Markets higher as oil price rebounds

Good morning,

Markets are trading higher this morning due to a rebound in the price of oil. Saudi Oil Minister Ali Al-Naimi said at a conference in Abu Dhabi at the weekend that the market will recover and fossil fuel will remain the main source of energy for decades to come. Mohammed Al Sada, Qatar’s energy minister, called on producers outside of OPEC to cut their “irresponsible” output on the sidelines of the conference. The Organization of Petroleum Exporting Countries last month refrained from reducing its production target of 30 million barrels a day.

In the US, the Federal Reserve said last week that it would be patient over interest-rate increases, while signalling borrowing costs could be raised as early as April, spurring a surge in global stocks and declines in U.S. Treasuries.

In Europe, Mario Draghi has one month to win consensus on quantitative easing by showing he won’t endanger the European Central Bank. As officials prepare to consider sovereign-bond purchases on Jan. 22, the ECB president is working to get as many policy makers and as much of the public on his side as possible. One concession being debated is to require national central banks to be responsible for at least some of their own credit risk. “Not to pursue our mandate would be illegal,” Draghi said on Dec. 4 after strengthening the Governing Council’s official statement to say stimulus is intended to expand the ECB’s balance sheet by as much as €1 trillion.

In Russia, policy makers are signaling they’re prepared to sacrifice economic growth in order to stabilize the ruble. The Bank of Russia raised its benchmark interest rate by the most in 16 years last week and created a money-market cash squeeze, helping the ruble strengthen 37% from a record low on Dec. 16. The consequence of this means the oil producer’s economy may shrink 7.9% in 2015, Danske Bank A/S said on Dec. 19, revising a view for a 1.8% contraction.

In Japan, Prime Minister Shinzo Abe’s victory in elections this month, an endorsement of his economic policies, may help the nation’s biggest companies get richer while extending a surge in bankruptcies among smaller ones. Toyota Motor Corp. and Honda Motor Co. are expected to post record profit this year after the policies known as “Abenomics” weakened the yen, boosting their earnings from overseas.

In corporate news, Actavis is considering Spanish drugmaker Almirall SA as one of s`everal possible takeover targets. Actavis has identified Almirall, which could be valued at about €3 billion in a deal, as one of its preferred targets to boost growth in Europe. The company is looking at several possible bolt-on acquisitions, the people said, and no final decision has been made.

The hacking of Sony Pictures Entertainment’s computer system was “an act of cyber vandalism” that requires the U.S. to “respond proportionately,” President Barack Obama said. The U.S. has linked the action against the Sony Corp. unit to North Korea, whose government denies any involvement. North Korea is planning unspecified action on U.S. soil over the allegation, South Korean news agency Yonhap reported.

Microsoft has had a busy calendar year to say the least. From an Indian taking over the reins as CEO in Satya Nadella to the acquisition of Nokia devices business, the IT major has been in the headlines throughout the year. Revealing the company's plans for the future, Microsoft India chairman Bhaskar Pramanik hinted that the firm is looking to edge over the competition especially in India using its cloud and inter-devices access.

Regards

Kristian Camenzuli