Here are the latest developments in global markets:
FOREX: The yen posted a strong rally towards an intra-day high of 110.38 (+0.38%) per dollar during early European trading hours. This came after a decline earlier in the day when the BOJ chief, Haruhiko Kuroda, downplayed plans on stimulus reduction. Upbeat data on Eurozone’s ZEW economic sentiment offered little for the euro, with euro/dollar recovering to 1.2256 (-0.13%). Pound/dollar dipped into losses, falling to 1.3944 (-0.30%) after touching 1.4000 during the Asian session. The bigger loser, though, was aussie/dollar which dropped to 0.7961 (-0.65%) as protectionist trade measures in the US threatened global trade activities and signaled an equivalent response by China. The dollar index was steady at 90.42.
STOCKS: European stocks jumped to new highs on Friday as the US government was in the process to reopen, while optimism on earnings releases gave fresh legs to the markets. The pan-European STOXX 600 hit a fresh 2 ½ -year high, trading 0.30% higher at 1045 GMT. The index was driven by Carrefour’s shares which increased by 6.5% after the company announced its plans to cut costs and launch a new partnership with its Chinese groups. The blue-chip Euro STOXX 50 climbed by 0.30% as well. The French CAC 40 inched up by 0.14% to 11-year peaks, while the German DAX and the British FTSE 100 surged to record peaks, rising 0.83% and 0.14% respectively.
COMMODITIES: Oil prices gathered tailwinds after the IMF revised its growth prospects to the upside for the Saudi Arabian economy in the face of rising oil prices. It also raised its growth forecasts for the world economy. WTI crude went up by 0.47% on the day to $63.47 per barrel and Brent increased by 0.35% to $69.27. Gold rose by 0.26% to $1,337.50 per ounce.
Day ahead: Eurozone flash consumer confidence pending; Eyes in Davos
In the Eurozone, preliminary readings on consumer confidence – due at 1500 GMT – are said to remain in positive territory in January for the third consecutive month, edging up by 0.1 points to +0.6. Note that, the index, which tracks future economic prospects, has been below 0 since 2001.
In oil markets, investors will be looking forward to the API weekly report delivered at 2135 GMT to see whether US crude oil inventories continue to fall, giving a further boost to oil prices.
However, the ongoing World Economic Forum annual meeting in Davos, Switzerland, will be of greater importance for market watchers over the next four days as world leaders and business delegates are gathering to discuss on global topics. Investors are potentially widely expecting a speech by the US President, Donald Trump, who recently achieved his first legislative victory in office, promising massive tax cuts for businesses and individuals, thereby creating a more attractive US business environment. Still, Trump’s attendance has not been confirmed yet, with the House Press Secretary, Sarah Saunders saying on Monday that the president will travel to Davos only if the" government reopens as expected".
In Montreal, representatives of Canada, the US, and Mexico, are scheduled to begin the sixth round of NAFTA negotiations, which will conclude next Monday. The outcome of these negotiations could play a large role in determining the near-term bias of both the Canadian dollar and the Mexican peso. Let’s not forget that the Bank of Canada described the future of NAFTA as the most significant downside risk the economy faced, after hiking its benchmark interest rate last week.
In other economic events, the US Senate Banking Committee will hold a hearing on the nomination of Marvin Goodfriend to be part of the FOMC board at 1500 GMT. Later in the day, the Chicago Fed President will give introductory remarks before the Chicago Council on Global Affairs conference: "The Future of Monetary Policy: Embracing the Unconventional" at 2330 GMT.
Formal coalition talks in Germany are expected to start this week after Merkel’s Conservatives (CDU) and Social Democrats (SPD) approved a deal to form a new government on Sunday.
In stock markets, earnings releases today include quarterly reports from Johnson & Johnson, Procter & Gamble, and Verizon before the US market opens.
 per dollar during early European trading hours. This came after a decline earlier in the day when the BOJ chief, Haruhiko Kuroda, downplayed plans on stimulus reduction. Upbeat data on Eurozone's ZEW economic sentiment offered little for the euro, with euro/dollar recovering to 1.2256 (-0.13%). Pound/dollar dipped into losses, falling to 1.3944 (-0.30%) after touching 1.4000 during the Asian session. The bigger loser, though, was aussie/dollar which dropped to 0.7961 (-0.65%) as protectionist trade measures in the US threatened global trade activities and signaled an equivalent response by China. The dollar index was steady at 90.42. ){kind=link}