Reuters reports that the Russian government approves law to clamp down on offshore tax sheltering:
- Part of a range of measures initiated by President Vladimir Putin collectively known as “deoffshorisation”
- Aimed at bringing Russian businesses and money home from foreign jurisdictions
- Russian assets abroad are vulnerable to to Western sanctions
More at the link
Dong Yang, secretary general of the China Association of Automobile Manufacturers (CAAM) says he expects growth in China’s auto market will halve to 7%
- He cites a slowing economy
- “The economy is slowing. The auto industry would reflect that but typically lags the economic cycle by a bit.”
Reuters have more
China’s official official Xinhua news agency reported that Vice Premier Zhang Gaoli has ordered a temporary shutdown of factories during the November 7-11 APEC meeting
- To combat air pollution issues during the meeting
- This along with a the announcement already that public workers in Beijing will be given six days off during the meeting
Am I reading that right, the APEC meeting is in a 7-11?
Slurpees for everyone!
What are your best trading ideas for the week ahead?
What will be the best performing currency in the week ahead?
Iraqi government security officials report that they took control of the town of Jurf Al-Sakhar from Islamic State fighters on Saturday. The town is 50km to the south of Baghdad.
Earlier this week there were signs of defense forces gaining the upper hand in the siege of Kobani near the Turkish border in Syria.
US central command also said it conducted 22 airstrikes against ISIS in Iraq on Friday and Saturday.
Brazil holds a runoff election between President Dilma Rousseff and candidate Aecio Neves on Sunday.
Polls show Rousseff with a small but surmountable lead in the polls. The Brazilian market would prefer change and that may have some small spillovers into the global risk trade early in the week. If the results are close the forex market may open for the week before we know a clear winner.
Last week, Brazil’s Bovespa index was down 6.79% despite the massive rally in virtually every other equity index around the globe. Signs of relief came in a 2.4% rally on Friday.
There may be a slump on Monday if Rousseff is reelected but no matter who wins, expect the index to begin to turn play catch up with other markets by mid-week.
At worst, you might see something like the 2012 US Presidential election where the market slumped nearly 6% in the 7 sessions following Obama’s re-election followed by a non-stop rally through year-end.
At the same time, the market will also be digesting the results of the ECB’s stress test/AQR.
CNBC reports that a healthcare worker returning from Africa has been stopped at the Newark airport and quarantined.
Naturally, politicians and public health officials are going to be extra-cautious in the next few weeks as the finger-pointing begins.
Forex news for October 24, 2014:
One of the reasons Europe is sinking is that it has so many leaks. Nothing is kept secret in Europe and there’s now very little drama left in the stress test results after the major newswires obtained draft copies. It looks like 25 banks were asked to raise money and only 10 of 190 are on the naughty list.
No great trading theme developed in the FX market in US trading although stocks remained bubbly and that helped the US dollar but only mildly.
Ebola fears greatly dissipated and until there are signs about a genuine uncontrolled outbreak, I don’t think the market will flinch too hard on headlines any longer.
USD/JPY took a quick trip down to 107.78 early in US trading as stops were run on jitters but it bounced back quickly and we finish midway through the daily range at 108.13.
The Australian dollar put a bit of a squeeze on shorts early in US trading as the broad commodity complex did better. But the shine came off later in the day and AUDUSD drifted to 0.8797 from 0.8824.
Canadian dollar sellers are clearly lurking in the weeds and for the fourth consecutive day and test of 1.1200 in USD/CAD was rejected and the pair climbed back to 1.1239.
Have a great weekend!
- Outlook on the long term for Italy and Spain are stable
- Fitch forecasts Italy GDP to contract by 0.2% in 2014 followed by growth of 0.6% in 2015
Stable is nice but BBB+ isn’t exactly something to stake an election campaign on.
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