Market Update 01/11/13

One line- Weak eurozone data and a less dovish than hoped Fed causes a continuation of market sell offs.

- Fed minutes released on Wednesday were less dovish than was hoped although expectations are that tapering will not begin until the new year. On the news risky assets sold off  and the dollar strengthened. http://www.ft.com/cms/s/0/e9aefa0a-4187-11e3-9073-00144feabdc0.html#axzz2jNs26y1X

- Currency market movements are making headlines as weak economic data in the eurozone and a less dovish fed have caused the dollar and yen to strengthen while the euro sells off. Stock markets around the world have sold off with the S&P losing 0.4%, the Nikkei losing 0.9% and the FTSE is off 0.2% this morning. Gold sold off losing $18 to $1324 an ounce. Euro area CPI came in at 0.7% the lowest level in four years, according to a flash estimate, while 60 000 more people became unemployed in the region keeping the jobless rate at a record high of 12.2%. http://www.ft.com/cms/s/0/9f3b5a92-41da-11e3-b064-00144feabdc0.html#axzz2jNs26y1X

- In emerging markets China's PMI rose to an 18 month high, while India's stock market hit a record high yesterday following positive corporate earnings and a general increase in optimism. PMI readings today will be announced for the UK, the US and Mexico. http://www.bloomberg.com/news/2013-11-01/manufacturing-strengthens-from-china-to-south-korea-economy.html http://www.ft.com/cms/s/0/21266d22-42b1-11e3-9d3c-00144feabdc0.html#axzz2jNs26y1X

- Israel attacked two military targets yesterday the latest in a line of covert operations the country is carrying out. An official within the Obama administration said he believed Israel attacked because it did not want a transfer of weapons between Assad and Hezbollah which it believed had happened. http://www.ft.com/cms/s/0/3cdb8d12-4267-11e3-8350-00144feabdc0.html#axzz2jNs26y1X

- Squeezed margins in the global refining industry are hurting the worlds largest oil companies with Shell, Total and ExxonMobil all citing poor downstream business as a reason for their declining earnings. http://www.ft.com/cms/s/0/fb2d2414-41ff-11e3-bb85-00144feabdc0.html#axzz2jNs26y1X

Data

S&P 1756.54 0.38%

FTSE 6725.14 0.09%
Nikkei 14,201.57 0.88%

EUR/USD- 1.3525 0.43%
USD/JPY- 98.30 0.06%
GBP/USD- 1.6002 0.24%

Gold- 1321.26 0.10%
Oil (Brent)- 109.14 0.28%

Copper- 332.20 0.65%

 

 

10 year yields

US- 2.56 (+1bps)
UK- 2.61 (-1bps)
Japan- 0.58 (0bps)