Market Update 24/10/13

One line- Markets mixed as continued concern about Chinese banks is weighed against a seven month high for China's PMI.

- Concern about Chinese banks is replaced by optimism in Asia and Europe this morning as China's PMI came in at a 7 month high of 50.9, exceeding forecasts. The Nikkei added 0.4% while the FTSE is up 0.3% this morning. Safe havens are selling off with Treasury yields climbing and the yen and dollar selling off.  http://www.ft.com/cms/s/0/c9448194-3c5b-11e3-9851-00144feab7de.html?siteedition=uk#axzz2iX5GUUWU

- Emerging stocks sold off for a second day as investors weigh worries about Chinese banks. The MSCI emerging markets index sold off 0.2%. http://www.bloomberg.com/news/2013-10-24/most-emerging-stocks-rise-as-indian-shares-gain-china-slides.html

- The Spanish unemployment rate fell for a second quarter as the economy emerged from a two year recession. While there are improvements the unemployment rate sits at 26%. The Ibex 35 index is up 21% this year. http://www.bloomberg.com/news/2013-10-24/spanish-unemployment-falls-as-economy-emerges-from-recession.html

- The trend in developed country's central banks is to extend the easy money while the inflation outlook is benign according to the IMF which predicts <2% inflation for 2014. While this may be the case concern is growing that assets, especially housing, may be overvalued. http://www.bloomberg.com/news/2013-10-23/central-banks-drop-tightening-talk-as-easy-money-goes-on.html

- Credit Suisse revealed disappointing third quarter earnings that fell well below analyst predictions. In response the investment bank said it would overhaul its rates trading business which has been affected by increased regulation, higher capital requirements and subdued markets.  http://www.ft.com/cms/s/0/8136cdaa-3c68-11e3-a8c4-00144feab7de.html#axzz2iX5GUUWU

Data

S&P 1746.38 0.47%

FTSE 6691.93  0.26%
Nikkei 14,486.41 0.42%

EUR/USD- 1.3796 0.15%
USD/JPY- 97.38 0.00%
GBP/USD- 1.6179 0.09%

Gold- 1335.90 0.18%
Oil (Brent)- 107.87 0.06%

Copper- 326.40 0.11%

 

 

10 year yields

US- 2.50 (-1bps)
UK- 2.61 (+2bps)
Japan- 0.60 (0bps)