Global Market Report - October 10

The global market mood remained cautious as the US 10-year bond yield inched higher and traders await US inflation data and the start of earnings season

Morningstar 14/10/2561

Global Market Report

Asia

Markets in Asia-Pacific made very modest gains after recent heavy losses at the start of the week. Mainland China and Hong Kong indices closed slightly higher after a bright start faded at the close. Japan’s Nikkei was also in positive territory after a mixed session. South Korea lost ground after trading resumed following a public holiday, with the Kospi falling over 1% to 2228 points.

The yuan’s continuing decline remains a political issue, with US Treasury Secretary Steve Mnuchin warning Beijing against “competitive devaluations”, a long-running concern of the Trump administration.

Europe

Britain’s leaders received a blow from the International Monetary Fund today when it ranked UK public finances as among the weakest in the world. Britain’s public sector wealth has diminished since the financial crisis, the IMF said. It also urged companies to step up their preparations for life after Brexit, in its latest Global Financial Stability Report. A messy Brexit would destabilise the global economy, the IMF concluded.

A recent gain in the pound has held back the FTSE 100 amid broader losses for European indices.

Monthly GDP for August, a relatively new measure from the ONS, remained flat at 0.7%. A slowdown in industrial output troubled some economists.

In stock news, cake and coffee retailer Patisserie Valerie (CAKE) saw its shares suspended after the company found “potentially fraudulent” accounting irregularities.

North America

US Treasury yields continue to creep higher, a move that is expected to keep a lid on equity gains this week.

US consumer price inflation is the highlight of the economic calendar this week – the data is due on Thursday and it is expected to show a slight rise on August levels of 2.2% to 2.3% in September.

This week sees third quarter earnings season kick off in traditional style with the Wall Street banks reporting earnings. JP Morgan (JPM) is first out of the blocks on Friday, although once again tech firms will be in the spotlight after last earnings season's Facebook crash.

 

 

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