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Week Ending 25th October 2015
1
NEFS Research Division Presents:
The Weekly Market
Wrap-Up
NEFS Market Wrap-Up
2
Contents Macro Review 3 United Kingdom
United States Eurozone
Japan Australia & New Zealand
Canada
Emerging Markets
10
India China
Russia and Eastern Europe Latin America
Africa South East Asia
Equities
16
Financials Oil & Gas
Retail Technology
Pharmaceuticals Industrials & Basic Materials
Commodities
Energy Precious Metals
Agriculturals
22
Currencies 25
EUR, USD, GBP AUD, JPY & Other Asian
Week Ending 25th October 2015
3
THE WEEK IN BRIEF
China slowdown
continues
China’s growth rate has continued to fall,
dropping below 7% for the first time in six years.
This comes despite the recent devaluation of
the Chinese currency, which has clearly not
been enough to prevent Chinese growth from
falling further in the third quarter of this year.
The slowing of economic growth in China is
impacting negatively on a number of other
economies globally. Japan has seen a
reduction of exports to China, holding back their
own economic performance, whilst Singapore
has also felt the effect of China’s falling growth,
only narrowly avoided moving into recession
this week. The current trend in Chinese growth
seems set to continue as China grows into a
more developed economy.
Falling
unemployment
Unemployment reached its lowest level for
seven years in the UK, falling to 5.4% this week,
which points to a domestic strengthening amid
global uncertainty. The same pattern can be
seen in the US unemployment figures, as the
rate currently sits at 5.1%. There was also good
news in Spain this week, as the measure far
exceeded expectations, with the percentage of
people unemployed falling to its lowest level for
four years.
Monetary stimulus in
Europe
Mario Draghi, the president of the European
Central Bank, indicated that further quantitative
easing in the Eurozone is imminent. Whilst Euro
area growth has improved to some extent in
recent times, suggesting that domestic demand
is strengthening, Draghi pointed to slowing
growth in the emerging markets, China in
particular, as the reason for the Eurozone’s
sustained poor performance. Draghi’s speech
shocked the markets, with the Euro moving
closer to parity with the Dollar, while the FTSE
Eurofirst 300 index surged up 4% following the
news. It remains to be seen whether the
stimulus, expected to come in December, can
help take the Eurozone back towards pre-crisis
growth levels.
Oil prices remain low
While there was some rebound of oil prices later
in the week, the downward trend of oil prices
has continued, contributing to falling inflation
globally, with UK inflation falling to -0.1% earlier
this month. Sustained low oil prices have
contributed to reduced profits and job losses
within the industry, while share prices within the
industry look set to continue to fall, despite a
recent improvement. With BP and Shell
announcing further cuts to their investment
plans in the UK this week following reduced
profits, the future of the sector is uncertain.
Jack Millar
NEFS Market Wrap-Up
4
MACRO REVIEW
United Kingdom
This week marked the state visit of China’s
president Xi Jinping to the UK, with trade and
investment deals worth £30bn being agreed.
This comes amid commitment by the UK to
build a stronger relationship and closer
economic ties with China, now becoming its
largest European partner. The main deals
include investment in nuclear energy, oil,
electric buses and education. The single
largest, and most controversial, is China’s £6bn
investment into a new nuclear power plant, an
unprecedented deal giving China a 33% stake,
which has provoked concerns regarding
national security.
Indeed, the UK’s closer partnership with China
has drawn criticism both domestically and
internationally. Cameron has been accused of
putting China’s human rights issues aside in
order to secure billions of pounds of investment.
China has also been accused of dumping steel
on global markets, meaning selling it at
uneconomic prices, which has caused a
collapse of global steel prices. This has led to
thousands of job losses for the UK steel
industry. On the other hand the UK recognises
China’s importance as a growing economic
superpower, and how it could beneficial, so aim
to capitalise on this by securing a long term
economic partnership. Meanwhile unemployment has fallen to a 7 year
low to 5.4%, providing a confident outlook on
the UK economy despite the global economic
slowdown. In particular the outlook for the
graduate job market is promising, with a study
of 100 leading employers showing that
graduate vacancies will rise 8.1% this year to its
highest level in 10 years. An official survey of
graduates last summer showed that 76.6% had
found jobs, suggesting that the economic
recovery has finally reached young people. In
addition, retail sales this September surged to
a 2 year high, being boosted by falling shop
prices and rising real wages. This should allay
fears of a slowdown in the third quarter and
provide a further boost to consumption led
growth, the main driver of the UK economy. The
graph below shows how retail sales have grown
in recent years.
The Bank of England (BoE) has come out in
support of Britain remaining within a reformed
EU, after a speech by Mark Carney. This
follows the release of a preliminary report by the
BoE on Britain’s EU membership, in which it
states that overall Britain is a “leading
beneficiary” of Europe. However Mark Carney’s
intervention into a political debate has been
criticised since the BoE has a role to remain
independent of politics.
