Fundamental Analysis – 16/10/2015

Good Morning,

U.S. stocks closed higher Thursday as financial stocks rallied and mostly soft economic data supported the case for a rate hike delay. The Dow Jones industrial average and S&P 500 recovered to close above the psychologically key levels of 17,000 and 2,000, respectively, after closing below on Wednesday. The NASDAQ composite outperformed, closing up 1.82% as the iShares leaped nearly 4.4% and Apple gained 1.5%. United States Consumer Price Index Ex Food & Energy (YoY) registered at 1.9% above expectations (1.8%) in September. United States Consumer Price Index (YoY) came in at 0%, above expectations (-0.1%) in September. The IMF garnered headlines last week for lowering their world economic growth outlook. United States Initial Jobless Claims came in at 255K below forecasts (270K) in October 9. The Federal Reserve’s policy dilemma deepened Thursday with new data showing a persistently sluggish pace of inflation, held down largely by lower gas prices. September final demand PPI decline and 0.3% core PPI drop. Both the Empire State and Philly Fed revealed tiny headline gains but component weakness that signal the weakest month since October of 2012. The Empire State Index came in at -11.36, worse than any economist’s estimates. Federal Reserve Bank of New York President William Dudley cautioned Thursday that his expectation the Federal Reserve will raise short-term interest rates this year depends on the performance of economic data, and cited evidence of it weakening recently. United States EIA Natural Gas Storage change came in at 100B, above expectations (93B) in October 9. USDCHF is trading at 0.9512 while GBPUSD is trading at 1.5474.

Economists argued that ECB president Mario Draghi would not stray too far from his holding position next week, while continuing to emphasis a willingness to add more stimulus if needed. The German government has trimmed its growth forecast for this year, citing weakness in major emerging economies. The head of Britain's spending watchdog has attacked "unacceptable" government plans to increase transparency at the Bank of England, saying they created a false impression of greater accountability. FTSE indices ended on the front foot. EURUSD is trading at 1.1367 while EURGBP is trading at 0.7344.

NZD rose to a two-month high against the EUR after a European Central Bank official suggested more stimulus measures were likely for the region. The Chinese middle class has grown to outnumber the U.S. middle class for the first time, with 109 million Chinese adults now counted in that category compared with 92 million American. On Thursday the Nikkei average rose 1.15% to 18,096 after two sessions of declines. Lending by Chinese banks surged by far more than expected in September, with 1.05tn yuan ($165.47bn) in new yuan loans extended following moves to stop the economy slowing by cutting interest rates and prioritizing infrastructure projects. NZGB2027 yields closed down 12bps. AUDUSD is trading at 0.7331 while USDJPY is trading at 118.95.

Daily Performances (00.00 am. GMT);

I hope you all have a nice day.

All the figures are as at the writing time.