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October 2013

Prospects Daily: Developing-country shares decline amid renewed concerns about tapering of US Federal Reserve’s stimulus program…Eurozone unemployment rate hits record high…Trade deficit widens in Turkey and South Africa

Financial Markets… European bonds and stocks advanced as data showed Euro-zone inflation unexpectedly fell to a near 4-year low in October, fueling speculation the European Central Bank (ECB) will trim interest rate to bolster growth. Expectations of ECB easing and better-than-expected earnings reports outweighed concerns over less dovish sentiment on the state of the economy from the U.S. Federal Reserve.

Prospects Daily: The US dollar extends depreciation against the euro, Eurozone Retail PMI at five-month low, Brazil’s producer price inflation eases

Financial Markets… The dollar fell 0.2% versus the euro to $1.3788 on Wednesday, extending its monthly depreciation to 1.7% amid growing expectations of extended Fed’s stimulus program. Meanwhile, the greenback held steady against the yen at 98.21 and has appreciated 13% year-to-date. The recent survey indicated the Federal Reserve would maintain its $85 billion bond purchasing program until March next year.

Prospects Daily: US equities extend gains ahead of Federal Reserve policy meeting, Spanish budget deficit narrows, India’s central bank raises key lending rate to fight inflation

Financial Markets… U.S. equities extended their gains ahead of a U.S. Federal Reserve’s policy meeting today, with the S&P 500 index reaching a fresh record high, as weaker retail sales and consumer confidence data added to speculations the Federal Reserve will maintain its bond purchasing program for the time being. Although some investors remain cautious about potential surprises from the Fed’s two-day policy meeting, most see the Fed’s tapering move could be delayed well into next year.

Prospects Daily: Developing-country stocks fall on China, Czech Republic economic sentiment improves for third month, China’s flash Manufacturing Purchasing Managers’ Index rises to a seven-month high

Financial Markets… Italian government bonds retreated on Thursday as the government report showed the nation’s consumer confidence index fell to the lowest level since June, damping investors’ risk appetite on high-yielding bonds. The benchmark Italy’s 10-year yield widened 4 basis points to 4.16% after dropping to as low as 4.09%, the lowest rate since June 5. Italy’s government securities have gained 6.5% thus far this year, while Spanish bonds have returned 10%.

Prospects Daily: Developing-country stocks fall on China, Czech Republic economic sentiment improves for third month, China’s flash Manufacturing Purchasing Managers’ Index rises to a seven-month high

Financial Markets… Italian government bonds retreated on Thursday as the government report showed the nation’s consumer confidence index fell to the lowest level since June, damping investors’ risk appetite on high-yielding bonds. The benchmark Italy’s 10-year yield widened 4 basis points to 4.16% after dropping to as low as 4.09%, the lowest rate since June 5. Italy’s government securities have gained 6.5% thus far this year, while Spanish bonds have returned 10%.

Prospects Daily: Japanese stocks decline on stronger yen, Spain exits recession, South Africa annual headline inflation slows

Financial Markets…Japanese stocks declined the most in three weeks as stronger yen pushed exporters’ shares lower. The benchmark Topix index lost 1.5%, the steepest drop since October 2, and the Nikkei 225 index fell 2%. The Japanese currency appreciated against all of its 16 major counterparts, gaining 0.8% versus the dollar to 97.37. The Topix has been the worst performer among 24 developed-market benchmark stock indexes this month, after the Japanese government decided to raise the sales tax for the first time since 1997 and the U.S.

Prospects Daily: Developing-country stocks advances, U.S. existing home sales declines, China builds up foreign exchange reserves

Financial Markets…Global exchange-traded funds that track everything from equities and bonds to commodities received about $47 billion inflows since September 1 with nearly $7 billion going into ETFs on October 17 alone amid resolution of the U.S. budget impasse.  EFTs registered about $18 billion outflows in August, after posting $40 billion inflows in July and $11 billion outflows in June, making it the most volatile period on record for money flows.

Prospects Daily: Global financial markets rally, S. federal government reopens, uth Africa’s wholesale sales growth slows

Financial Markets… Global financial markets rallied early Thursday on the back of a U.S. debt deal, but euphoria from U.S. fiscal rally gave out to concerns over the implications of the 16-day U.S. government shutdown and prospects of fiscal tension again in January.  U.S. and Asian stock markets initially greeted the U.S.

Prospects Daily: One-month U.S. T-bill rates spike, U.S. Congress reported to be heading towards resolution to reopen the federal government, Thailand’s central bank keeps its key benchmark policy rate unchanged

Financial Markets…Global financial markets were on edge on Wednesday as investors awaited on U.S. debt deal. European stocks opened lower in morning trade after U.S. equities slumped yesterday following failed U.S. House plan to a debt-ceiling agreement, while Asian markets excluding Japan also suffered. Fitch Rating put U.S.’s AAA credit rating on negative watch yesterday, citing the government’s failure to avert the debt default as the deadline looms large. Nevertheless, many investors remained hopeful that U.S.

Prospects Daily: Chinese Yuan at 20-year high, German investor confidence climbs to 42-month high, India’s annual headline inflation rises to a 7-month high

Financial Markets… Global equities advanced on Tuesday as signs of a U.S. debt deal boosted investor sentiment.  Europe’s Stoxx 600 index gained 0.8% to a three-week high and the MSCI Asia Pacific Index rose 0.4% to its highest level since May. Developing-country shares climbed to a four-month high, with the MSCI Emerging Market Index rising 0.7%, led by sharp gains in Emerging Europe stocks.