Matteo Graziosi
Week Ending 25th October 2015
5
United States
There were two key data releases concerning
the housing market this week, along with
weekly data on first-time filing for
unemployment insurance.
Building permits data from the Census Bureau
showed that permits for new construction
declined month on month by 5% to an
annualised 1.1 million, falling short of a forecast
of 1.16 million. Permits for new construction
typically give an indication of future demand.
However, economists warn not to read too
much into the data due to substantial revisions
in the future. The National Association of
Realtors released data showing that existing
home sales beat forecasts of 5.38 million to
reach an annualised 5.55 million for the month
of September, a 4.7% improvement on last
month’s figures. Conversely, the share of first-
time homebuyers fell from 32% in August to
29% in September. New buyers are crucial with
regards to the long-term health of the housing
market as it represents new demand rather
than trading in the property market.
Elsewhere, in a report from the Labour
Department, initial claims for state jobless
benefits increased by 3,000 to a seasonally
adjusted 259,000 for the week ending 17th
October. This was lower than the forecast of
266,000 and is hovering around 42-year lows.
The labour market is approaching full capacity
with the last reported unemployment rate
standing at 5.1%, similar to levels seen back in
early 2008.
This week’s robust labour and housing data
demonstrates strong domestic fundamentals in
the US economy. A firming housing market and
lower unemployment levels are boosting
household wealth, driving economic growth
through consumer expenditure. It can be
argued that the recent growth in strength of the
dollar has mimicked a rate rise and with global
growth for 2015 at approximately 2.6% (the
long-run norm is 3%), tightening monetary
policy too early could hinder the US economic
recovery. 65% of economists surveyed by the
FT predict a rate rise at the end of this year and
85% expect a second increase by June 2016.
The FOMC will make a statement about
monetary policy next week and this will
hopefully give us a better idea of the timing of a
rate rise. Next week’s data on consumer
confidence and advance quarter on quarter
GDP should help too.
Sai Ming Liew
NEFS Market Wrap-Up
6
Eurozone
Consumer confidence within the Eurozone,
which calculates the level of optimism
consumers have towards the economy, has
fallen by 0.6 points from -7.1 in September 2015
to -7.7 in October 2015, as measured by the
Consumer Economic Sentiment Indicator. As
you can see on the diagram below, which
shows consumer confidence in the Eurozone
between January and October 2015, the
indicator has reached its lowest level since
January this year.
However, when comparing these figures to
2009, when the value fell to record lows of -
34.30, it is clear that consumer confidence is
much less weak now than it was during the
financial crisis. When taken in this light, the
implications of this month’s figures may not be
too serious for the 19 countries within the
Eurozone.
Consumers situated in the Euro area have had
the benefit of low inflation rates during 2015.
Inflation in the Eurozone was -0.1 per cent in
September 2015, as measured by the
Harmonised Index of Consumer Price (HICP),
taking a negative value for the first time in six
months. A large proportion of the decline in
inflation was due to the decrease in the price of
fuel and oil, which fell by 0.71%. As inflation
decreases, consumers are more likely to
increase their spending as prices are lower.
Therefore the significance of a small decline in
consumer confidence in the Eurozone is
somewhat diminished.
The European economist at Capital Economics,
Jack Allen has said “Looking ahead, economic
conditions are broadly supportive of consumer
confidence. The EC index measures
consumers’ optimism about their own financial
and employment prospects, as well as the
wider economic outlook, over the next twelve
months. The slow but steady labour market
recovery, along with low inflation, should
support households’ real spending power. And
low interest rates on household borrowing are
likely to persist, keeping debt service costs
down”. As such, even though consumer
confidence has fallen in the last month, the long
term prospects of consumer optimism and
spending is looking somewhat more positive.
Elsewhere, there was positive news to come
out of the Spanish economy this week, with the
release of unemployment data on Thursday;
unemployment has fallen sharply from 22.4% to
21.2% there, beating forecasts of 21.9%, and is
now at its lowest level since 2011. The fall
further hints at some degree of underlying
strength within the Eurozone economy as a
whole.
Kelly Wiles
Week Ending 25th October 2015
7
Japan
Trade figures released by the Ministry of
Finance show that Japan’s annual export
growth fell to just 0.6% for September, below
the expected 3.4%. The cause of this slowdown
has been due to the falling sales to a slowing
China has reduced the volume of Japanese
exports. With trade accounting for
approximately 17% of GDP last year this will
have serious implications for growth in the third
quarter, possibly forcing Japan into a technical
recession following a 0.3% contraction in the
previous quarter.
Growth in Japanese manufacturing output was
a welcome shock following the disappointing
export figures, with the latest Flash Purchasing
Managers’ Index (PMI) reading at 52.5. The
PMI is essentially a survey to measure the
health of the manufacturing sector – a reading
above 50 indicates expansion. Released on
Thursday, the Flash PMI is a first estimate of
the final PMI indicator expected next week. The
figure was well above the forecast of 50.5, and
also means that operating conditions in Japan
have improved at their fastest rate in over 18
months. This news shows a marked
improvement in the Japan’s manufacturing
sector and that international demand remains
resilient despite the backdrop of declining
emerging economies.
