10 things you need to know in markets today

Oil barrels are stacked at a storage facility in Seattle, Washington

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Oil barrels are stacked at a storage facility in Seattle, Washington
source
Thomson Reuters

Good morning! Here’s what you need to know in markets on Wednesday.

1. Oil’s rally is continuing, with benchmark Brent crude now trading at a two-year high above $69 a barrel. Prices climbed by as much as 2% overnight and have since consolidated in Asian trade. It marks a gain of around 11% since mid-December.

2. Chinese consumer price inflation (CPI) remains incredibly subdued. According to China’s National Bureau of Statistics (NBS), CPI grew by 1.8% in the year to December, up from 1.7% in November but below the 1.9% level expected by economists. Despite the modest acceleration, it still remains well below the annual rate of around 3% targeted by the People’s Bank of China (PBoC).

3. Asian shares hovered just below their 2007 record peak on Wednesday, supported by expectations of solid corporate earnings on the back of synchronized growth in the global economy. MSCI’s broadest index of Asia-Pacific shares outside Japan was little changed in early trade, sitting just 0.4 percent below the record high touched in November 2007.

4. Richard Turnill, the chief investment strategist at $6 trillion fund giant BlackRock says Trump’s trade policy is the biggest risk to markets.“This is a risk that could shake up global growth and earnings prospects – and call into question our economic outlook,” he wrote in a blog post.

5. Intel CEO Brian Krzanich’s massive stock sale last fall – which came as the company was privately trying to contend with a major security vulnerability in its chips – could spark a mess of legal trouble for the company.Institutional investors are already consulting with lawyers about filing a shareholder suit against the company related to the stock sale, according to a person familiar with the talks. Meanwhile, Intel could also contend with an inquiry by the Securities and Exchange Commission, legal experts said.

6. The stock market’s unrelenting march higher has changed how investors see this bull market, according to Credit Suisse.As the S&P 500 rose, investors positioned themselves to profit from new highs by demanding more call options, which are instruments that give them right to buy stocks at an agreed price.

7. French President Emmanuel Macron sought to downplay the lack of business mega-deals during his state visit to China, saying other countries had trumpeted big figures in the past that masked more modest realities.“My philosophy is not to flaunt the nominal amounts of contracts,” Macron told the French community in Beijing.

8. Upmarket UK burger chain Byron could close 20 restaurants, as Britain’s casual dining sector continues to suffer from a nationwide consumer spending squeeze.Accountancy firm KPMG said on Tuesday afternoon that Byron, which has 67 restaurants and employs 1,800 people, will launch a “company voluntary arrangement” (CVA) on Wednesday. A CVA is a restructuring effort that would help the firm slash its bills but requires the approval of all its creditors, including landlords.

9. Diplomats from North Korea and South Korea emerged from the first formal talks between the two technically-still-at-war nations on Tuesday and declared they would hold military talks.The talks, scheduled to discuss the Pyeongchang Winter Olympics, which South Korea will host in February, veered into political and military territory, as President Donald Trump and much of the outside world hoped they would.

10. Lenovo Group said on Wednesday it expected to make a one-off charge of $400 million for nine months ended in December due to a reassessment of U.S. deferred tax assets.The adjustment to be reflected in the financial results is of a non-cash nature, and the company does not expect it to have any material effect on its operation or cash-flow position, the PC maker said in a filing to the Hong Kong bourse.