Markets Roundup Eyeing Central Banks

European markets finished lower on Monday as a drop in oil prices weighed on energy shares, with markets failing to find support in new economic growth and inflation data. Shares in France’s CAC 40 was down 0.73% leading the indexes lower, while London’s FTSE 100 was off 0.60% and the sinking retail sales in September led Germany’ s DAX lower by 0.29%.

Markets are also keeping a cautious eye on important rate decisions issued by several Central banks during this week. The decison comes at a time when bond markets appear to be starting to price in higher inflation. The Annual inflation in the euro area is expected to increase to 0.5% in October from the 0.4% recorded in the previous month. Services, food alcohol and tobacco were among the highest contributers to the rising consumer prices.

On Monday, the Bank of England Gov. Mark Carney said he will serve an additional year beyond the five-year term he committed when taking the post but will be two years short of the usual eight years governors serve. Following the pound's decline after the U.K. voted to leave the European Union, pro-Brexit campaigners urged Carney to step down before his current term expires due to his support of the country remaining in the EU. On Thursday, the Bank of England will feature the bank’s quarterly inflation report.

Energy prices continued to trade in the red, extending earlier losses after a major oil producer not belonging to the Organization of the Petroleum Exporting Countries (OPEC), failed to make any guarantees to freeze the crude output. The non-OPEC members stated they preferred to sort out their differences before agreeing to the production cap that is likely to draw the prices upwards. Tracking this the West Texas Intermediate December Future dropped 2.08% at one point with Brent Crude oil following course down 2.5%.

On Wall Street, the majority of the US Markets had a positive opening nearly one week ahead of the elections in the Unites States (8th of November). Markets are also paying close attention to the Federal Reserve’s interest rate decision on Wednesday, although market participants see a probable interest rate rise in December. The Strong dollar, was mostly stimulated by these growing speculations of the near future rate hike and even holding the gold price at a steady price remaining at a three-week high.

Other news:

The Global provider of information technology Hexagon AB was in the red following news that their Chief Executive Ola Rollen is under investigation in Norway for insider trading from personal investment but not related to Hexagon. The allegations came in relation to the acquisition of 284,341 shares in Next Biometrics. Shares in the company were in the red by around 9%.

The U.K based advertising Giant WPP was up by 4.10% after posting a third quarter revenue growth more than actually expected from markets. The company performed well in key markets, including Western Europe and North America. Amid this, the growth was lower when compared with the previous year’s quarter, which may reflect the first impact of the Brexit uncertainties.

Author – Rodrick Duca