The Regional Economic Report published by
BoJ paints an equally rosy picture of the
Japanese economy as the pace of economic
improvement in all of the country’s regions
continues to be in “moderate” or “steady”
recovery. However, the trend rate of growth of
almost zero for the last decade, shown by the
black line on the graph below, gives a less
optimistic assessment. This inertia has become
the norm for the nation, and has made it the
poster child for economic stagnation.
Speaking at the end of last week BoJ Governor
Haruhiko Kuroda reiterated that the monetary
policy approach under “Abenomics” is working,
but said the situation will continue to be
monitored closely for any potential shocks.
Dismissing the genuine optimism expressed by
the BoJ thus far, many analysts are still
expecting the Bank to cut their growth and
inflation forecasts at a review meeting at the
end of October. If the inflation and
unemployment figures released next week
continue to be consistent with Japan’s
“moderate” trend, then it would not be
surprising to see mounting pressure for a more
active approach from the Bank in the coming
weeks.
Loy Chen
NEFS Market Wrap-Up
8
Australia & New
Zealand
Westpac, Australia’s second largest bank has
announced an increase in variable mortgage
rates by 0.2 percentage points for home loan
customers. The first such rise in three years
was announced on 14th October and will take
effect on the 20th November. Westpac stated
that such changes were due to the bank “being
forced to hold 50% more capital against
mortgages as a buffer for absorbing losses”, a
regulation created after the financial crash in
2008. Essentially this means an increase in the
cost of doing business for Westpac and
therefore an inevitable increase in prices
(mortgage rates) for consumers.
Consumers took the news with heavy hearts.
The ANZ Roy-Morgan consumer confidence
index has fallen by 2.0% (to 113.3%), indicating
a downward pressure on consumer
expenditure. This index measures the monthly
consumer confidence of households and
examines how this affects their regular
spending. An increase in variable mortgage
rates was bound to create a negative sentiment
among consumers, with less disposable
income and slowing momentum in Australia’s
residential property market, consumers are
simply buying less.
How bad have the effects been? The ‘two boom
property markets’; Sydney and Melbourne
experienced a reduction in auction clearance
rates in the past week. Rates in Sydney fell to
65.1%, the lowest in three years, and to 73% in
Melbourne. The Reserve Bank of Australia
(RBA) said there were “tentative signs of some
slowing in the Sydney and Melbourne housing
markets”. Consumers are more reluctant to
engage in activity in the property market,
despite the large numbers of first time buyers,
and many find that property prices in these
cities are out of their reach.
In other news, CPI in New Zealand was 0.3% in
the September quarter, meeting the Reserve
Bank of New Zealand’s forecast, but lower than
the 0.4% in the June quarter. Despite cheaper
vehicle relicensing fees, the change was
caused by a rise in price of vegetables, which
has created downward pressure on consumer
spending.
However, the annual pace of inflation was
unchanged at 0.4%, slightly ahead of the
Central Bank’s forecast. Annual inflation in New
Zealand hasn’t been within the Central Banks
1-3 percent range for three quarters. As shown
by the graph below, the last time inflation was
within the range was in July 2014. Cheap oil
prices, low interest rates (a base rate of 2.75%)
and a strong Kiwi dollar have all kept consumer
prices down, stalling an increase in inflation
rates.
Meera Jadeja
Week Ending 25th October 2015
9
Canada
Emerging from its first recession in six years,
Canada’s economy has bounced back thanks
to the benefits of a low currency. However, the
mid-term economic outlook remains weak.
The Bank of Canada’s mandate is “to promote
the economic and financial well-being of
Canadians”, and one of the key ways in which
it seeks to achieve this is through the
manipulation of monetary policy. On
Wednesday, the Bank of Canada announced
that its target for the overnight rate of interest,
otherwise known as its key policy interest rate,
would remain unchanged at 0.5%. This comes
as no surprise – the CPI index currently stands
at 1%. This is on the lower boundary of the
Bank of Canada’s symmetrical target of 2%, so
keeping the interest rate low should help to
boost inflation. In spite of this, Stephen Poloz,
the Governor of the Bank of Canada, has stated
that inflation may only reach the 2% target in
mid-2017 due to excess capacity, or slack, in
the economy.
Although GDP has picked up and household
spending is expected to increase, growth is still
expected to remain subdued. Predictions for
the GDP growth rate are 2% next year, and up
to 2.5% in 2017. This ensues as the economy
still struggles to adjust to the new environment
of low commodity prices, driven by the long-
term falls in the oil price. As a result, the
resource industry, business investment, and
moreover the Canadian dollar are being
adversely affected. In an attempt to revive the
economy, the Bank of Canada may decide to
engage in further monetary stimulus by cutting
the interest rate, but in doing so, this deters
overseas investment for fear of low rates of
return. The likelihood of more rate cuts means
the Canadian dollar is down by about 15% over
the past 12 months. The rate fell further as
investors sold the currency following the GDP
predictions in the Bank of Canada’s quarterly
monetary report published this week.
