Market Update 30/10/13

One line- Shares and bonds rally ahead of Fed meeting that is expected to give clues that recent events in the House have made tapering less likely in the near future.

- Global stocks are at near six year highs ahead of the result of the Fed meeting today. US equities and Treasuries rallied yesterday and the momentum continued through Asia and to Europe this morning. The S&P added 0.6% yesterday, the Nikkei 1.2% while the FTSE is up 0.6% this morning. While almost all investors do not see tapering on the cards, the market is looking for what is said in the Fed's accompanying statement. Gold is up and industrial commodities are firmer while currencies are little changed. http://www.ft.com/cms/s/0/ad7a3438-4113-11e3-8775-00144feabdc0.html?siteedition=uk#axzz2jCJlgISU

- German unemployment rose for the third month in a row in October with 2000 unemployed added to the 2.97 million. The jobless rate was unchanged at 6.9%. Forecasts for German growth in the 4th quarter expect a slowdown from 0.7% in the second quarter to 0.4% growth.  http://www.bloomberg.com/news/2013-10-30/german-unemployment-rises-for-third-month-as-economy-loses-pace.html

- Britain's financial watch dog the FCA will pledge a shake up of the opaque way asset managers in the UK pass on charges to their customers. This follows a report in which the organisation found inherent flaws in the system. http://www.ft.com/cms/s/0/59b33776-40ca-11e3-ae19-00144feabdc0.html#axzz2jCJlgISU

- European banks bill for misconduct grew yesterday as fresh revelations from UBS and Deutsche Bank came to light. The Libor scandal claimed a new scalp with Rabobank, the Netherlands biggest lender, being forced to pay a $1.1 billion fine and agreed to axe its CEO.  UBS has set aside $682 million to deal with legal costs while Deutsche bank has set aside 1.2 billion euros. http://www.ft.com/cms/s/0/5bb4cf48-40c6-11e3-ae19-00144feabdc0.html#axzz2jCJlgISU

- Blackrock's Larry Fink has urged Fed officials to begin tapering as he begins to see bubble like signs in the equity markets and the corporate debt markets. http://www.bloomberg.com/news/2013-10-29/blackrock-s-fink-says-there-are-bubble-like-markets-again-1-.html

Data

S&P 1771.95 0.56%

FTSE 6812.75 0.56%
Nikkei 14,502.35 1.23%

EUR/USD- 1.3760 0.11%
USD/JPY- 98.25 0.06%
GBP/USD- 1.6066 0.12%

Gold- 1348.99 0.29%
Oil (Brent)- 109.13 0.11%

Copper- 331.05 0.99%

 

 

10 year yields

US- 2.49 (-1bps)
UK- 2.56 (-4bps)
Japan- 0.58 (-2bps)