Latest Market Summary
THE US ECONOMY ADDED 261,000 JOBS IN OCTOBER
Below the expected 310,00 figure economists had forecast, as the job market rebounded following Hurricane’s Irma and Harvey. The unemployment rate fell to 4.1 percent, the lowest level since 2000, due to the number of people in the labour force declining. Wage growth last month remained stagnant, growing at 2.4 percent year-on-year which is the slowest rate in 18 months.
JAY POWELL WILL BE THE NEXT FEDERAL RESERVE CHAIR
Replacing Janet Yellen when her first term ends in February. Donald Trump made the appointment on Thursday after weeks of speculation that he could re-nominate Yellen or even make a more dramatic appointment. There was little disruption in the markets, with many economists noting that Powell will continue the same gradualist policy of hiking interest rates as Yellen.
UK INTEREST RATES ROSE FOR THE FIRST TIME IN A DECADE
With the bank rate rising 25 basis points to 0.5 percent. The Monetary Policy Committee voted 7-2 in favour of the hike although warned there remain risks to the UK’s economic outlook. Traditionally a rate hike would support a currency, however following the news the pound weakened against the euro and dollar to close the week at €1.1266 and $1.3077, respectively.
JAPANESE EQUITIES ROSE FOR THE EIGTH STRAIGHT WEEK
With the Nikkei 225 index up 2.4 percent from the previous Friday close. Positive market sentiment was driven by reassuring stability in the government following Prime Minister Shinzo Abe’s resounding victory in the country’s snap election. Abe immediately announced a $17bn injection of cash to deal with some of Japan’s greatest democratic challenges.
OIL PRICE REMAIN AT A 2 -YEAR HIGH
With Brent crude avoiding a retracement below $60 a barrel. Positive sentiment was helped by the falling number of active US oil rigs, although the strongest influence comes from this month’s OPEC meeting, with bullish investors hoping that the global curb on output will be extended until the end of 2018. WTI and Brent crude finished the week at $55.64 and $62.07 a barrel, respectively.
IN OTHER FINANCIAL NEWS :
- China’s economic activity weakened in October,,with the manufacturing PMI index at 51.6 – well below September’s reading of 52.4, a 5-year high.
- Venezuelan bond prices crashed,,as the government moved to restructure $100-150bn of its debt, a move widely expected following US sanctions in August.
- BMW recalled 1 million US cars,,after the carmaker found that two separate faults in its 3 series models increased the risk of fire.
- Alibaba revenue rose 61 percent in the third quarter,,measured against the same period last year, as the Chinese online retailer expands its offline presence.
- Apple shares hit a record high,,following the tech giant’s announcement of a 12 percent increase in third quarter sales. The company is now valued at $900bn.