OVERNIGHT MARKETS ROUND UP – 21/01/14

Asian bourses received a boost last night after the People’s Bank of China provided a short term liquidity injection to commercial banks.  This comes as a welcome release for banks ahead of Chinese New Year on Friday the 31^st of January when huge amounts of money are withdrawn from banks to fund travel and gifts.  It is also seen as a way to keep money market rates under control as seven day repo rates jumped up to 6.59% from only 4% a few weeks ago. 

Banks will be looking for a rebound today following yesterday’s news about the losses at Deutsche Bank caused banks to take 8 points from the FTSE 100 yesterday amid fears that euro litigation is one of the major increases in costs. 

Hopes of a long term resolution between the west and Iran last night hit a stumbling block after the UN extended an invitation for Iran to attend Syrian peace talks which was swiftly retracted last night after the Syrian National Coalition threatened to boycott the event should Iran attend without pre-agreeing to a transitional government.   Iran, a major backer of Bashar al-Assad, refused to commit to any pre-conditions causing embarrassment for the UN and potentially upsetting any chance of a long term agreement on Iran’s nuclear programme, whose sanctions were lifted for 6-months last week.