PhillipCapital UK Daily Market News Report 04.11.2019
04 November

PhillipCapital UK Daily Market News Report 04.11.2019

The world’s largest trade bloc could be formed in February 2020 between Asian countries if an agreement is reached, a Thai government spokeswoman said yesterday as negotiators have returned to talks after new demands from India. The Asia-wide Regional Comprehensive Economic Partnership (RCEP), also backed by China, has now been delayed at the summit of the Association of Southeast Asian Nations (ASEAN) in Bangkok, Thailand. If it goes ahead, the trade bloc could be bigger than the European Union. Meanwhile, Russia has also been lobbying on expanding its Eurasian Economic Union inviting Albania and North Macedonia to join after the EU delayed once again opening accession talks with them. The Balkan countries have also been invited by China to join the CEEC informal bloc together with several eastern and central European countries.


Oil prices eased today as traders cashed in on profit ahead of fresh European and U.S. economic data, despite hopes for progress in the U.S.-China trade row that has hurt global economic growth and energy demand. Prices jumped about $2 a barrel on Friday after U.S. officials said the deal could be signed this month. Brent crude then fell 16 cents today to $61.53 while U.S. crude was at $56.04 a barrel, dropping 16 cents. The European Union and the United States are set to announce manufacturing data today with more U.S. and Chinese figures coming in later in the week. OPEC’s output recovered in October from an eight-year low after a rapid recovery in Saudi Arabia’s production from attacks on its oil infrastructure in September which offset losses in Ecuador and voluntary cuts under the pact. Saudi Aramco launched an initial public offering initiative yesterday, but details on the number of shares to be sold, pricing or the date for a launch were scarce.


Asian shares were climbing today, some hitting 14-week highs after Friday’s upbeat U.S. job data boosted global investors’ appetite for riskier assets. MSCI’s Asia-Pacific shares jumped 1.08%, reaching its highest level since July 24. Hang Seng gained 1.36%, and Seoul's Kospi rose 1.43%. China’s CSI300 was also up 0.72% as were Australian shares which gained 0.27%. Markets in Japan were closed for a holiday. Equity markets in Europe while more cautious, still followed the optimistic trend with Euro Stoxx 50 up 0.53%, German DAX 0.49% higher and FTSE climbing 0.41% in early trading. The S&P 500 gained 0.97%, the Nasdaq climbed 1.13% and the Dow Jones was up 1.11% on Friday. In the currency market, the dollar edged up 0.06% against the yen at 108.23 JPY and the euro was up 0.02% to buy $1.1167. The dollar index inched down 0.02% at 97.222. A jump of 1.42% in the South African rand against the dollar took place after Moody's defeated expectations of a downgrade, instead maintaining South Africa's investment-grade rating on Friday. China’s yuan also strengthened, last up 0.15% at 7.0267 per dollar. Gold was slightly lower as investors moved into riskier assets trading at $1,511.52 per ounce, down 0.13%.


The Reserve Bank of Australia will be holding its monetary policy decision this week. The central bank is expected to keep interest rates unchanged at 0.75%. Australia’s consumer prices rose 1.7% on the year during the third quarter, still below the RBA’s 2% inflation target. The Bank of England will be holding its monetary policy meeting on Wednesday and is expected to leave the interest rates and the asset purchases unchanged waiting for the upcoming December elections and Brexit which has been postponed to January 2020. Canada will be releasing its monthly labour market report this Friday expected to show a strong jump in job creation. The unemployment rate remains near historical lows. The BoC voted last week to keep interest rates steady but forecast that growth could slow pressured Prime Minister Trudeau’s minority government further. Quarterly labour market report is also due to come out in Zealand. The RBNZ lowered interest rates during this year but disappointing results could stoke expectations of further rate cuts from the central bank.


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