreed this week after lots of uncertainty with the supermarket giant agreeing to pay 55p in cash alongside 0.321 new Sainsbury’s shares – a deal which prices Home Retail at around 161p a share. Prior to the purchase, Home Retail Group agreed to sell DIY giant Homebase for £340m which obviously made deal more enticing for Sainsbury’s.

With earnings season well underway, we have seen the drastic effect that low oil prices have had on energy stocks. BG Group reported a 54% drop in Q4 profit whilst its purchaser, Royal Dutch Shell similarly reported a 56% slump in profits and 10,000 job cuts – a move which impressed investors to push the share price higher. 

With the continued Dollar sell off throughout the week, commodity prices rallied which in turn pushed shares sharply higher in Anglo American. Surging over 20% on Thursday, its largest intraday move since 2008, the stock is up almost 50% over the past five trading sessions. Similarly, shares in Antofagasta, Glencore, BHP Billiton and Rio Tinto are trading much stronger. 

Economic Diary, 8^th to 12^th February 2016

Monday 8^th February

All Day – CNY Bank Holiday

7.00am – EUR German Industrial Production m/m

9.30am – EUR Sentix Investor Confidence

3.00pm – USD Labor Market Conditions Index m/m

Tuesday 9^th February

All Day – CNY Bank Holiday

7.00am – EUR German Trade Balance

9.30am – GBP Trade Balance

3.00pm – USD JOLTS Job Openings

Wednesday 10^th February

All Day – CNY Bank Holiday

7.45am – EUR French Industrial Production m/m

9.00am – EUR Italian Industrial Production m/m

9.30am – GBP Manufacturing Production m/m

9.30am – GBP Industrial Production m/m

3.00pm – GBP NIESR GDP Estimate

3.00pm – USD Fed Chair Yellen Testifies

3.30pm – USD Crude Oil Inventories

Thursday 11^th February

All Day – CNY Bank Holiday

All Day – JPY Bank Holiday

All Day – EUR Eurogroup Meetings

1.30pm – USD Unemployment Claims

3.00pm – USD Fed Chair Yellen Testifies

Friday 12^th February

All Day – CNY Bank Holiday

All Day – EUR ECOFIN Meetings

7.00am – EUR German Prelim GDP q/q

7.00am – EUR German Final CPI m/m

7.45am – EUR French Prelim Non-Farm Payrolls q/q

9.00am – EUR Italian Prelim GDP q/q

9.30am – GBP Construction Output m/m

10.00am – EUR Flash GDP q/q

1.30pm – USD Core Retail Sales m/m

1.30pm – USD Retail Sales m/m

1.30pm – USD Import Prices m/m

3.00pm – USD Prelim UoM Consumer Sentiment

3.00pm – USD FOMC Member Dudley Speaks

Earnings releases, 8^th to 12^th February 2016

Monday 8^th February

Randgold Resources Ltd – Q4 2015 Earnings Release

Hasbro Inc – Q4 2015 Earnings Release

Tuesday 9^th February

Redrow PLC – Interim 2016 Earnings Release

GW Pharmaceuticals PLC – Q1 2016 Earnings Release

Dunelm Group PLC – Half Year 2016 Earnings Release

Wednesday 10^th February

Electrocomponents PLC – Trading Statement

Daily mail and General Trust PLC – Q1 2016 Trading Statement

Bellway PLC – Trading Statement

Twitter Inc – Q4 2015 Earnings Release

Thursday 11^th February

Rio Tinto PLC – Full Year 2015 Earnings Release

Shire PLC – Full Year 2015 Earnings Release

Friday 12^th February

Rolls-Royce Holdings PLC – Full Year 2015 Earnings Release