Week 42

17 October – 21 October

 

17 October

 

Shares in Crown, which is controlled by billionaire James Packer, fell as much as 12.5 per cent in Sydney on Monday following reports this weekend that 18 of the company’s employees – including three executives – had been detained by authorities in China. In a statement, Crown said it had “yet to be provided with details of why its employees have been detained,” but the arrests, carried out in a series of overnight raids on Thursday and Friday are believed to be related to a crackdown on practices to lure high-rolling gamblers.

 

The dollar index, a measure of the US currency against a basket of its peers, was up 0.1 per cent this morning at 98.109, a seven-and-a-half-month high. The S&P 500 closed flat on Friday.

 

Consumer price inflation in the eurozone hit its highest level since 2014 last month, confirmed at 0.4 per cent year on year from 0.2 per cent in August, according to a final reading from Eurostat.

 

Investors are striking a wait-and-see position on Monday as they await for the onslaught of third-quarter earnings, which kick into high gear this week. With an hour to go before the market open, US stock index futures were little changed, with all three main indices set for a flat or slightly lower opening.

 

18 October

 

A weak US dollar is supporting currencies across Asia today, but it has given an additional boost to the New Zealand dollar, which had already leapt higher on better-than-expected inflation data.

 

In a word, credibility. Mr Macri, a former businessman, appreciates the importance of regaining market confidence. Indeed, reform of the state-run Indec statistics institute is one of the pillars of this trust-building strategy. When the Indec announced last month that poverty levels were at 32.2 per cent of the population, compared to the previous administration’s claims last year of 5 per cent, many observers who value the truth (perhaps perversely) saw this as good news.

 

Spending on clothes and footwear in the UK has dropped to its lowest level in seven years, according to data released on Monday. Kantar Worldpanel, the research group, said that in the 12 months to September 25 £700m had been wiped off the value of the market compared with last year — the steepest decline since 2009. It added that the slide in the pound was likely to exacerbate the decline.

 

UniCredit has priced the first ten-year bond from Italy’s banking sector this year, in a sign of appetite for longer-dated risk in European credit markets. The Italian lender is borrowing €1bn at a yield of just under 2.2 per cent. The senior unsecured bond is rated at triple B minus by Standard & Poor’s, and attracted orders of €1.6bn, reports Thomas Hale in London.

 

19 October

 

The pound had its best day since fears of a “hard Brexit” gripped the currency market two weeks ago after a UK government lawyer said that parliament would have the final say on whether to accept Britain’s exit deal with the EU.

 

Sterling’s stunning decline to 168-year lows has caught up with the fear-driven rally in UK government bonds, with the risk of higher inflation, of which there are already some early signs, and the chance of overseas investors balking at British bonds pumping up yields on gilts.

 

HarbourVest has finally caught its prey. But it has cost it more than £800m. The Boston-based fund has finally been victorious in a battle for SVG Capital, the London-listed private equity group, securing 100 per cent of its investment portfolio in a deal valued at around £807m.

 

Harley Davidson, the iconic motorcycle maker, said on Tuesday it planned to “steamline” its business later this year after a steep drop off in demand in its all important US market dragged third quarter earnings sharply lower.

 

20 October

 

The currency popped up above $1.10 after Mr Draghi initially said the central bank’s governing council had not yet discussed extending its asset purchase programme beyond March, but subsequently erased the gains as he reaffirmed the benefits of low rates and made clear there will be no sudden stop to QE.

 

Australia has sold the country’s biggest electricity distribution network to an “all-Australian bid” just two months after it blocked companies from China and Hong Kong from bidding on national security grounds.

 

In slamming an ExxonMobil-led oil consortium with a $75bn fine this month, Chad’s government sought to flex its muscles against one of the world’s largest oil companies at a time of economic crisis. But in moving against a project that has returned more than $13bn to the government since 2004, Chad’s President Idriss Déby is also showing signs of the pressure he is under.

 

A majority stake in Ausgrid, the largest power network company in the eastern Australian state of New South Wales, has been sold by the state government to two domestic pension funds for A$16.2bn.

 

21 October

 

The Hong Kong Observatory had its storm signal no. 8 in place at 12pm local time, meaning trading on the Hong Kong Exchange has been cancelled for the day. This has led to the HKEx to cancel today’s trading session for all securities and derivatives, including after-hours futures trading on the exchange. No clearing and settlement services will be provided, and there is no northbound trading on Shanghai-Hong Kong Stock Connect, HKEx added.

 

The coffee bean and conflict have historically gone hand-in-hand, but the surge in popularity of specialty, or premium, coffee over the past few years has spurred the search for different tastes. This has taken coffee merchants and roasters to new frontiers, including former conflict areas where tensions still simmer as well as active war zones.

 

Pressure is growing on the UK government to let companies water down their pension promises to millions of workers, as rising inflation threatens to push up the cost to employers. A report by the trade body for 1,300 schemes — including those of Tesco, British Airways and Marks and Spencer — has suggested that allowing salary-linked pensions to pay less generous inflation rises could help keep them solvent.

 

Shares in Mitsubishi Motors have risen in Tokyo on news Carlos Ghosn, the chief executive of the Renault-Nissan alliance, is expected to be appointed as the new chairman of the automaker.