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September 2013

Prospects Daily: Global equities and the dollar slump on concerns about the looming US government shutdown, Japanese manufacturing sector business sentiment at 30-month high, Romania’s central bank cuts its benchmark interest rate

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Financial Markets… Global equities and the dollar slumped on Monday as concerns about a looming U.S. government shutdown (its first one in 17 years) rattled investor sentiment. The benchmark MSCI world equity index fell 1% as the MSCI Asia Pacific Index tumbled 1.5%, the Stoxx Europe 600 Index dropped 1%, and the S&P 500 index slumped 0.8% in morning trading session. The dollar was down 0.6% against basket of six major currencies (measured by DXY index), especially against the Japanese yen and the Swiss Franc. In contrast, U.S.

Prospects Daily: Concerns over US budget woes weigh on global equities, Eurozone economic confidence rises to 25-month high, Ghana’s GDP growth rebounds in the second quarter

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Financial Markets… Growing concerns over U.S. budget woes weighed on global equities on Friday, while Italy’s political turmoil and China’s growth concerns hit European and developing-country shares. The benchmark MSCI world equity index fell 0.2 percent in morning trade, but expected weakness in U.S. equities is likely to send the index further lower in afternoon session. The Stoxx Europe 600 Index dropped 0.3 percent and the MSCI Emerging Market Index lost 0.4%, trimming their monthly gains.

Prospects Daily: ​European financial markets slump, U.K. economy expands at its fastest pace in three years, Mexico’s merchandise trade deficit narrows

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Financial Markets… The Japanese yen weakened for the first time in five days as speculations Japan’s government is still considering cutting corporate taxes and putting more funds into stocks damped the currency’s relative safe-haven attraction and sparked gains for Tokyo shares. The drop in the Japanese unit has been correlated with increasing risk appetite. The yen depreciated 0.5% against the dollar to 98.95, while Japan’s currency eased 0.3% against the euro to 133.59.
 

Prospects Daily: ​Dollar eases, U.S. to reach debt ceiling by Oct. 17, Brazil’s producer price inflation accelerates

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Financial Markets…The dollar eased 0.2% against a basket of six major currencies to 80.563 (the DXY index) as concerns over a potential U.S. government shutdown and mixed signals on the Federal Reserve’s monetary policy weighted on investor’s sentiment. The euro advanced 0.25% versus the dollar to $1.3509, supported by signs of economic strength in the Euro-zone area. The greenback fell 0.2% versus the Japanese currency to 98.5 yen, while it rose against the Australian dollar and the New Zealand dollar.

Prospects Daily: ​Global stocks inches lower, The Netherlands remains in recession, Brazil’s current account deficit widens

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Financial Markets… Global stock markets inched lower on Tuesday as lingering uncertainty over U.S. fiscal and monetary policies weighed on market sentiment. The benchmark MSCI world equity index is down 0.1% with early losses in Asian markets and a small gain in Europe.  Developing-country shares also declined with weakening Russian and Chinese shares, trimming their Fed’s inspired gains, and U.S. equities opened slightly lower in morning trading session after the S&P 500 and the Dow indexes rose to new record highs last week.

Prospects Daily: Developing-country stocks gain, Eurozone business sentiment rises for consecutive sixth month, China’s manufacturing growth on track to strengthen

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Financial Markets…Irish government securities advanced, with the benchmark 10-year bond yield sliding to as low as 3.84%, after Moody’s Investors Service raised its credit outlook on the country’s debt. Additionally, risk premium that investors demand for buying Irish 10-year bonds instead of similar-maturity German bunds fell to 187 bps, the lowest since May 2010.

Prospects Daily: ​Asian currencies gain, Spain's trade deficit plunges, India raises key benchmark rate

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Financial Markets… Developing-country stocks fell slightly from yesterday’s 4-month high, as bank shares in India and Turkey dropped the most in more than two weeks. The MSCI Emerging Market Index slid 0.4%, pairing this week’s advance to 3.2%, after the benchmark stock indexes for Indian and Turkish banks slumped 4.2% and 4.2%, respectively, trimming their double-digits weekly gains. The slight bump in developing-country shares also indicated that there were some profit takings on the initial rally in the wake the Federal Reserve’s surprising move.

Prospects Daily: Global equities surges, Ireland exits recession, South Africa’s wholesale trade growth accelerates

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Financial Markets…Global equities surged on Thursday, extending yesterday’s rally, as the Federal Reserve’s surprise decision to maintain its stimulus program continued to boost market sentiment. The Stoxx Europe 600 Index rose 0.7% to the highest levels in more than five years, while the benchmark Asian stock index climbed 2.2%, the biggest daily gain in a year. The MSCI Emerging Market Index jumped 2.6% with benchmark indexes in Turkey and Russia surging more than 20% from this year’s lows. U.S.

Prospects Daily: Portugal’s funding costs jumps to 10-month high, U.S. housing starts disappoint, Malaysia’s inflation comes in below target

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Financial Markets… European and Japanese stocks advanced on Wednesday ahead of the Federal Reserve’s decision on stimulus program. The Stoxx Europe 600 Index gained 0.3%, trading near its five-year high level reached on Monday, while Japan’s Nikkei index closed up 1.4% to an eight-week high on expectations the Fed’s tapering will be modest.

