Financial markets were fairly driven by speculation in regards to Spain and a string of positive economic data from the US.
Spain was at the forefront for investors who were expecting the country to seek financial assistance amidst rising backlash on austerity measures being undertaken by Spain. However, after conducting a successful bond auction sales, Spanish yields have not been that alarming, giving the country more breathing space.
The FTSE100 started the week on the positive with US manufacturing data and the Spanish bank stress tests which managed to push the index higher. Spanish banks stress tests showed that the country’s banks would require an amount of €59.3 billion towards recapitalization within the 100 billion Spain had asked previously.
Monday also saw the data from Bank of England on the mortgage front which showed that approvals managed to move higher by 47,665 in August making it a modest increase compared to July’s 47,556. Manufacturing, construction services PMI showed a slowdown in the sectors with the exception of the services PMI which came out soft but showed an expansion.
ISM manufacturing data from the US came out better than expecting, rising to 51.5 in September, higher than August’s 49.6 making it the highest reading since May.
Overall, Monday saw the FTSE closing 78.38 points higher at 5820.45.
Tuesday’s data saw the UK economy growing by 0.5% in the three months leading up to September, according to reports from the BCC.
Wednesday saw a choppy trading session with negative news from China and some positive job market data from the US. China’s slowdown has been impacting the Australian markets. The RBA in its monthly interest rate decision decided to cut the key interest rate by 25 basis points with the likelihood that more rate cuts would be undertaken if the need arises.
Meanwhile, Bank of Japan concluded its two day MPC meeting and left its policy largely unchanged. Investors were highly speculating that the BoJ could embark on more easing with pressure from the new Finance minister.
The ADP private sector report showed a total of 162k jobs being added in September.
Thursday held some major economic news from across the global markets with key interest rate decisions by the respective central banks. However, monetary policy across the world was largely unchanged. The BoE left interest rates unchanged and also kept steady the asset purchase program. November will likely see some action in regards to the quantitative easing policy.
|Indices at a glance|
|FTSE 100 Index||5871.02 (0.74%)|
|German DAX||7397.87 (1.27%)|
|CAC 40||3457.04 (1.64%)|
|Dutch AEX||332.53 (1.49%)|
|NIKKEI 225||8863.30 (0.44%)|
|Hang Seng||21012.38 (0.50%)|
|Shanghai Composite||2086.17 (1.45%)|
|NASDAQ Composite||3136.19 (-0.42%)|
|Dow Jones Industrials||13610.15 (0.26%)|
|S&P 500||1460.93 (-0.03%)|
Key events for the UK for the week ahead – October 8 – 12
08/10/2012 – Michael Page International Q3 Results: The week kicks off with 3rd quarter results from recruiter Michael Page. In spite of the deteriorating market conditions during Q2 of 2012, the recruiter managed to deliver a gross profit which was down 0.5% compared to the same period last year.
09/10/2012 – BRC Retail Sales Report: Tuesday will see lot of economic data starting with the BRC retail sales report for September. So far September has proven to be a bit better with retail sales seeing signs of growth with autumn/winter related sales. However, food prices seemed to be softer.
The RICS September survey will be out on Tuesday as well. August’s data showed the selling price balance coming out firmer by -18.9%. September’s data is expected to be around -19%.
Industrial and Manufacturing production output figures for August will be released with the expectations that manufacturing output to decrease by 0.6% for August while industrial output is expected to fall 0.5%.
The UK Trade deficit data will be coming out as well. July’s trade deficit managed to narrow down the gap to stand at -£7.2 billion. August’s data is expected to see a widening trade deficit data likely to be at -£8.7 billion.