IMF downgrades growth, providing key concern at Davos

Growth concerns have hit market sentiment, with European indices falling back today. An IMF growth downgrade has highlighted the feeling that Trump's trade deal with China will do little to remedy the global slowdown.

• IMF growth revision dampens sentiment
• Housebuilders outperform after yet another bullish HPI release
• Davos in focus as leaders consider growth outlook

European markets have lost ground over the course of the day, with gains seen in Asia failing to take hold closer to home. The IMF decision to write down growth forecasts flies in the face of the notion that Trumps deal with China will help remedy the recent global slowdown. Today has seen a significant decline in market volumes amid a quiet economic calendar and MLK bank holiday. However, with a week full of central bank decisions and earnings releases, volatility looks certain to pick up as we move forward.

The housebuilders continue to outperform in the wake of yet another positive data point. Following on from bullish assessments from the Halifax HPI and RICS reports, todays Rightmove HPI figure represented the highest December reading since record began in 2002. Despite questions over the wider recovery, the housing market clearly had pent up demand that has been released on the resolution of the election and Brexit deadlock. With the pound expected to rise over the coming years, we will be keeping a close eye out for the premium central London demand as a gauge of foreign investment.

The focus now shifts to Davos, with the global movers and shakers meeting to discuss how policy should shape the future economic picture. Chief amongst the concerns for traders will be the appearance from Donald Trump, who is expected to strike a significantly more positive tone compared with his 2018 address. With the US retaining sizeable tariffs on Chinese goods, there is plenty of anxiety over whether this deal will indeed help global trade flow outside of the US. Thus, traders will be looking for discussions on growth and exactly how leaders envisage policy shaping a more optimistic outlook going forward.