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Market Review

The Bank of Japan is expected to wait until next year before easing policy further unless any sharp spikes in the yen undermine the economy significantly in the meantime, a Reuters poll found. In a report, Ministry of Finance said that Japan’s current account balance rose more-than-expected last month, to a seasonally adjusted 1.98T, from 1.45T in the preceding month. S&P Global said that rising debt levels will worsen the credit profiles of China's top 200 companies this year, forcing the country's banks to seek as much as $1.7 trillion in capital to cover a likely surge in bad loans.

In a report, ZEW said that euro zone’s ZEW economic sentiment index rose more-than-expected last month to a seasonally adjusted 12.3, from 5.4 in the preceding month. The British Retail Consortium said that retail sales in the U.K. rose more-than-expected last month to a seasonally adjusted 0.4%, from -0.9% in the preceding month.

Chicago Federal Reserve Bank President Charles Evans said the U.S. Federal Reserve should engineer monetary policy to spur inflation to rise above its two-percent target because the costs of doing so are less than in past decades. Minneapolis Federal Reserve President Neel Kashkari said that the Fed should continue to focus on further progress in the U.S. labor market until inflation signals strengthen.

Currencies: The dollar remained at highs against the other major currencies, as hopes for a U.S. rate hike before the end of the year continued to support the it. Sterling continued its downward trail, with investors concerned about the impact of a "hard exit" by Britain from the European Union. The EURUSD traded lower between $1.1204 and $1.1149. The GBPUSD traded broadly lower between $1.2376 and $1.2090. The USDJPY traded lower between ¥104.07 and ¥103.18.

Crude Oil: Oil retreated from one-year highs, mainly due to concerns that a production cut by the world's largest exporters might not be enough to deplete a two-year old global surplus of crude oil. On the ICE future Exchange, North Sea Brent crude traded lower between $51.50 and $50.39 On the New York Mercantile Exchange, U.S. light crude oil traded lower between $53.27 and $52.12.

Gold: Gold prices struggled to move away from four-month lows after indications the Federal Reserve is considering to hike interest rates in the coming months. On the COMEX division of the New York Mercantile Exchange, gold traded lower in a range between $1262.05 and $1252.54 an ounce.

Indices:  Asian shares gained due to news out of China of better than expected third quarter performance aided regional sentiment. At the close in Tokyo, the Nikkei 225 advanced 0.98%. At the close in China, Shanghai added 0.55%.

European stocks were down as investors tried to digest the release of positive economic sentiment data from Germany. At the close in Frankfurt the DAX declined 0.44%. At the close in Paris, the CAC40 lost 0.57%. At the close in Madrid, the IBEX 35 edged down 0.10%. Finally, at the close in London the FTSE100 dropped 0.38%.

U.S. stocks fell across many sectors after Alcoa kicked off the earnings season on a disappointing note. At the close, the Dow Jones industrial average lost 1.09%. The S&P 500 dropped 1.12% and the NASDAQ composite tumbled 1.54%.

Economic Calendar
Wednesday 12th October 2016:

Time

Currency

Event

Forecast

Previous

 9:00

GBP

MPC Member Cunliffe Speaks

 

 

12:00

USD

FOMC Member Dudley Speaks

 

 

13:40

USD

FOMC Member George Speaks

 

 

14:00

USD

JOLTS Job Openings

5.79M

5.87M

18:00

USD

FOMC Meeting Minutes

 

 

Posted: 10/12/2016 7:12:01 AM by Global Administrator | with 0 comments


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