Market Action

  • Stocks in the US returned to posting gains during the week. Janet Yellen’s press conference on Thursday showed no definitive sign of monetary tightening, boosting markets.
  • Other major markets also gained during the week. The continued depreciation of the Yen is proving ebullient for the Nikkei while European markets ended higher after Scotland’s rejection of independence by a larger margin than forecasted. China’s markets served as an exception, moving downwards in light of poor housing data. The People’s Bank announced new stimulus measures for the largest banks.
  • Currencies captured the markets attention this week. The pound’s weakness early in the week turned around as the Scottish referendum’s plea for the status quo consolidated. The dollar hit multi-year highs against the Yen, breaking 109. Early reports from Japan point to Q3 GDP growth being weaker than originally hoped.
  • The IMF lowered global growth expectations for 2015 and 2016. The announcement further strengthened the dollar and kept a lid on crude prices. Forecasts from the EIA and IEA echoed concerns about economic growth and pushed oil down before an OPEC statement on production cutbacks sent energy higher.
  • Euphoric anticipation over Alibaba’s IPO was finally addressed as the Chinese giant listed on the NYSE Friday. The retail firm raised a record $21.8 billion despite concerns about management and legal structures.
  • In the Federal Reserve’s press conference the commitment to keep rates low was reiterated as analysts obsessed over the semantics of the statement. Chair Yellen also stated that its balance sheet might remain larger than normal until the end of the decade.
  • Data on the ECB’s TLTRO loans was released on Thursday and came in very disappointing. Demand was lower than expected, dimming remote hopes of a stimulating effect.

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