October, 7th 2016
Daily Market Commentary
- The main Asian stock gauge has nudged slightly higher this week, heading for a 0.3 percent advance, as investors await U.S. economic reports and watch for comments by Fed officials to assess the path of interest rates.
- A third day of losses sent European stocks toward a weekly decline as investors awaited a U.S. jobs report amid growing bets for a Federal Reserve rate rise.
- The dollar climbed to 10-week high and equities retreated before American payrolls data that may bolster the case for the Federal Reserve to raise interest rates this year. The pound tumbled as much as 6.1 percent. In what many are referring to as the ‘flash crash’, with automatic trading and algorithms to blame.
- Russia’s central bank may extend its unprecedented commitment to leave interest rates unchanged beyond this year and through the first quarter if inflation is too slow to decelerate, according to First Deputy Governor Ksenia Yudaeva.
- China watchers are starting to put a price tag on what any collapse in the nation’s red-hot property market could cost banks. A drop of 30 percent in housing prices could cause 4 percent of total loans worth 4.1 trillion yuan ($615 billion) to sour, according to DBS such a drop could trigger 4 trillion yuan in delinquencies.
- Metals: Gold: 1257.56 (+$3.18, +0.25%), Silver: 17.36 (+$0.04, +0.25%); Copper: 2.1540 (-0.07%); Aluminum: 0.7628 (+0.30%); Zinc: 1.0508 (-0.26%)
- Energy: Crude: 50.28 (-0.32%); Brent: 52.18 (-0.63%); Nat Gas: 3.05 (+0.03%)
- Oil dropped near $50 a barrel after Russia cast doubt over a deal anytime soon with OPEC, following the cartel’s pledge to reduce output.
- Gold is on course for the biggest weekly loss in two years as expectations increase that the Federal Reserve is on the verge of raising U.S. interest rates, buoying the dollar and pushing bullion toward the lowest level in four months.
- Canadian stocks ended the day lower as a rout in gold miners worsened while financial shares advanced on speculation that interest rates are poised to rise.
- Canadian bond investors are signaling that the worst may be over in the oil patch as yields on the debt of energy producers like Suncor Energy Inc. and Husky Energy Inc. shrink to levels near those before the two-year-plus crude rout took hold.
- Barrick Gold Corp.’s stake in the Kalgoorlie Super Pit mine has drawn interest from Kinross Gold Corp. and Zijin Mining Group Co. in a sale that could fetch as much as $1 billion. Australian producers Newcrest Mining Ltd., Northern Star Resources Ltd. and Evolution Mining Ltd. are also reviewing data on the mine ahead of possible indicative bids, which are due by the end of October.
- To hold a slowing market at bay, carmakers in the U.S. are offering the biggest incentives on full-sized pickups since December 2008, when the country was mired in recession and the auto industry was collapsing.
- U.S. stock-index futures fell as investors awaited a key payrolls report for indications of the likely trajectory of interest rates. The September employment release from the U.S. government is in focus after recent reports suggested the economy is gathering pace.
- Wal-Mart Stores Inc. is butting heads with the U.S. government over how to wrap up a long-running foreign corruption investigation. Officials have proposed that the world’s biggest retailer pay at least $600 million to resolve probes by the Justice Department and the Securities and Exchange Commission into whether it bribed government officials in markets from Mexico to India and China.
- A surge in Mexico’s pay-TV prices is the latest sign that the peso’s swoon is exacerbating inflation. Televisa SAB, the world’s largest Spanish-language broadcaster, and TV Azteca SAB say they are increasing the cost of some cable packages by at least 4 percent this month because of the weakening currency.
- Exxon Mobil Corp. was ordered to pay a record $74 billion fine in Chad for underpaying royalties in the central African nation where the company has been drilling for 15 years, according to a court document.
- Total SA agreed to sell its specialty chemicals unit Atotech to Carlyle Group LP for $3.2 billion as the French oil company disposes of non-core assets to weather a slump in crude and preserve payouts to shareholders.
- Pakistan is seeking foreign investment of $1.7 billion to build a new highway in the southern province of Sindh to supplement a Chinese-funded infrastructure network being laid across the country.
- Nippon Yusen KK, Japan’s largest shipping company by sales, will book a record one-time loss for its shipping and air-cargo divisions as freight rates remain depressed amid global overcapacity. Nippon Yusen will record a 195 billion yen ($1.9 billion) charge to reflect a drop in the value of its assets and those it plans to own.
- Essar Group, controlled by India’s billionaire Ruia brothers, is nearing a final agreement to sell control of its refinery unit to Russian energy giant Rosneft PJSC and commodities trader Trafigura Group Pte. The suitors have been discussing a valuation of about $6.5 billion for Essar Oil, India’s second-largest private refiner.
*All information is taken from Bloomberg, unless otherwise noted.