Market Update 23/10/13

One line- Broad risk off moves on Chinese bank concern with stocks, energy and industrial metals down while the yen, the dollar and government bonds are rallying.

- US and European stocks rallied yesterday on weaker than expected jobs data with 148 000 non farm payroll jobs added compared with a 180 000 forecast. The US unemployment rate dipped 0.1% to 7.2%. The data supports the market view that tapering is very unlikely in the near term. The S&P and the FTSE both added 0.6%. http://uk.reuters.com/article/2013/10/22/uk-markets-britain-stocks-idUKBRE8710BE20131022

- Asian stocks reversed their rally as traders worried about tightening interbank lending in China. The country's seven day repurchase rate, a measure of liquidity in the banking system, at one point rose 42 basis points to 4%. Investors flocked to safe haven assets with bonds, the yen and the dollar rallying. The Nikkei sold off 2%. European markets are off this morning.  http://www.ft.com/cms/s/0/5d4b837e-3b8a-11e3-87fa-00144feab7de.html?siteedition=uk#axzz2iX5GUUWU

- The ECB outlined its planned health checks of eurozone banks, with the assessment to include an asset quality review of bank balance sheets. The review will cover 85% of EU banking assets. European banking stocks are lower this morning. http://www.ft.com/cms/s/0/a27d75d0-3bb5-11e3-b85f-00144feab7de.html#axzz2iX5GUUWU

- Bank of England policy makers concluded at their October policy meeting that unemployment is falling faster than forecast and the economy is growing faster than expected. Policy was left unchanged. http://uk.reuters.com/article/2013/10/23/uk-britain-boe-idUKBRE99M06R20131023

- India and China signed a new agreement to ease tensions over their disputed Himalayan border while Indian PM Manmohan Singh, said it would take a lot longer for the two countries to settle their differences. The deal commits the two armies to maximum self restraint if they come into contact with each other and obliges them to prevent exchange of fire or armed conflict. http://www.ft.com/cms/s/0/3483a758-3bb9-11e3-b85f-00144feab7de.html#axzz2iX5GUUWU

Data

S&P 1754.67 0.57%

FTSE 6666.74  0.43%
Nikkei 14,426.05 1.95%

EUR/USD- 1.3760 0.15%
USD/JPY- 97.31 0.85%
GBP/USD- 1.6157 0.49%

Gold- 1332.06 0.60%
Oil (Brent)- 109.25 0.65%

Copper- 330.85 0.81%

 

 

10 year yields

US- 2.49 (-3bps)
UK- 2.60 (-4bps)
Japan- 0.60 (-1bps)