As shown in the chart below, the target for the
overnight rate of interest has already been
lowered twice this year. The next decision by
the Bank of Canada’s Governing Council will be
made on the 2nd of December.
Shamima Manzoor
0
0.25
0.5
0.75
1
1.25
2010 2011 2012 2013 2014 2015
Target for the overnight rate
NEFS Market Wrap-Up
10
EMERGING MARKETS
India
Last week India was once again handed a BBB-
investment rating from global rating agency
Standard & Poor’s, the lowest grade that can be
given. Despite the country’s hope for an
upgrade given recent economic success, S&P
decided to retain this rating, whilst predicting a
‘stable’ outlook for the future. India’s low per
capita income and high government debt are
key barriers to an improvement in the country’s
sovereign rating and in a statement issued last
week, S&P stated that “the outlook indicates
that we do not expect to change our rating on
India this year or the next based on our current
set of forecasts.” Moody’s and Fitch Ratings,
two other global agencies, have also accredited
India with the same. Most recent data for government debt suggests
that it currently stands at 66.1% of GDP - higher
than it was in the previous year. This figure has
been deemed unacceptable, with the agency
making it clear that unless it reaches below 60%
of GDP, India cannot be credited with a higher
rating. Another requirement is that the fiscal
deficit, which is currently 3.9% of GDP, must be
lowered to the target of 3% by 2018. In order to
address both of these issues, S&P have
stressed the importance of generating more
revenue and controlling spending on subsidies
for food, energy and fertilisers, which in 2015
was the equivalent of 2% of GDP.
The government simply does not yield enough
revenue to be able to spend a sizeable amount
on subsidies whilst also implementing new
reforms and lowering net debt. A new goods
and services tax, which is set to be rolled out in
April 2016, would be a significant step in
reforming taxation and shows that India is ready
to employ measures that will eventually redress
its public finances. The ‘GST’ Bill will
amalgamate several Central and State taxes
into one single tax, creating a common national
market and hopefully increasing revenue for the
government.
Low per capita income is also a concern,
estimated at only $1700 in 2015. Measures
such as improving labour market flexibility and
strengthening the business climate in order to
create more employment will help raise income
levels, but realistically this has to be a long term
goal, and the threshold of $5000 issued by the
agency will take a long time to reach.
On a brighter note, S&P expects growth to
average just under 8% from 2015-2018 and the
positive impact of the governments new reform
agenda has been recognised globally, most
recently by the US Treasury which reported that
India has the potential to become a global driver
of growth. However, if India’s outlook really is to
remain ‘stable’ in this fragile economic climate,
there are vast improvements still to be made.
Homairah Ginwalla
Week Ending 25th October 2015
11
China
This week we learned that China’s annual
growth rate slowed to 6.9% in the third quarter
of 2015. While this came in slightly above
expectations, the figure signals the lowest rate
of growth in China since 2009. Growth has
slowed dramatically in 2015, averaging at 7%
this year compared to nearly 9 % in the period
from 2009-2014. Additionally, the ongoing
correction of the Chinese Stock Market may
lead to further slow-down of economic growth
due to its impact on the financial sector.
However, in order to attain higher growth rates
the Chinese government has two options. It
could either boost investment or focus on
increasing private consumption. The Chinese
people have traditionally been keen on saving
money, though, and as such, China’s
investment-to-GDP ratio is one of the highest in
the world. Yet, its savings still exceeded
investments in 2014, and consumption counted
for only 38% of GDP in the same year.
Nonetheless, declining labour force growth and
a recent shift towards less capital-intensive
industries could be seen as indicators for
slower future investment growth.
On August 11 this year, the People’s Bank of
China (PBoC) announced a change in the
setting of the daily reference rate. This shift in
foreign exchange policy led to a depreciation in
the RMB of 2.3% in September. It seems that
the reason for China’s depreciation of the RMB
has come as an attempt to hide the current
underlying problems within the Chinese
economy by boosting export-led growth.
As can be seen in the graph below, the PBOC’s
reference rate has differed little from the daily
close rate since the introduction of the new
settings, hinting that the market has actually
been playing a bigger role in setting the
exchange rate than before, prior to the recent
devaluation. A more flexible approach in
China’s foreign exchange regime is required to
win greater status for the Yuan. However, on
August 19 the IMF said its board has decided
that if it opts later this year to include the RMB
in the “Special Drawing Rights” (SDR) basket,
this will not take effect until September 2016. As
being part of the SDR currency basket would
make the RMB officially a reserve currency, it is
not surprising that the IMF decided to postpone
its inclusion; being a reserve currency requires
open and developed capital and stock markets
which China still lacks.
