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Financial Headlines
  • Nikkei hits 1½ week high on US deal hopes
  • S&P 500 rises on hopes that US deal is close
  • Negotiations to extend US debt ceiling continue
  • BoE sticks to Carney’s rules as interest rate is held again
  • British growth picks up speed in third quarter
  • Britain leads Europe in tax cuts
  • ‘Abenomics’ may take ten years to have full impact
  • Capital outflows from emerging markets set to continue
  • Draghi claims euro progress
  • Gold may extend losses into 2014 according to experts
  • Dollar climbs on signs of compromise in US debt talks
  • Global wealth to rise by 40% by 2018
  • WTI crude poised for fourth weekly decline
Football Finance Focus
  • Real Madrid issued with debt warning.

Nikkei hits 1½ week high on US deal hopesAsian stocks rose a fourth day and bond risk in the region fell as US lawmakers continued talks on raising the nation’s debt limit to avoid a default. The MSCI Asia Pacific Index added 1.3% by 12:57 p.m. in Tokyo, set for the longest rally in a month, as Japan’s Topix jumped 1.8%. Standard & Poor’s 500 Index futures were up 0.1%.S&P 500 rises on hopes that US deal is closeThe S&P 500 index jumped the most since January 2nd and Treasury bill rates dropped yesterday on optimism an agreement will be reached to raise the US debt ceiling before an October 17th deadline.Negotiations to extend US debt ceiling continueRepublicans and President Obama were locked in talks last night in a bid to secure a deal to push back a looming US debt ceiling and the potentially disastrous consequences of defaulting on its debt payments. “After a discussion about potential paths forward, no specific determination was made,” the White House said following a meeting between Obama and the Republican leadership. “The president looks forward to making continued progress with members on both sides of the aisle,” it added. BoE sticks to Carney’s rules as interest rate is held againThe Bank of England held the benchmark interest rate at 0.5% yesterday for the 55th consecutive month, with no changes to quantitative easing. With the Bank’s monetary policy committee seemingly sticking to the forward guidance policy laid out by new governor Mark Carney in August, there looks to be little scope forupset in the near future. Bank rate has not risen in the UK since mid-2007.British growth picks up speed in third quarterThe pace of growth rose between July and September, above the robust performance seen in the second quarter, according to the forecast of the National Institute of Economic and Social Research, who announced that they expect the British economy to have expanded by 0.8% during the third quarter. Between April and June, the UK saw growth of 0.7%.Britain leads Europe in tax cutsThe UK has cut the top rate of income tax by more than any other country in Europe, according to analysis from KPMG out yesterday. And the fall in the top rate from 50% to 45% means Britain has leapfrogged half a dozen other countries to move from the fifth highest rate in Europe to the eleventh. It now shares the same top rate as Germany and France – still well above the US top rate of 39.6% and the EU average of 37.9%.IMF revises forecasts downwardThe International Monetary Fund (IMF) has revised its forecast for global economic growth. It now expects global growth of 2.9% this year, a cut of 0.3% from July’s estimate. In 2014 it expects global growth of 3.6%, down 0.2%.‘Abenomics’ may take ten years to have full impactJapan’s aggressive policies aimed at reviving its economy may take 10 years to have a full impact, Akira Amari, Japan’s minister in charge of economic revitalisation, has said. Known as ‘Abenomics’, these include easing monetary policy, boosting stimulus and reforming key sectors. Some of these steps have already been introduced and have boosted growth.Capital outflows from emerging markets set to continueThe capital outflows endured by the world’s developing economies are set to continue, as should interest rate hikes unless they can substantially bolster their fundamentals says Invesco chief economist John Greenwood. Since the US Federal Reserve first signalled an end to its massive $85bn per month bond buying programme, in May, emerging markets have suffered a significant market sell-offs and substantial capital outflows.Draghi claims euro progressSpeaking at Harvard University, European Central Bank president Mario Draghi last night painted a rosy picture for the single currency. Referring to the progress seen in peripheral Eurozone countries as “staggering”, he added that some in the US “underestimated the depth of Europeans’ commitment to the euro”. Draghi also insisted that more coordinated fiscal policy across the countries in the euro area did not imply a loss of sovereignty for national governments. Gold may extend losses into 2014 according to expertsGold will extend losses into 2014 amid expectations the Federal Reserve will pare stimulus as the US recovers, according to Morgan Stanley, adding to bearish calls from Goldman Sachs and Credit Suisse. “We recommend staying away from gold at this point in the cycle,” Melbourne-based analyst Joel Crane said. Bullion will average $1,313 an ounce in 2014, down from the $1,420 forecast for this year, Morgan Stanley said in its quarterly metals report published this week.

 

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