Euro-area inflation turns negative again, it’s the last day of an awful quarter and lots of Federal Reserve verbal interventions are due. Here are some of things people in markets are talking about today.
1. Euro-area inflation
Inflation in the Euro-area unexpectedly turned negative in September, falling to minus 0.1 percent, according to a flash estimate from Eurostat, the European statistics agency. The drop was driven by falling energy prices, with a breakdown of the headline number showing that component dropping 8.9 percent from a year earlier.
2. Awful third quarter
If you had a bad third quarter in markets, you are not alone. Almost $11 trillion has been wiped off the value of global stocks in the three month period, and oil has posted its worst quarter since 2009. China’s Shanghai Composite Index was the worst performing benchmark global gauge, falling 29 percent, its biggest quarterly loss since 2008. Asian currencies also suffered multi-year record losses and even gold continues to suffer, posting its fifth successive quarterly loss, its worst performance since 1997.
3. Fed speak
There is plenty more verbal guidance expected on Wednesday with a raft of Fed board members speaking. Later today we have Lael Brainard, James Bullard and Janet Yellen due to speak at the Community Banking Research and Policy Conference in St. Louis, Missouri and William Dudley speaking in New York. With market-based expectations for a rate rise in 2015 still below 50 percent, it will be worth watching to see if the recent hawkishness continues.
4. No relief for Abe
At a speech at Bloomberg’s New York headquarters on Tuesday Japanese Prime Minister Shinzo Abe said his government is focused on putting the Japanese economy on the path to growth via a new policy program called Abenomics 2.0. It seems there is a lot of work to do as data released overnight shows increasing chances of another recession with industrial output unexpectedly falling for a second month in a row in August. Abe’s attempts to increase participation of women in the workforce seem to be failing too, as a program providing subsidies to firms for promoting women has received precisely zero applications in its 17 month history.
5. Glencore bounce
Share in Glencore Plc staged a strong recovery yesterday in London following comments from the company that attempted to reassure investors that there was no cause for concern. The shares were trading 11.5 percent higher to 90 pence at 11:10 a.m. in London, bring the two-day recovery to 30 percent. Despite this recovery, the company’s shares are still trading far below the 125 pence it raised capital at on September 16, with some now expecting the company to announce further asset disposals. Glencore executives are scheduled to meet with bondholders today.