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Market Summary 13 September 2013

13th September 2016

London Markets:

 

London stocks edged up at the start of trading, taking their cue from gains overnight on Wall Street, on the back of dovish remarks from a top US central bank official.
As of 0813 BST the FTSE 100 was higher by 13.31 points at 6,714.21.

Speaking to the Chicago Council on Monday evening, US Federal Reserve Governor Lael Brainard said that there was no rush to move ahead on raising rates, or in her more abstruse words, that "asymmetry" in risks "counsels prudence in the removal of policy accommodation".

CMC Markets' Michael Hewson commented: "Despite all the recent softness in both stock and bond markets in recent days over concern about a more hawkish Federal Reserve the fact remains that a Fed rate rise this month still remains a fairly low 22% probability.

"Though yesterday's decline in European markets may have been a direct result of Friday's sharp US selloff, today's higher European open is set to come about as a result of last night's sharp rebound in US markets after permanent Fed member Lael Brainard reinforced earlier comments from non-voting member, and Minneapolis Fed President Neal Kashkari that there was no rush to move ahead on raising rates, pulling US stocks sharply off their intraday lows."

Brainard warned that with inflationary pressure continuing to remain benign, against a backdrop of slowing ISM data and continued global uncertainty, this "counsels prudence in the removal of policy accommodation" ahead of the central bank's blackout period ahead of next week's policy meeting.

Also overnight, Chinese industrial output and retail sales figures for August came in ahead of economists´ forecasts.

Production from the country´s industrial sector grew by 6.3% year-on-year (consensus: 6.2%), while retail sales accelerated from a 10.2% year-on-year pace to 10.6% (consenus: 10.2%).

"The upshot is that today's data fits with our long-running view that the delayed impact of earlier policy easing means that a stronger second half to this year is likely," Julian Evans-Pritchard, China economist at Capital Economics said in a research note sent to clients.

On the data front, UK CPI, RPI and PPI are all due at 0930 BST.

Headline CPI was expected to accelerate from a 0.6% year-on-year pace in July to 0.7%, with the core rate rising from 1.3% to 1.4% alongside it, with a further pick-up expected in the months ahead as the weakness in sterling fed through into companies' pricing decisions.

Consumer price inflation in Germany on the other hand was steady at 0.4% over the year in August, data released by the Federal Office of Statistics before the start of trading showed, but the core rate - which strips out food and energy - slowed from 1.3% to 1.2%.

European Central Bank president Mario Draghi was scheduled to deliver a speech at 1000 BST.
 

 

European Markets:

European stocks edged higher in early trade, recovering from the previous session's losses and taking their cue from a positive close on Wall Street following dovish comments by Federal Reserve governor Lael Brainard.
At 0840 BST, the benchmark Stoxx Europe 600 index and France's CAC 40 were up 0.4%, while Germany's DAX was 0.5% higher.

At the same time, oil prices retreated. West Texas Intermediate was down 1.7% to $45.52 a barrel while Brent crude was off 1.4% at $47.64.

Stocks in the US ended higher on Monday on the back of a dovish speech by Federal Reserve governor Lael Brainard, who said at the Chicago Council on Global Affairs that although economic progress is being made, it would be wise for the Fed to keep monetary policy loose.

In addition, Minneapolis Fed President Neel Kashkari told CNBC that policy makers should take their time to when it comes to making a decision on rates.

Andy McLevey, head of dealing at stockbroker Interactive Investor, said: "European markets have opened tentatively higher in early trading aided by the recovery on Wall Street and in Asia overnight as Federal Reserve governor Lael Brainard maintained a dovish stance on any potential rate rise providing welcome relief to markets.

"With a number of dissenting voices however the future is still unclear and it remains to be seen if investors have the desire to push markets higher amid the backdrop of political and economic uncertainty. With the volatility of late set to continue this may throw up trading opportunities at stock level for the shrewd investor."

 

The information set out herein has been obtained from various public sources and is sent to you by way of information only. Schreiber Associates International can accept no liability of any sort in relation thereto and readers should obtain their own verification of any statement before making any decision which may have any financial or other impact.
Neither the information nor the opinions herein constitute, or are they to be construed as, an offer or a solicitation of an offer to buy or sell investments.

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