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FTSE 100 today: London markets prepare for quiet start amid thin U.S. holiday trading

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Moving Markets Today: Asia Shares Falter, China Sees Modest Gains; Oil Dips in Thin U.S. Holiday Trade; China Central Bank Holds Key Rate; Nvidia’s Earnings in Spotlight 

The week began on a subdued note, with limited activity due to the U.S. holiday and a sparse economic calendar. Asian markets started slowly amid fading hopes for early global rate cuts. Oil prices edged down in thin trade. China’s central bank kept its key policy rate unchanged, and Lunar New Year travel spending in the country exceeded pre-COVID levels. Attention is on Nvidia and UK banks’ earnings reports, along with the release of minutes from key central banks’ rate decisions, shaping the focus for the week ahead. Here are five key takeaways for your day. 

China’s Central Bank Holds Key Rate; Lunar New Year Travel Spending Exceeds Pre-COVID Levels 

China’s central bank kept a key policy rate steady on Sunday and extended maturing medium-term loans. The People’s Bank of China (PBOC) maintained the rate on 500 billion yuan ($69.51 billion) in one-year medium-term lending facility (MLF) loans at 2.50%, consistent with the previous operation. With 499-billion-yuan worth of MLF loans set to expire this month, the operation injected a net 1 billion yuan of fresh funds into the banking system. 

On the other hand, tourism revenues in China surged by 47.3% year-on-year during the Lunar New Year holidays, surpassing 2019 levels, attributed to a domestic travel boom during the extended holiday period, official data released on Sunday showed. 

UK Property Prices Up Annually for First Time Since August: Rightmove 

Home prices in Britain rose annually for the first time in six months, driven by increased demand from buyers, according to a recent industry survey by Rightmove, Reuters reported. Asking prices increased by 0.1% in February compared to the previous year, marking the first yearly rise since August 2023. Additionally, prices climbed by 0.9% from January, consistent with the 10-year average monthly rise of 1.0% in February. 

EU Plans 500 Million Euro Fine for Apple: FT 

The Financial Times reported that the European Union is gearing up to levy a fine of around 500 million euros (equivalent to $539 million) against Apple for alleged breaches of EU competition laws. This penalty, expected to be announced early next month, marks the culmination of an antitrust investigation by the European Commission. The probe aims to determine whether Apple has unfairly favoured its own services over competitors’ offerings on its platform. Specifically, investigators are looking into whether Apple hindered apps from informing iPhone users about cheaper alternatives to access music subscriptions outside of the App Store. The investigation was prompted by a formal complaint lodged by music-streaming app Spotify with regulators in 2019. 

What’s Coming Up 

As the earnings season unfolds, all eyes are on key players like Nvidia in the tech sector and major retailers such as Walmart in the U.S. market. Nvidia is gearing up to announce its quarterly earnings report on Wednesday, February 21st, with analysts predicting earnings per share of $4.56 and a significant rise in quarterly revenue to $20.378 billion, compared to $6.05 billion a year earlier. Walmart, on the other hand, is anticipated to reveal an uptick in fourth-quarter sales, reflecting the crucial holiday shopping period. 

In the UK, the focus shifts to banks following NatWest’s favourable financial figures released last Friday. The market will be watching closely to see if other banks can keep up with expectations in the days ahead. Moreover, a series of central bank speakers are scheduled to provide insights, along with the publication of monetary policy meeting minutes from the U.S. Federal Reserve, the European Central Bank, and the Reserve Bank of Australia, according to reports from the Financial Times and Reuters. 

Asia Markets Stumble as China Rejoins with Muted Gains 

Asian shares stumbled as hopes for global rate cuts faded, while Chinese markets showed minimal gains post-holiday. China’s CSI 300 index saw a slight increase of 0.2%, whereas Hong Kong’s Hang Seng index dropped by 1%. The China Enterprises index in Hong Kong also experienced a decline of 0.8%, while the Hang Seng Tech index fell by 1.4%. South Korea’s Kospi index showed growth of 1%, while Japan’s Topix index remained steady. However, Japan’s Nikkei 225 index decreased by 0.9% after reaching close to its all-time high last week. The Japanese yen strengthened by 0.1% against the dollar, reaching JPY 149.95. In the futures market, S&P 500 futures rose by 0.1%, and Nasdaq futures increased by 0.2%, driven by optimistic expectations regarding Nvidia’s performance.

The two-year Treasury yields to spike to a new high for 2024, hitting 4.72% before settling at 4.65%. This increase in rates impacted gold prices negatively, with gold remaining at $2,014 per ounce. Meanwhile, concerns over demand and the potential for supply disruptions in the Middle East led to softer oil prices in early trading. Brent crude slipped by 32 cents to $83.15 per barrel, while U.S. crude for April fell by 33 cents to $78.13 per barrel.

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