Bloomberg News
-Stocks fall: Equity markets across the globe are tumbling, with Japanese stocks plunging into a bear market, Chinese equities in Hong Kong falling to their worst level since 2007, emerging market stocks sinking to the lowest in six years, and European stocks reaching a 13-month low. U.S. futures are also in retreat.
-Bonds rise: U.S. Treasuries climbed, pushing the yield on the benchmark 10-year to the lowest since October as investors sought the safety of sovereign debt as the stock rout spread. German 10-year bund futures touched a record high as European sovereign debt also advanced. The big exception from the euro area bond rally is Italy, which has seen its debt fall as concerns mount over the health of the Italian banking system.
-Oil down: Brent dropped below $28 a barrel for the second time this week, helping to push the Russian ruble to a record low against the dollar. At 11:10 a.m. London time Brent futures were trading at $28.13 a barrel while West Texas Intermediate futures were at $27.64. U.S. inventory data is expected to show an increase of 2.75 million when it’s released tomorrow.
-Pegs under pressure: Two currency pegs have come under increasing pressure in recent days. Authorities in Saudi Arabia moved this morning to stem the tide of traders betting against the riyal’s peg to the U.S. dollar by banning local riyal forward options. Those forwards had jumped to their highest in at least two decades. In Hong Kong, local dollar forwards sunk to the weakest since 1999, forcing interbank lending rates to their highest in seven years. Hong Kong Monetary Authority Chief Executive Norman Chan reiterated on Monday his commitment to keeping the linked exchange-rate system.
-Canada rate decision: At 10:00 a.m. ET the Bank of Canada will release its interest rate decision, with economists and the market split on whether there will be a cut to 0.25 percent or not. Collapsing commodity have hit the Canadian currency hard in recent months with analysts expecting further falls in the loonie.
CNN Money
-International markets overview: European markets are sharply lower, with main indexes down around 3% lower at the open. Asian markets ended firmly in negative territory. The Nikkei closed down 3.7%, and entered a bear market. The Hang Seng ended down 3.8% and shares in Shanghai shed 1%.
-Stock market movers — Shell, Netflix, IBM: Shell (RDSA) shares are down more than 3% after the oil major gave a downbeat market update ahead of a shareholder’s vote on its proposed merger with BG (BRGYY). Netflix (NFLX, Tech30) shares surged more than 6% during extended trading after the company revealed it reached 75 million subscribers last quarter. IBM’s (IBM, Tech30) shares were down 5% premarket after the company issued a disappointing earnings report.
-Earnings: Companies including Goldman Sachs (GS) and TE Connectivity (TEL) will post their quarterly earnings updates before the opening bell. Kinder Morgan (KMI), Logitech (LOGI) and Raymond James Financial (RJD) will issue results after the market close.
-Tuesday market recap: The Dow Jones industrial average advanced by 0.2%, while the S&P 500 inched up 0.1% and the Nasdaq dipped 0.3%.
-China to world: Get ready for more market volatility; Market volatility will be part of the «new normal» as China continues to transition from an economy based on investment and exports to one driven by consumption, said Fang Xinghai, the vice chairman of the China Securities Regulatory Commission. «Get used to it,» he told CNN during an interview at the annual World Economic Forum in Davos, Switzerland. His comments follow wild swings on Chinese stock markets that have sent shock waves around the world. The Shanghai Composite index has fallen by 16% since the start of January, spooking investors and triggering sharp drops in other global markets. Shanghai is down more than 40% since a bubble burst last summer. Fang said Chinese markets are more volatile than other developed exchanges because they are dominated by individuals who lack the experience of large institutional investment houses.