European markets to start flat ahead of US data
China’s stocks fall most in seven weeks
Asian stocks fall, snapping 11-day rally
US market falls back following seven-day gain
BoE’s Carney says stimulus working
Draghi rate vow splits economists as Eurozone rebounds
US budget gap narrows as stronger growth boosts revenue
US jobless claims fall, but reading clouded by processing problems
Italian worries spook market
French government says deficit will be hit by sluggish economy
German cost of borrowing at a 23-month high
Banks raise forecasts for China growth above official targets
BRIC markets sink to worst place for investors in global poll
WTI Crude rises amid US-Russia talks on Syria
Sterling soars to 8-month high on jobs figures
Gold heads for worst weekly loss since June
UK buyers queuing for homes, says Barratt’s chief
European markets to start flat ahead of US data
European stocks are seen opening flat today after two weeks of solid
gains in anticipation of a tightening in the flow of cheap US money
when the Federal Reserve meets next week.
China’s stocks fall most in seven weeks
China’s stocks slid the most in seven weeks, led by shippers and
banks, after UBS AG downgraded China Shipping Development Co.
and investors speculated a recent rally on the Shanghai free-trade
zone’s prospects was overdone.
Asian stocks fall, snapping 11-day rally
Asian stocks fell overnight, with the regional benchmark index on
course to snap an 11-day rally, as the US and Russia hold talks on
Syria and investors await the outcome of a Federal Reserve meeting
next week.
US market falls back following seven-day gain
US stocks slipped yesterday, ending seven straight days of gains by
the S&P 500 index as a drop in precious metal prices dragged mining
shares lower. Spot gold fell 2.6% to $1,331 an ounce as tensions with
Syria eased and on worries the Federal Reserve will begin to scale
back its monetary stimulus when it meets on Tuesday and
Wednesday. Spot silver fell five per cent to $21.99 an ounce. The
S&P 500 had risen about 3.4% over the prior seven sessions, its
longest winning streak in two months, as concerns about a Western
military strike against Syria faded.
BoE’s Carney says stimulus working
Bank of England Governor Mark Carney defended his policy of
forward guidance to lawmakers on Thursday and said signs of
recovery in Britain’s economy could prove to be another “false dawn”.
Strong economic data in recent weeks has caused financial markets to
push up long-term borrowing costs and bring forward bets on when
the Bank will increase interest rates, raising doubts about Carney’s
new policy, which aims to stop expectations of higher rates choking off
recovery. British lawmakers challenged Carney on this at a session to
explain his guidance plan. The Canadian said it was succeeding in
lowering short-term borrowing costs relative to longer ones, easing credit conditions for households and small firms. “The
economy is picking up and the stimulus is working,” he said, adding that guidance made the BoE’s pre-existing policy
stance more effective, rather than loosening or tightening it. But Carney said it was early days for the recovery and the
bank stood by its forecast that it would take at least three years for unemployment to fall to 7% – the threshold for it to consider interest rate rises. Markets by contrast think a rate rise could come in little more than a year.
Draghi rate vow splits economists as Eurozone rebounds
Mario Draghi’s forward guidance on European Central Bank interest rates has split economists down the middle. Of 31
economists in a Bloomberg monthly survey, 16 said the ECB president’s commitment that official rates would remain at
“present or lower levels for an extended period of time” hasn’t been effective. The remainder said it has. Draghi made the
unprecedented vow in July, after the Federal Reserve’s signal that it may start withdrawing US stimulus pushed market
rates higher globally. While European borrowing costs initially fell, they have since returned to levels the ECB head called
“unwarranted.” That supports the view of some economists that the Frankfurt-based central bank can’t stop rates rising
as the 17-nation currency bloc rebounds from its longest-ever recession.
US budget gap narrows as stronger growth boosts revenue
The US budget deficit narrowed in August from a year earlier as a stronger job market boosted revenue, propelling the
world’s largest economy toward its smallest annual shortfall since 2008. Outlays exceeded receipts by $147.9 billion last
month, compared with a $190.5 billion gap in August 2012, the Treasury Department said today in Washington. In the 11
months through the fiscal year that ends Sept. 30, the deficit was $755.3 billion, the narrowest for that period in five
years.
US jobless claims fall, but reading clouded by processing problems
The number of Americans filing new claims for jobless benefits appeared to drop to a near 7½ year low last week but the
decline was driven by two states that had trouble processing filings, making it difficult to get a clear read on the health of
the labour market. Initial claims for state unemployment benefits dropped 31,000 to a seasonally adjusted 292,000, the
lowest level since April 2006, the Labour Department said on Thursday.
Italian worries spook market
The threat of a political crisis pushed Italy’s funding costs higher at an auction on Wednesday, as Prime Minister Enrico
Letta warned that costs would spiral if instability is allowed to spook markets. Italy’s treasury paid 1.34% to sell €8.5bn in
one-year bills, up from 1.05% at a similar sale a month ago. On Tuesday night Italian politicians delayed a showdown
over whether Silvio Berlusconi should be barred from the senate.