Prospects Daily: Emerging Economies’ stocks decline, German Investor Morale At 3 1/2-year High, China’s FDI growth eases

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Emerging Economies’ stocks decline…German Investor Morale At 3 1/2-year High…China’s FDI growth eases
 
Financial Markets… U.S. Treasuries gained for a fifth day on Tuesday, with the benchmark 10-year note yields sliding to 2.84%, as investors await on a Federal Reserve announcement tomorrow on the future of U.S. stimulus program. U.S. government bonds have declined 3.6% this year through yesterday, while they gained 2% last year.

Prospects Daily: Stocks Surge on Summers’ Withdrawal…U.S. Industrial Production Climbs…India’s Inflation Accelerates

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Financial MarketsEuropean stocks extended their gains on Monday, after reaching a 5-year high last week, as Lawrence Summers’ withdrawal from the Federal Chairman race eased the risk of an early end of U.S. monetary stimulus. The benchmark Stoxx Europe 600 Index rose 0.7% to the highest level since June 2008 as the German DAX index rallied 1.3% to a record high level.

Prospects Daily: Gold prices fall, US consumer spending and sentiment ease, Hungary industrial output accelerates

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Financial Markets…Oil and gold helped lead commodities lower as the U.S. and Russia started talks on a plan for Syria to surrender chemical weapons and investors weighed prospects for the Federal Reserve to cut stimulus. West Texas Intermediate oil slid 0.9% to $107.64 a barrel in mid-morning trading in New York. Gold for December delivery lost 0.9% to $1,318.10 an ounce. The S&P500 and the Stoxx Europe 600 Index drifted between gains and losses.

Prospects Daily: Equities stall and yields drop as risk aversion dominates, Australia’s unemployment rate hits a four-year high, India’s IP accelerates

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Financial Markets…Global stocks stalled at five-year highs as Asia’s long rally ran out of steam and risk aversion extended the yen’s rebound below ¥100 against the US dollar. European and US markets struggled for gains as eurozone industrial production figures disappointed expectations while the FTSE Asia-Pacific index broke its longest winning streak for nine months.

The decline of risk appetite was evident in the government bond markets as German yields sank 6 basis points to 1.98% while 10-year US Treasuries yields slipped 4bp to 2.88%.

Prospects Daily: Indonesia bond yields rise, France raises budget deficit targets, Malaysian and South African IP growth accelerates

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Financial Markets…The Japanese yen hovered near recent lows at about Y100/$ on Wednesday as easing tensions over Syria dented demand for the safe-haven currency, while uncertainty about the Federal Reserve's stimulus plan kept the dollar range-bound. The yen hit a seven-week low against the dollar and a 3-1/2-month trough versus the euro, before recovering losses. It also fell to a four-year low against the British pound, which had rallied after Friday's U.S. jobs data.

Prospects Daily: Equities rally on China, Syria, OECD unemployment falls to 7.9%, China’s industrial production and retail sales pick up

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Financial Markets…US, European stocks jumped, joining Asian equities and the Australian dollar as the major beneficiaries of a rally powered by Chinese industrial production and retail sales figures that beat expectations. Risk appetite was also strengthened by signs that the US will wait before launching a military strike against Syria, with the US government suggesting that it might hold back if Syria cedes its stock of chemical weapons.

Prospects Daily: Asian stocks rally on signs of resilience in China,Turkey industrial output rises

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Financial Markets… US equities rose for a fifth day running while stocks in Asia extended their winning streak for the eight day running on Monday, on signs of resilience in the Chinese economy, and a strong upward revision to Q2 GDP growth in Japan. The Nikkei 225 Average closed up 2.2% and the Shanghai Composite climbed to three-month highs after rising 3.4 per cent%, while the S&P added 0.5% on Monday morning to last week’s 1.4% increase.
 

Prospects Daily: Equities are up and yields are down as US jobs report disappoints, Mexico lowers interest rates

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Financial Markets…Equities are firmer and benchmark borrowing costs are pulling back sharply from two-year highs after a disappointing US jobs report reduces expectations for a shift in Federal Reserve policy. Wall Street’s S&P 500 is up 6 points to 1,660, while the dollar index is down 0.4%, helping to push gold up $15 to $1,382 an ounce. Europe’s Stoxx 600 equity index is up 0.5%, helping the FTSE All-World gain 0.5%.

Prospects Daily: Equities firmer, but worries about Syria persist, U.S. jobless claims near five-year low, IMF approves a loan to Pakistan

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Financial Markets…Optimism about the global economy is helping to nudge many growth-focused assets higher, but the bullishness is contained by worrying over the potential geopolitical fallout of the crisis in Syria and monetary policy uncertainty as bond yields move to fresh highs. Europe’s Stoxx 600 index is up 0.3% after the FTSE Asia Pacific index rose 0.2%. The S&P 500 advanced just 2 points to 1,655 at the open.

Prospects Daily: Middle Eastern equities slump, US trade deficit widens, Chinese service sector PMIs improve

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Financial Markets…US stocks rose for a second day as technology and automobile companies led gains and investors awaited the Federal Reserve’s economic outlook survey. S&P 500 increased 0.6% to 1,648.91 in morning trading in New York.

The MSCI Emerging Markets Index added 0.3% as India’s S&P BSE Sensex index climbed 1.8%, rebounding from yesterday’s biggest decline in more than two weeks. Benchmark gauges in Indonesia and the Philippines lost at least 1.9%.