Insight from our top analysts on the news that matters
The Canadian GDP missed the market estimates in September by an unexpected 0.5% contraction. The Canadian dollar weakened past 75 cent against the US dollar. The cheap oil remains one of the major challenges for the Canadian economy. The downtrend in oil prices is still the developing story and the market may have not hit its bottom yet.
Oil futures consolidate losses despite news that OPEC production declined by 33’000 to 32,121 million/day. The output still exceeds OPEC’s collective quota of 30 million barrel a day. OPEC is given little ...Read article
The IMF decided to include the Chinese Yuan in the SDR yesterday. Yuan will be part of the world’s reserve currency basket from October 1st 2016, with 10.92% weighting. The yuan has gained as the PBoC is now expected to reduce intervention and let the market decide on the yuan’s value. PBOC Vice Gov Yi Gang said ‘there is no basis for yuan to continue to devalue, the inclusion in the SDR should make yuan more stable and facilitate cross border investment, yet the PBoC will still intervene on ...Read article
Weakness in mainland Chinese stocks after both the official and Caixin PMIs showed manufacturing remains subdued. The official Purchasing Managers’ Index (PMI), which tracks activity in the crucial factories and workshops sector, fell to 49.6 and was the lowest print since August 2012. The market appears to be taking this as a signal that further easing is now on the cards from Beijing. To be fair, this has been a recurring theme in market movements post crisis.
Certainly it would appear that the Reserve Bank of Australia is unconcerned ...Read article
The European central bank meeting is giving a good dose of stress to the Swiss National Bank and Riksbank.
The move in the Swiss franc has been the major event in the foreign exchange market last Friday. The EURSEK took a five-figure dive to 9.2158 this morning. Central banks are certainly behind the scene before the Dec 3rd ECB meeting. Given that the ECB is expected to expand its QE program and also cut the deposit rates into deeper negative territory, Riksbank and the SNB seem willing to ...Read article
The European stock markets reversed earlier losses on the weaker euro, leaving the FTSE stocks back in the negative territory. The rout in iron ore is leaving its mark and preventing any credible moves through the 6400 level.
The FTSE effectively underperforms its European peers this morning and the negative divergence is mostly due to its high level of exposure to oil and commodity prices. The WTI contacts traded down to $41.50/bbl in Asia, copper futures are not willing to give up on the $2/lb support.
In line with the market expectations, the UK’s gross domestic product printed a 0.5% expansion on the third quarter second read, the year-over-year expansion steadied at 2.3%. The government accelerated its spending to 1.3%q/q, the capital expenditure increased by 1.3%q/q and the total business investments grew by an encouraging 2.2%q/q.
On the back of the coin, the stronger pound had a visible impact in narrowing trade terms. Exports slowed to 0.9%q/q from 1.9%, while imports reversed course and surged to 5.5%q/q from -2.7%.<... Read article
All is well with the world, or at the very least a degree of déjà vu has returned. The Shanghai Composite closed down 5.5% after various major brokerage firms announced that they were being probed over possibly breaking securities market rules. Despite a 28% rebound form the lows in late August the index is once again under pressure and remains some 34% below the highs posted back in mid-June.
Commodities continue to look soft. Gold is looking set to plunge even further depths in the near term should the $1064/...Read article
The Australian capex spending fell by a record 9.2% in Q3, much faster than 2.9% drop the market was anticipating. Last quarter’s fall has also been revised lower to -4.4% from -4.0%. The Aussie is the biggest loser against the US dollar so far. The very weak data is expected to keep the RBA alert for a possible further cut on its cash rate. RBA’s Kent had stated last week that ‘if commodity prices continued to weaken, AUD would need to fall further to help rebalance the economy.’ Read article
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