Prospects Daily: U.S. equities remains strong, U.S. consumer sentiment at lowest level since January 2013, India’s industrial outputs expands at a weak pace

Financial Markets…The long-dated U.S. Treasuries gained for the first time in four days today, with the benchmark 10-year note yield sliding 3 basis points to 2.66%, as investors remained cautious about a quick resolution of the U.S.

Prospects Daily: Global equities and the dollar rally, U.S. jobless claims jump sharply amid more distortions, Malaysia’s industrial production eases

Financial Markets… Global equities and the dollar rallied on Thursday as some signs of progress towards resolving the U.S. budget deadlock eased fears of a disastrous debt default.  Europe’s Stoxx 600 index gained 1.4%, bouncing back from a one-month low, and U.S. equities opened higher in morning session, with the S&P 500 and the Dow Jones Industrial Average advancing 1.4% and 1.3%, respectively.  The dollar index (DXY), which measures the greenback against the 6 major currencies, rallied to near a three-week high.

Prospects Daily: Gold slides, German industrial production rises while UK’s falls, India’s trade deficit narrows to a 30-month low

Financial Markets… German government securities advanced on Wednesday as lingering U.S. deadlock over the country’s debt ceiling bolstered the demand for safe-haven assets. Yields on benchmark 10-year German notes fell to 1.8%, heading for the lowest level in eight weeks. In contrast, U.S. Treasury rates climbed for a second day, with the 10-year note yield rising to 2.66%, as investors pulled the money out of the U.S. government assets amid rising risk of debt default.

Prospects Daily: U.S. T-bill yields hit highest levels since August 2011, New Zealand business sentiment at 14-year high, Indonesia keeps key benchmark interest rate unchanged

Financial Markets…U.S. short-term government bonds have been sold, with yields on one-month Treasury bill climbing to their highest levels since August 2011 on Tuesday, as investor concern has intensified over the prospect of U.S. debt default.  The 1-month T-bill rates rose to 0.22% today, rising above 1-month London interbank rate (0.17% in earlier trading) for the first time in at least 12 years.  Meanwhile, the benchmark 10-year bond yield was down slightly at 2.63%.

Prospects Daily: Global equities extend last week’s decline on concerns over ongoing US government shutdown, the World Bank lowers its growth forecast for Developing East Asia

Financial Markets… Global equities retreated on Monday, extending last week’s decline, as growing concerns over ongoing U.S. government shutdown and the debt-ceiling deadlock weighted on investor sentiment. The Stoxx Europe 600 Index fell 0.7% to nearly four-week low level in afternoon trading, while the MSCI Asia Pacific Index slid 0.8%, after falling 1.2% last week, led by a 1.4% loss of Japan’s Topix index. U.S. equities opened lower again, with the S&P 500 dropping 0.7% and the Dow Jones industrial average falling 0.8%. In contrast, U.S.

Prospects Daily: ​Continuing US government shutdown pushes global equities further lower, Eurozone producer prices remain flat, India’s purchasing managers’ index for the service sector weakens further

Financial Markets… The continued U.S. government shutdown and growing worries over impeding debt deadline for the world’s biggest economy pushed global equities further lower on Friday. The benchmark MSCI world equity index is gearing for a second consecutive week of losses after posting considerable gains in recent rally. Meanwhile, developing-country is heading for a weekly gain, with the MSCI Emerging Market Index advancing 0.2% to extend this week’s gain to 0.7%.
 

Prospects Daily: Philippines’ sovereign debt rating is raised to investment grade, Eurozone business sentiment at 27-month high, China’s purchasing managers’ index for non-manufacturing rises to six-month high

Financial Markets…German government bonds fell for a fourth day, with the benchmark 10-year yield rising as much as 4 basis points to 1.85%, as higher-than-expected August retail sales in the Euro-zone added to signs that the region’s economy is recovering. Improved political stability after Italy’s Prime Minister Enrico Letta won a confidence vote on the support of leftwing allies and centrist members also helped market sentiment. German bonds declined 1.6% this year through yesterday, while Spanish and Italian securities gained 9.5% and 4.8%, respectively.

World Bank published latest commodity prices: September 2013

Damir Cosic's picture
In September of 2013, energy prices increased by 0.6%, while the non-energy commodities eased by 0.7%. Food prices are off by 0.6%, beverages increased by 0.5% while raw materials edged up by 0.9%. Fertilizers plunged by 5.5%. Metals were down by 1.3%, while precious metals were nearly flat with 0.3% increase.

Indices of Nominal US$ Prices, Percent Changes (August 2013 to September 2013)

Prospects Daily: ​The US dollar depreciates over prospect of standoff on debt ceiling and weak jobs report, Australia’s trade deficit improves, Brazil’s industrial production falls

Financial Markets… The dollar depreciated to a 5-week low of 97.32 against the Japanese yen in early Wednesday trading as the prospect of another standoff over raising the debt ceiling and an unexpectedly weak U.S. private-sector jobs report added to worries about the economic impact of a U.S. government shutdown. Both the euro and the British pound also gained against the greenback, rising to 8-month highs and 9-month high, respectively.

Prospects Daily: ​Developing-country stocks advance, Canada’s manufacturing PMI at 15-month high, China’s purchasing manager’s index rises marginally

Financial Markets… Developing-country stocks advanced for the first time in six days as robust manufacturing data from Emerging Europe, especially Turkey and Russia, off-set concern about a shutdown of the U.S. government. The benchmark MSCI Emerging Market Index rose 0.6% after a 5-day decline, which pushed its valuations to a 3-month low. The gauge surged 5% in the third quarter, its largest quarterly gain this year, helped by the Fed’s surprise restrain from tapering its stimulus program.