Trader Talk: An Analysis of the Markets this Morning

Good morning,

Markets are called to open higher this morning. Asia’s benchmark stock gauge headed for the highest close since May and European index futures gained while Treasuries declined as Senate leaders made progress on a U.S. debt deal. Australia’s dollar jumped after central bank minutes signaled an interest-rate cut wasn’t imminent.

Democrat and Republican Senate leaders made reference to progress in talks on a deal to suspend the debt ceiling through Feb. 7 and fund the government through Jan. 15. The U.S. will not default, former Treasury Secretary Lawrence Summers said in Seoul today. The Reserve Bank of Australia is gauging the impact of “substantial” policy stimulus on the economy, according to minutes of its last meeting.

WHAT TO WATCH:

• Swiss Re Said to Consider Sale of U.S. Life Insurance Assets

• GSW Recommends Shareholders Accept Deutsche Wohnen’s Offer

• Ex-RBS Trader in U.K. FX Probe Said to Be JPMorgan’s Usher

• Asian Stocks Advance as Treasuries Fall on U.S. Debt Talks

• Alstom-Led Group Signs $5.1b South African Rail Order

• BMW Mulls Boosting Electric-Car Capacity on Demand for i3

• Stournaras Denies Asmussen Assertion of Major Greek Fiscal Gap

• Letta Mixes Tax Cut With Rigor in Post-Berlusconi Italian Budget

• Germany’s CDU and SPD Reach Agreement on Euro Policy, RP Says

• BOE’s Cunliffe Says U.K. Not in Grip of Housing-Market Bubble

• Balda Says CEO Mueser Stripped of Duties Amid U.S Investigation

EARNINGS All times CET, estimates where available:

• Rio Tinto (RIO LN) 6am, 3Q iron ore output est. 53.3m tons

• Kuehne + Nagel (KNIN VX) 6:45am, 3Q GAAP net CHF158.9m

• Nexans (NEX FP) 7:30am, 3Q sales EU1.25b

• Burberry (BRBY LN) 8am, 1H total rev. GBP1b

• Hennes & Mauritz (HMB SS) 8am, Sept. sales

• Hargreaves Lansdown (HL/ LN) 8am, 1Q IMS

• SKF (SKFB SS) noon, 3Q adj. EPS SEK2.97

• Bellway (BWY LN) 8am, FY GBP0.88

• Getinge (GETIB SS) 1pm, 3Q GAAP net SEK413.4m

• LVMH (MC FP) post-mkt, 3Q total rev. EU7.31b

Good day and happy trading!

Kristian Camenzuli