Alexander Baxmann
NEFS Market Wrap-Up
12
Russia and Eastern
Europe
Russia has dominated news this week, coming
under severe scrutiny as its economy sees a
4.3% contraction in the third quarter. This,
alongside a worsening inflation rate of 15.7%
and a reduction in industrial production,
combined with increased defence spending, all
point towards further woes for Putin’s economy
– although he himself does not concur.
Figures released this week showed a decline in
capital investment of 5.6% and a 3.7%
reduction in industrial production – the latter its
lowest since March. So reliant on industrial
production is Russia that it takes its place as her
second most important economic driver and
consequently represents a real problem for the
Soviet state. In addition, the third quarter
figures (4.3% contraction) only reiterate the
economic worry and assert the relevance of the
Western sanctions, having a knock-on effect on
the already plummeting oil prices, whilst also
disincentivising investment in Russian equities.
Not surprising, then, is the petition for
bankruptcy of Russia’s second biggest airline,
Transaero, filed by Russia’s biggest bank,
Sberbank. While this is being put down to a
“bad business model”, it is clear that the
worsening economic situation has played a
central role.
Inflation, too, is way above its 4% target,
hovering around the 16% mark and is making
its presence known as real incomes have
dropped 9.7% this September and the Ruble
continues to depreciate, contributing to the
10.4% decrease in retail sales as consumers
have their spending power stripped. Rising
prices is also giving birth to a poverty rate climb
up to 15.1%, representing 21.7 million people.
Economic minsters now face a tough decision
between cutting rates now or waiting for signs
of stabilisation – ING Bank advises a mixture of
the two, expecting the Bank of Russia to start
monetary easing next week, cutting its key rate
to 10.5% (50 basis points at each of the coming
policy meetings) by the end of the year.
Despite what seems like a black swan facing
the Russian economy – or “three black swans”
as Sberbank CEO, Herman Gref, says – there
remains some hope. Against all the criticism
and, in particular, a Moody prediction of a fall in
Russian credit-worthiness to 2009 levels, both
Putin and Andrey Kostin (president and
chairman of VTB – Sberbank’s biggest rival)
deny the Western assumption that this is the
end for Russia.
Kostin ensures that this “is not another 2008”,
saying that the economic slump has reached its
bottom and can only improve from here.
Officials claim that the economy is “not in
tatters” and that it is “under control”, predicting
slight growth for early next year. Putin himself
remains confident, seeing the Ruble
depreciation not as a negative, but as a
competitive advantage, telling his people to
“make use of it”.
Tom Dooner
Week Ending 25th October 2015
13
Latin America
On October 15th the Central Bank of Chile
(CBC) rose its benchmark interest rate by 25
basis points (bps) to 3.25% in an attempt to
curb inflation. Whilst policy maker have been
struggling with high consumer prices, analysts
were expecting the bank to leave the key rate
unchanged at 3%, amid sluggish growth.
The annual inflation rate came in a 4.6% in
September 2015, well above the bank's 2 to 4
percent tolerance range. Yet, as shown in the
graph below, annual growth rates have stalled
in recent years, falling from 5.4% in April 2013
to 1.9% this August. Although September’s vote
was 3-1 in favour of holding interest rates at 3%,
this month’s increase in the rate was not entirely
unexpected, with the CBC’s comments in
September signalling that rates may rise soon.
Runaway growth and overheating of the
Chilean economy are not the factors leading to
the bleak inflationary outlook, but some
policymakers point to the current monetary
stimulus programme and the need to cut it in
the short-term. While the asset purchase (QE)
scheme run by the CBC is increasing upside
inflationary to some extent, it is not the only
factor influencing inflation rates.
The wider economy is in a fragile state and
growth is disappointing, see graph below. In the
past 12 months the current account has swung
from a 1202M USD surplus to a forecast deficit
of 693M USD in November. These results
persist despite the fact that the peso has lost 13
percentage points against the dollar over the
last year. This, in theory, should make exports
more desirable and imports more expensive,
hence suggesting a surplus should instead
have been maintained (or increased). But it is
not all doom and gloom for Chile as, although
unemployment is predicted to be up 0.2% next
week, it will still remain strong at 6.7%.
So what lies ahead for Chile’s inflationary
policy? As this initial increase of 0.25% is likely
only to be effective in the medium term. If the
combination of weak economic growth and high
inflation persists, then the CBC and Chilean
government may have to bite the bullet on
either growth or inflation, for a more immediate
remedy. They face the choice of increasing
interest rates further, contracting the already
weak consumer demand, or implementing
aggressive fiscal stimulus, with the inflationary
consequences that would follow. Next month
the signs are pointing towards a further
increase in the benchmark rate, so we could
see rates increase another 25bps.
Max Brewer
NEFS Market Wrap-Up
14
Africa
The greatest shock this week was the news that
Egypt may soon overtake South Africa, to
become the continent’s largest economy.
