Good Morning. Here's what you need to know.
  • Asian markets were up in overnight trading with the Shanghai Composite surging 4.18%. Europe is higher, after the S&P downgraded European countries on Friday, and the EFSF yesterday. U.S. futures have opened higher.
  • China's Q4 GDP climbed 8.9% from a year ago, beating estimates, but growing at its slowest pace in 2.5 years. The strain in China's property market and the impact of Europe's debt crisis on Chinese exports has increased pressure on Chinese premier Wen Jiabao. Investors now speculate that policy makers will ease monetary policy. 
  • S&P downgraded the European Financial Stability Facility from AAA to AA+ on Monday. This follows the downgrade of France and Austria, two previously AAA rated guarantors of the EFSF. The head of the EFSF, Klaus Regling, has however said that the downgrade would have little impact on the fund's operations and investor demand for its bonds.
  • Spain's Treasury sold €4.88 billion of 12-month and 18-month bills just below its maximum target of €5 billion. The average yield on the 12-month bill was 2.049%, and 2.399% for the 18-month bill, coming in lower than expected. Borrowing costs eased despite its two-notch downgrade by S&P. Spain will auction its long-term debt on Thursday. 
  • UK inflation grew 4.2% year-over-year in December, compared with 4.8% the previous month. Inflation slowed to its weakest pace in six months. Core inflation which excludes food and energy eased to 3%, while retail-price inflation slowed to 4.8%.. 
  • The Empire State manufacturing survey for January showed business conditions soaring to 13.48 >
  • Earnings season begins in earnest this week with some heavyweights in the financial sector. Citigroup posted Q4 earnings of $0.38 per share, on revneue of $17.17 billion missing expectations. Meanwhile, Wells Fargo posted Q4 earnings of $0.73 per share, on revenue of $20.61 billion. 
  • Asian insurer AIA Group, which is one-third owned by AIG, is considering acquiring ING Groep's Asian insurance operations for $6 billion. ING has reportedly hired Goldman Sachs and JP Morgan to advise on the sale.
  • Costa Concordia, the cruise ship owned by Carnival Corp, ran aground off the coast of Italy killing at least 6, with another 29 missing. Insurance losses from the ship are estimated to be between $600 million - $800 million. The ship was insured by several companies including XL Group, Assicurazioni Generali, and RSA Insurance Group, and, Carnival Corp used Aon as its insurance broker.
  • The German ZEW measure of economic sentiment unexpectedly rose to -21.6 in January, from -53.8 in December. Sentiment rose over policy response to the European debt crisis, and German analyst and investor sentiment showed its biggest jump on record.