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.
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.
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.
The World Bank just published the October edition of the commodity markets outlook. The report notes that the weakness in commodity price is expected to persist. One exception is energy, where geopolitical tensions in the Middle East and supply disruptions of key OPEC producers have kept oil prices elevated..
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.
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.
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%.
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.
Indices of Nominal US$ Prices, Percent Changes (August 2013 to September 2013)