Despite being plagued by uprisings and
violence in recent years, Egypt’s GDP will reach
$315bn this year, marginally behind the $317bn
economy of South Africa, according to
Renaissance Capital. Last year Egypt slumped
far behind with a GDP of $286bn, a result of low
tourism and foreign investment, and high
energy prices. Even in 2015, Egypt continues to
face a weak currency that has already seen two
devaluations in the past week. Whilst this
should encourage foreign investment and
increase tourism, it has made imports very
expensive and sustained high GDP growth
unlikely.
On Tuesday Chinese Government officials
confirmed their $50bn pledge intended to
industrialise Africa, including the provision of 50
power plant technical experts, 40,000 training
opportunities and 200,000 industrial managers
to train local workers. This will very effectively
enhance the long-term self-sustaining and
independent nature of the African economy.
However it comes amidst a period of great
turbulence for China who has had to reduce
foreign investment by 84% over the past year,
due to its slowing economy, and yet in the same
time period has nearly doubled investment into
African extractive industries (from $141.4m to
$288.9m). This has incited old accusations of
China trying to gain control of Africa’s
undiscovered natural resources. Further
criticism is that the pledge may inevitably
become too focused on South African
development, whilst other African economies
are left behind.
A big topic of contention this week has been the
proposed 11% university tuition fee increases in
South Africa, which has consequently provoked
widespread protests across the country. A fee
cap of 6%, as suggested by the Higher
Education Minister Blade Nzimande, has also
been rejected. Whilst budget cuts have made
the fee increases necessary, in order to
continue developing other important economic
sectors, affordable and readily available higher
education is of primary importance to the long-
term, sustainable development of the continent.
Johan Fourie, an economics professor at
Stellenbosch University, predicts that 95% of
South Africans already can’t afford the current
university fees. Whilst higher fees will reduce
pressure on the South African government, it
will also widen the poverty gap and greatly slow
down growth in the services sector.
Charlotte Alder
Week Ending 25th October 2015
15
South East Asia
Optimism will inevitably have increased for the
citizens of Singapore as it has been revealed
that their economy grew in the third quarter of
this year, and thus avoided recession, which
refers to two consecutive quarters of negative
economic growth. Released on Wednesday last
week, gross domestic product growth for this
quarter at 0.1% is shown in the graph below.
This is a significant boost for Singapore as
growth for the previous quarter was -2.5%, a
major low since the global recession.
The Monetary Authority of Singapore stated in
its Semi-Annual policy statement that it would
slightly reduce the value of the Singapore dollar
against the currency of nation’s main trading
partners, in an effort to revive economic growth.
This is expected to support output, as a
depreciation in the Singapore dollar will lead to
an increase in exports, as the price of
Singapore’s exports become cheaper, making
them more attractive to Singapore’s main
trading partners - Malaysia, China and the US.
It is hoped that the increase in exports will
benefit Singapore by creating growth and more
jobs, particularly in the manufacturing sector,
which contracted 6 percent in the third quarter.
Moreover, an increase in economic growth will
lead to an increase in inflation with more
individuals spending on consumer goods. This
would not necessarily be a good outcome in
normal circumstances, however with
Singapore’s inflation rate at -0.8%, it would
reduce uncertainty and inflation would be
welcomed with open arms.
There is certainly a reason for Singapore to be
optimistic as growth for the first quarter in 2016
is estimated at 3.48% and by 2020, inflation is
expected to be at a more desirable rate at 2.21
percent, according to Trading Economics. But
how realistic are these predicted figures? With
globalisation more present than ever before
and Singapore being so reliant on foreign trade,
activity in other countries must be considered.
Singapore’s second largest trading partner is
China, which has had a staggering annual GDP
growth rate in recent years, exceeding 10% in
some cases. However, many are predicting that
by 2020 this figure will have more than halved
to around 5%. China’s rapid growth interferes
with their goal of reducing carbon emissions
and becoming greener as a country. With
China’s growth slowing and their manufacturing
sector declining, it will have a knock-on effect.
Countries in South East Asia such as
Singapore will lose the economic benefits of a
world leader in China. So will Singapore grow
as expected? Only time will tell.
Alex Lam
NEFS Market Wrap-Up
16
EQUITIES
Retail
Walmart’s recent share price drop, despite
being driven by a plethora of factors and
conditions almost unique to the venerable
retailer, has resulted in a sizeable knock-on
effect for a number of large retailers, who have
seen largely negative changes in share price
and, by extension, company valuation.
Walmart, in a conference for investors around a
week ago, announced that it not only expects
sales growth to be decidedly below analysts’
predictions, at around 3%, but that it shall
expect to raise operating costs significantly,
adding $1.2 billion through various initiatives
and structural problems within the company,
such as a wage hike and investment in
employee training schemes.
The market, as aforementioned, reacted badly
to the news, with the nature of Walmart’s
business without doubt contributing to the
largest one day drop in the retailers’ share price
since April 2000, shedding more than 10% by
the close of trading. Walmart is a company
renowned for paying increasing dividends to
their investors, a condition which, by its very
nature, precludes a protracted period of falling
profits. As such, increasing costs and low sales
growth, resulting in predicted earnings per
share of 6-12 cents less, will no doubt have
rattled large institutional investors, prompting a
sell-off of a vast number of retail equities.