French government says deficit will be hit by sluggish economy
The French government cut its forecast for growth next year to just 0.9%this week and said its public deficit would fall
more slowly than previously expected as a result. In April it had predicted growth of 1.2% for next year. Presenting
headline figures for the 2014 budget on Wednesday, finance minister Pierre Moscovici said the government now targets
a deficit of 4.1% of national output this year, up from an earlier forecast of 3.7%; and 3.6% next year, up from 2.9%. The
growth forecast for 2013 remains a feeble 0.1% as the Eurozone’s second-largest economy recovers from six months of
recession that began last year.
German cost of borrowing at a 23-month high
The German government’s cost of borrowing jumped to a near two-year high at a bond auction on Wednesday, reflecting
appetite among investors for riskier assets. The sale of 10-year debt saw the average yield rise to 2.06%, the highest
level since October 2011. Germany sold €4.076bn of its new 10-years, attracting the same demand as at a similar sale in
August despite the higher yield on offer.
Banks raise forecasts for China growth above official targets
Prospects for Chinese growth this year appear to be firming, as banks raise their growth forecasts and the government
commits to reforms. In contrast to some other emerging markets, institutions are becoming more optimistic about China’s
economic prospects for the rest of the year. Predictions of economic growth in 2013 have been hiked to 7.6% by UBS
and Nomura, above the government’s 7.5% target. Deutsche Bank has raised its forecast for the second time in a month,
to 7.9% growth in the third quarter and 8% in the fourth.
BRIC markets sink to worst place for investors in global poll
For the first time, the largest developing nations have the worst market opportunities as optimism for stronger growth
shifts to the US and Europe – according to a Bloomberg global poll. India fared the poorest, followed by Brazil, Russia
and China, a worldwide poll of investors, analysts and traders who are Bloomberg subscribers showed this week. The
number of respondents who see the European Union as one of the two best opportunities rose to 34%, its best showing
in the poll dating to 2009, with the US at 51%.
WTI Crude rises amid US-Russia talks on Syria
West Texas Intermediate crude climbed a second day on Thursday ahead of talks between the US and Russia to resolve
the crisis in Syria, a conflict that’s bolstered concern that Middle Eastern oil supplies may be disrupted.
Sterling soars to 8-month high on jobs figures
Sterling jumped to its highest level in eight months on Wednesday as the UK posted another set of impressive labour
market numbers. The pound was printing above $1.58 Wednesday evening, having climbed from $1.49 since early in
July. The rise has been steady across the last eight weeks, yet was boosted yesterday by a 0.1% fall in the UK’s
unemployment rate to 7.7%. A seven and a half month high was also reached against the euro, as sterling beat €1.19 in
the day’s trading. The currency also struck a four-year high against the yen, while the trade-weighted sterling index rose
to an eight-month high of 82.6, Bank of England data showed.
Gold heads for worst weekly loss since June
Gold advanced from the biggest decline since June, trimming its worst week in more than two months, before the US
Federal Reserve meets to consider tapering its monthly asset purchases and as investors weighed signs that the threat
of a US attack on Syria is easing. The metal fell 3.2% yesterday and is set to slump 4.7% this week, the most since the
period to June 28th
.
UK buyers queuing for homes, says Barratt’s chief
Housebuilder Barratt Developments yesterday said queues were forming for its housing schemes for the first time since
the financial crisis, as the market recovery spreads beyond southeast England. Britain’s largest housebuilder by volume,
said yesterday that buyer appetite for its homes was so strong that for some sites it was making five to 10 sales on the
day of a scheme’s launch. “We are seeing some very, very strong interest on new sites that we’re launching around the
country, even to the point where we’re starting to see queues … which is not something we have seen for many, many
years.” chief executive Mark Clare said. Britain’s housing market, which declined following the financial crisis, has revived
in recent months thanks to government efforts to ease mortgage lending, as well as a general increase in confidence in
the health of the economy.
Football Finance Focus
Barcelona looks outside of Spain for new sponsor
FC Barcelona has agreed a three-year partnership with the UAE’s United Arab Bank in a deal that represents the
Primera Division champion’s first partnership in the financial sector outside of Spain and Andorra. The deal, which runs
through to July 2016, positions United Arad Bank as Barcelona’s official partner in the UAE and places the bank as the
first and exclusive financial partner of the club in the UAE. As an official partner of Barcelona, the bank will create a range
of customised products and offers for the club’s fans across the UAE. United Arab Bank joins Barcelona’s regional
partner tier alongside Chang Beer, Big Cola, Castle Lager, Nokia, Rexona, Avea, Head & Shoulders and Indesat.
French clubs welcome talks of backtrack on ‘super tax’ plan
France’s Ligue 1’s leading clubs could be handed some welcome news after French media reported that the country’s
government is considering scaling back its controversial 75% rate of tax on high-earning individuals. The government of
President Francois Hollande has sought to introduce a 75% upper income tax rate that would have applied to anyone
earning in excess of Eur1 million per year. The new tax was seen as a means to aid the ailing French economy, but the
French Football League (LFP) and clubs have repeatedly expressed their concern that its effect on a host of Ligue 1’s top
stars could have led to a talent drain from France’s top flight.
