Moving markets today: What’s shaping the FTSE 100 this morning 

Moving Markets Today: Asia Stocks Trade in Tight Ranges, U.S. Congress Leaders Finalize $1.66 Trillion Budget; Alaska Airlines Cancels 170 Flights, Corporate Earnings Season Begins 

Investors in Asian stock markets were cautious as they await inflation data from both the U.S. and China, as well as company earnings. U.S. Congress leaders have agreed on a substantial $1.66 trillion spending deal. Alaska Airlines is grounding 170 flights following a directive from the U.S. Federal Aviation Administration. Investors will closely observe U.S. inflation figures releasing this week. Major banks such as JPMorgan Chase and Citigroup are set to kick off the earnings season this week. Here are five key takeaways for your day. 

Congress Strikes $1.66 Trillion Agreement on U.S. Spending 

Over the weekend, the prominent leaders from both the Democratic and Republican parties in the U.S. Congress reached an accord on a $1.59 trillion spending deal. This sets the stage for a race among deeply divided lawmakers to pass the bills allocating these funds before a potential government shutdown later this month. The initial set of bills must clear Congress by January 19, followed by the remaining bills facing a February 2 deadline. 

Lorie Logan, President of the Federal Reserve Bank of Dallas, issued a warning on Saturday. She suggested that the U.S. central bank may find it necessary to resume increasing its short-term policy rate. This precaution aims to prevent a resurgence of inflation triggered by the recent decline in long-term bond yields. 

UK Labour Market Bounces Back: REC Survey 

UK employers increased wages and displayed a tentative recovery in hiring in December, suggesting lingering inflationary pressures in the labour market. The Recruitment and Employment Confederation (REC) survey, released on Monday, noted a continued decline in permanent staff hiring, albeit less severe than in November. Temporary hiring also contracted, but the decrease was less significant compared to the previous month. 

On Monday, Prime Minister Rishi Sunak will highlight Britain’s positive direction as it heads into an anticipated election year, with tax cuts at the forefront of Conservative party revival efforts. Inspired by John Major’s 1992 victory, Sunak emphasizes a message of economic improvement, warning voters against taking risks by shifting to the Labour party, according to the FT. 

Alaska Airlines Grounds 170 Flights in Compliance with FAA Directive 

Alaska Airlines has called off 170 flights scheduled for Sunday, affecting around 25,000 passengers. This action follows the directive from the U.S. Federal Aviation Administration (FAA) to ground 171 Boeing 737 MAX 9 aircraft for inspections. The airline foresees additional significant cancellations during the first half of the upcoming week, as mentioned on Sunday. 

Boeing has organized a company-wide safety meeting to discuss how it plans to address the recent mid-air blowout incident involving a 737 Max. 

What’s Coming Up: Taiwan Elections, Corporate Earnings Kick-off, and U.S. Inflation in the Spotlight 

This week unfolds with Taiwan’s pivotal presidential and parliamentary elections taking the spotlight, accompanied by the commencement of the earnings season featuring major U.S. financial players such as BlackRock, Citigroup, and JPMorgan Chase. In the UK, market watchers will gain valuable insights from trading updates by renowned brands like Marks and Spencer, J Sainsbury, Tesco, B&M, and Greggs, shedding light on consumer confidence following encouraging grocery sales reports by Kantar last week. 

On the economic front, key data releases include EU retail sales and December consumer confidence figures on January 8. On January 9, attention turns to the EU unemployment rate, the UK’s BRC-KPMG Retail Sales Monitor, and Barclays Consumer Spending Data. Australia’s November consumer price index (CPI) inflation rate data is set for January 10. January 11 brings a focus on the European Central Bank Economic Bulletin and U.S. CPI inflation rate data, coupled with unemployment claims. Lastly, on January 12, anticipate insights from China’s December trade balance figures, the UK’s November GDP estimate, and the U.S. producer price index (PPI) inflation rate for December. 

Asian Markets Tread Cautiously Ahead of U.S. Inflation and Earnings Reports; Dollar Firm 

Market activity began cautiously, with MSCI’s Asia-Pacific index flat after a 2.5% decline last week. Japan’s Nikkei 225 was closed, but its futures traded higher. Chinese CSI300 blue chips lost 0.5%, and EUROSTOXX 50 and FTSE futures showed limited movement. S&P 500 and Nasdaq futures increased by 0.1%. Major banks, including JPMorgan and Citigroup, kick off the reporting season with optimism for strong profits. In currency markets, the dollar dipped to 144.39 yen after a 2.5% rise last week. The euro strengthened to $1.0948. The dollar’s rise impacted gold, holding at $2,043 per ounce. Oil prices initially rose but reversed due to Saudi price cuts, with Brent at $78.42 and U.S. crude at $73.50 per barrel.