Whilst retail equities were particularly affected
by the Walmart news, with the S&P consumer-
staples index falling by 1.1%. The ramifications
of the Walmart sell-off were widespread and
pronounced, coming at a particularly
precipitous time for consumer stocks, given that
investors had already been rattled by weak
predictions of only a 0.1 % increase in
consumer spending, amidst a backdrop of
upwards pressure on wages.
Indeed, the consumer sector as a whole has
been hit by lowered commodity prices not
translating into sales growth, as well as
continued concerns on China and the
sustainability both of its growth and price of
exports. These factors, despite the large fall in
retail equity prices, will no doubt have
institutional investors questioning whether or
not the fall in retail equity prices were a
necessary correction to a fundamentally
struggling market.
Jack Blake
Week Ending 25th October 2015
17
Financials
The financial industry news this week has been
dominated by the conference call given by the
ECB president, Mr Mario Draghi, with the
pleasing news that there may be further
quantitative easing in the new year. This
caused a positive response in the markets on
Friday with the FTSE Eurofirst 300 climbing 4%
in less than 24 hours after the announcement.
Across the pond, the financial sector
experienced broad gains, with the NYSE
Financial Index up by 2.0% for the week.
Thanks heavily due to commercial lender, CIT
Group’s share price climbing almost 15% to
$45.50 following an announcement that it will
explore strategic alternatives for its $10 billion
commercial air business.
There was further good news for the retail
banking industry as regulators suggested an
end to the wave of regulations which have hit
the market since the crisis of 2008. On
Wednesday the FCA announced the
regulations heaped on the City of London would
be substantially reduced. Tracey McDermott,
the Chief Executive of the FCA, said many
boards were only focused on compliance with
regulations, such as the launch of Williams and
Glynn by RBS, or HSBC moving their UK retail
headquarters to Birmingham. This reduces
innovation in the market and has been
detrimental to industry growth, while also
creating barriers to entry for challenger banks
such as Virgin Money. On top of this, the
Competition and Markets Authority also
produced a 34-page paper on Wednesday
indicating there would be no end to free-
banking. This spelt good news for retail banks
such as Santander (BNC), who has seen its
share price increase 3% since mid-week.
Although RBS, HSBC and Barclays saw a fall in
their share prices on Wednesday due to
regulatory fines from the US Federal Court,
prices managed to recover by the end of the
week.
Elsewhere in the markets, Swiss-based
insurers ACE Limited (ACE) announced on
Wednesday an increase in its operating income
of 0.8% in Q3 to $897m while its take-over
target Chubb Corporation reported an increase
of 4.8% taking operating income to $547m. This
caused the share price of ACE to rise 5.35%
during the week as the merger sets it to become
one of the world’s biggest insurance
companies. With such great prospects, I expect
the company is undervalued by the market
suggesting the share price may grow in the
future months.
Sam Ewing
NEFS Market Wrap-Up
18
Pharmaceuticals
Since August pharmaceutical companies have
come under fire for excessive profiteering by
gauging drug prices. Pharmaceutical stocks
can be great investments because companies
are protected by patents which allow them to
recoup their research and development.
Biotech and pharmaceutical stocks have
surged recently, backed by new discoveries
and acquisitions. However, these rises have
been backed by the idea that companies can
achieve premium prices in the US. Growing
uncertainly is clearly gaining on investors who
are fearful that premium prices will not be
sustained in the US, as the NASDAQ
Biotechnology Index has fallen 13% since
August 17th, as shown in the graph below.
Most notable outcries relate to Turing
Pharmaceuticals, a company founded in
February by Martin Shkreli, a young yet
experienced hedge fund manager within the
sector. Last month, with $55 Million of their $90
million venture capital, the company obtained
licenses to pyrimethamine, a drug used to treat
multiple life threatening parasitic diseases.
Branded under the name Daraprim, it is most
commonly used to treat patients infected with
HIV. Although the patent for this drug has long
expired, no other company in the US has been
able to manufacture it, and Turing
Pharmaceuticals ensured strict distribution
controls before the purchase to ensure its
niche. Practically overnight, Turing
pharmaceuticals jacked up the price of the drug
by over 5,455% from $13.5 to $750 per pill.
Like other price-gauging cases, Mr Shkreli
attempted to justify this rise by claiming that it is
needed in order to fund additional research and
development to lessen the drug’s side effects,
but this excuse is not being bought. It is likely
that this rise will have a larger effect on
insurance companies than patients, who will not
pay for the pill themselves. Even so,
presidential candidates such as Hilary Clinton,
are campaigning for greater accountability on
drug prices and politicians including Bernie
Sanders put the company into an on-going
congressional investigation. Additional public
pressure eventually forced Mr Shkreli to
promise a price drop, despite his previous
reluctance to change price.
