Week 39

26 September – 30 September

 

26 September

 

Deutsche Bank’s beleaguered stock took a fresh hit late in Monday trading to close down 7.5 per cent in a torrid start to the week for Germany’s biggest lender.

 

Poland’s rightwing populist government has forecast a 2.6 per cent deficit this year and 2.9 per cent in 2017, banking on an increased tax haul to offset significantly higher spending. But a slowdown in economic growth and underwhelming forecasts have cast doubt on its ability to raise revenue, amid political pressure to follow through on costly election promises.

 

Crude has been gaining steadily throughout the London trading session and is now 3.16 per cent higher at $47.34 a barrel, as speculation continues about the possible outcome of the meeting.

 

The Turkish lira fell as much as 0.8 per cent and stocks slid on Monday morning after Moody’s downgraded the country’s debt to junk, following a failed July coup that prompted a similar downgrade from S&P Global Ratings.

 

27 September

 

This week there have been indications that international companies are considering such a move. The Global Financial Centres Index, which ranks the world’s leading hubs on a range of measures, shows Dublin (as well as Luxembourg) on the rise. It says early indications following the referendum are that decision makers are weighing up Dublin as a potential location if they need to leave the UK.

 

The Mexican peso is leading a risk appetite rally, with equities rising and bond prices nudging lower, as markets assume that the first US presidential debate did little to boost Donald Trump’s chances of securing the White House.

 

Gemfields plans to step up output with $100m of capital spending over the next three years after annual profits almost doubled.

 

Turkey’s Bist 100 index was down 4 per cent while a drop in 10-year government bonds pushed their yield 40 basis points higher.

 

28 September

 

The International Monetary Fund warned on Tuesday that a “broad-based phenomenon” of low inflation, fed by a collapse in commodity prices and faltering demand, risked deteriorating into a full-blown deflation trap, particularly in advanced economies. Governments needed to join central banks, which were increasingly seen to be running out of options, to do more to boost growth and raise incomes, it said.

 

Deutsche Bank is at the centre of an intense market sell-off, reflecting investor concern about a looming fine from the US government. Patrick Jenkins, the FT’s financial editor, asks Laura Noonan, investment banking correspondent, and Chris Wheeler, an analyst at Atlantic Equities, if there’s any way out for the German lender.

 

Bonds in Petróleos de Venezuela advanced to their highest levels since crude last traded above $100 a barrel after the heavily indebted state-owned oil group sweetened the terms it offered to creditors in a closely watched debt exchange.

 

Asian markets struggled to hold on to yesterday’s gains following the US presidential debate as equities faltered despite a positive lead from US stocks and hopes of an agreement to freeze oil production levels.

 

29 September

 

Japan has begun a revamp of its gross domestic product numbers because of rising concern about their accuracy, following a Bank of Japan report that suggests a huge understatement of growth in 2014.

 

Hefty gains for US energy stocks amid soaring crude prices helped Wall Street recover early losses, while a rebound for European financials — led by Deutsche Bank — lifted equity indices on the other side of the Atlantic.

 

The Securities and Exchange Commission on Wednesday finalised new standards that may allow investors in Europe to trade critical US markets such as equities, options and Treasuries, on a similar playing field to American counterparts.

 

Sweden’s krona has reached an unsustainably low level that will force the country’s central bank to confront a realisation that is dawning on others about the limitations of monetary easing, analysts are predicting.

 

30 September

 

The lira, which plummeted at the beginning of the week after Moody’s downgraded the country’s credit rating to junk status, fell further to 3.007 to the dollar on Thursday, highlighting investors’ concerns that the economy was being held increasingly hostage to politics.

 

East African nations should take advantage of their strong economic growth to attract foreign investment at time when the continent’s commodity exporters are grappling with their worst downturn in years, Kenya’s central bank governor said.

 

Hedge funds have started to pull some of their business from Deutsche Bank, setting up a potential showdown with German authorities over the future of the country’s largest lender.

 

Nissan is delaying new investments in its Sunderland plant until the UK has concluded Brexit negotiations with the EU, its chief executive said on Thursday in the first public admission by a carmaker that concerns over future tariffs are hurting business decisions.