“It just goes to show that we’re still dealing with the same old headwinds: this low-interest rate environment, which will go on for a while, and the regulatory scrutiny”.
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Germany’s 10-year bund yield fell four basis points, dropping below zero for the first time in a week, and wiping out a weekly increase that had been driven by the European Central Bank failure to flag an immediate expansion of bond-buying programme.
The dollar index, which tracks the US unit against a basket of six major rivals, was a touch higher at 95.508, after wobbling in a narrow range this week between a low of 94.935 on Monday and a high of 95.672 on Tuesday.
In the banking space, Mitsubishi UFJ Financial is higher by more than 1 percent. That followed gains on Thursday of as much as 2.5 percent as renewed risk appetite stemmed a two-day rout. On Friday, the spread between 2-year and 20-year government debt yields was 0.73 per cent, down from 1.33 per cent before quantitative easing.
Metropolitan Bank & Trust Co. rose 1.8 percent to P86.90, while food manufacturer Universal Robina Corp. gained 1.5 percent to P183. On Thursday, Sept. 15, 2016, the Federal Reserve reports on US industrial production for August.
Health-care companies, deemed safe in times of economic turmoil, posted the best performances.
This week, sterling is unlikely to fall further as the market is not only short of the currency, but investors are hopeful of a few pleasant surprises in the next raft of macroeconomic indicators. The Labor Department reported Thursday that producer prices were unchanged in August. The tentative outlook is negative for dollar.
In Europe, indices are putting a halt to the overnight rallies. Germany’s DAX 30 ended 0.4% lower at 10386.60. The U.K.’s FTSE 100 Index advanced by 0.9 percent, the German DAX Index rose by 0.5 percent and the French CAC 40 Index inched up by 0.1 percent. France’s CAC 40 tumbled 1.2% and UK’s FTSE 100 slipped 0.5% with United Kingdom inflation coming in weaker than expected. Before the release of the report, the Aussie was at levels near $0.7479. At 11:00 CET July Industrial Production will be published in euro-zone.
Spot gold fell to a two-week low, trading down 0.7 per cent to $US1,313.31 an ounce.
A long way from hitting its 2 percent inflation goal, the BOJ may expand its radical negative interest rate policy and modify its asset-purchasing program in a bid to galvanize domestic demand by driving down lending rates, said sources familiar with the bank’s thinking. Such a move will hurt banks’ earnings but will benefit life insurance companies.
In May 2013 then-Federal Reserve chairman Ben Bernanke hinted that the Fed would soon begin scaling back its QE bond-buying, and in April 2015 German bond prices buckled under the weight of historically extreme market positioning. Australia’s All Ordinaries Index is up 0.3%.
Brent crude settled up 74 cents, or 1.6 percent, at $46.59 a barrel, while USA crude settled up 33 cents, or 0.76 percent, at $43.91. USA crude WTI is trading lower -0.6% to +$43.66, poised to end the week down -4.8%.
Commodity currencies corrected sharply at the end of last week in the face of both the United States dollar’s rebound and a slump in commodity prices, including Brent.
The rouble fell 0.4 per cent as cheap oil and increased volatility in emerging markets earlier in the week led investors to avoid riskier assets. Gold lost 0.1% for its fifth straight decline.
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Japan’s Nikkei extended gains to close 0.7 percent higher, but posted a weekly loss of 2.6 percent on worries about the course of action the Bank of Japan will take at its policy review on September 20-21. Overviews are not updated. IFC Markets and its employees under any circumstances are not liable for any action taken by someone else during or after reading the overview.
