Market Update 28/10/13

One line- Risk on moves as concern over the Chinese banking system subsides.

- As concerns about the Chinese banking system wanes global equities closed in on 6 year highs. The Nikkei added 2.2% on a weaker yen and the Hang Seng added 0.5%. Industrial commodities are firmer with copper up 0.2% and brent trading up 0.8%. Treasuries sold off marginally and gold is flat. http://www.ft.com/cms/s/0/1cb2c432-3f7f-11e3-9657-00144feabdc0.html?siteedition=uk#axzz2j0eXHBC8

- RBI Governor Raghuram Rajan is expected to raise rates tomorrow for the second straight month as India's consumer inflation was 10% in a year ending last month. The rupee has strengthened 9% since Rajan took the reins but is still down 13% against the dollar for the year. http://www.bloomberg.com/news/2013-10-27/rajan-seen-raising-key-rate-again-to-tame-fastest-asia-inflation.html

- The outrage over the activities of the NSA continues as German paper Der Speigel alleges that Merkel's mobile phone activity has been monitored since 2002. Leaked documents were the source. What is not clear is the extent of the monitoring- whether conversations were monitored or whether it was only data about calls made that was collected. http://www.ft.com/cms/s/0/65044af4-3f15-11e3-b665-00144feabdc0.html#axzz2j0eXHBC8

- Optimism is growing in Europe that the recovery is gathering momentum. Housebuilding is picking up and car registrations have ended their decline. Anecdotal evidence in the tourism industry also indicates a change of fortunes for the area. While there are a growing number of optimists many managers are wary of being to positive about the recent growth. http://uk.reuters.com/article/2013/10/28/uk-europe-recovery-idUKBRE99R05220131028

- Britain's energy regulator is on course for a battle with the "Big Six" energy providers in Britain as consumer costs increased by double figure %'s but wholesale costs only increased 1.7%. Energy company bosses are to appear in front of the energy select committee on Tuesday as anger mounts over the price increases.  http://www.ft.com/cms/s/0/8c375508-3d67-11e3-b754-00144feab7de.html#axzz2j0eXHBC8

Data

S&P 1759.77 0.44%

FTSE 6725.38 0.06%
Nikkei 14,396.04 2.19%

EUR/USD- 1.3811 0.07%
USD/JPY- 97.62 0.21%
GBP/USD- 1.6205 0.25%

Gold- 1351.74 0.08%
Oil (Brent)- 107.64 0.66%

Copper- 328.25 0.41%

 

 

10 year yields

US- 2.51 (+1bps)
UK- 2.62 (+1bps)
Japan- 0.61 (0bps)