Just today it has been announced that San
Diego-based competitor Imprimis
Pharmaceuticals Inc. has been able to make a
mix of approved compounded drug ingredients
to compete with Daraprim for $0.99 per
capsule. Spiking a 17% rise in its stock, it's an
encouraging action for an industry which is
being continually exploitative.
Sam Hillman
NASDAQ Biotechnology Index
Week Ending 25th October 2015
19
Oil & Gas
An agreement for BP to sell liquefied natural
gas to China Huadian Corporation was one of
the many Sino-British trade deals crowned
with the arrival of President Xi Jinping to
Britain on Wednesday night. The deal is worth
£6.5 billion: an impressive amount, though the
figure will only be achieved over a period of
two decades. After the agreement was signed,
BP PLC (LSE) share value has been rising
since Wednesday to $35.92, an increase of
2.5%.
In other energy news, on Thursday the EIA
reported that US supplies of natural gas rose
81 billion cubic feet for the week ending Oct.
18. That was less than the forecast of analysts
polled by Platts for a climb of between 86
billion and 90 billion cubic feet. Natural Gas
(NYMEX) initially held on to earlier gains in the
wake of the data, before losing ground. It
settled 1.8 cents, or 0.8%, lower at $2.386 per
million British thermal units.
The future is also looking a little less dire for
oil, as it rebounded slightly on Thursday to
settle with a modest gain as investors hunted
for bargains after prices recently fell near a
three-week low. Crude Oil (NYMEX) closed 18
cents higher on Thursday, or 0.4%, to settle at
$45.38 a barrel, while Brent Crude (ICE EU)
also rose 23 cents, or 0.5%, to $48.08 a barrel.
Buying interest for oil returned after some
recent declines, but the “rally is stalling amid a
weaker euro due to talk of further stimulus in
the eurozone,” according to Matthew Smith,
commodity analyst at ClipperData. The Dow
Jones Oil & Gas Index (as can be seen below)
also highlights a precarious situation for the
sector, with a modest rise in the index since
the beginning of October.
It remains to be said however, that due to the
persistent fall in the price of oil, around 5500
people directly employed in the oil industry
have lost their jobs since last year – around
15% of the total workforce, according to Oil &
Gas UK. Even after the temporary uplift, oil
price could stay lower for many more months.
As the industry adapts to these expectations, a
predicted 10000 further jobs will be lost from
the sector. The Standard & Poor’s 500 energy
sector’s index also reflected these
expectations, as third-quarter earnings per
share are forecast to show a 66% decline year
on year.
Andrea Di Francia
NEFS Market Wrap-Up
20
Industrials & Basic
Materials
The Industrials & Basic Materials sector has
faltered in the past year, losing 10.8% of its
market share, and within the 10 sub-divisions of
the sector, only a meagre three had a positive
return over the year. The Mining and Metals
industry has lost over 34% in the past year and
the outlook does not appear poised to improve
anytime soon.
The Chinese, long one of the biggest buyers of
mined commodities, are awash in steel, local
debt and a hard landing on its economy, and
with neither India nor Brazil ready yet to assume
the mantle of emerging market growth engine,
this leaves the mining industry with major
issues. There is also considerable and
increasing pressure on the coal industry due
both to the decline in oil prices and the
increasing concerns over the environment.
Putting all these together, it is no surprise that
mining companies are the worst performers of
late.
Glencore is a Switzerland-based natural
resource company and are listed on the Basic
Materials sector within the United Kingdom
Main Market. The Company has operations in
the Americas, Asia, Europe, Africa and
Oceania, and its portfolio of diversified
industrial assets consists over 150 mining and
metallurgical facilities, offshore oil production
facilities, farms and agricultural facilities.
Despite both size and market positioning, the
company is going through a very rough patch
and has lost over 65% of its share price since
June, which has experienced a much greater
drop than the FTSE 100 index as a whole, as
shown in the graph below. This has largely
been due to the sharp fall in commodity prices,
a supply glut from overproduction in the market
and investor concerns over its highly leveraged
balance sheet.
Glencore succumbed to shareholder pressure
and announced plans to reduce its debt to $20
billion and also to raise cash through streaming
deals, asset sales and other moves which could
potentially cut more than $12 billion of its debt.
The measures announced by Glencore
represent a positive step towards strengthening
its balance sheet and this is necessary in the
current commodity price environment
Is the worst over for Glencore? I am inclined to
think so, and their lack of exposure to iron ore
is favourable. Volume growth for its brownfield
projects will also provide much needed support
in a weak commodity price environment.
Erwin Low
Week Ending 25th October 2015
21
Technology
This week US technology stocks strongly
outperformed the US stock market as a whole,
leading the overall market higher. The
NASDAQ 100, the American/Canadian stock
exchange, depicts largest gains over the last
week for the tech-giants in particular. Apple’s
share price rose 4% from $110.71 to $115.47,
whilst Intel Corporation saw a rise to $34.40
from $32.76. Not all seemed constructive for
the tech market though, with Google stocks
falling down to $651.79 from $664.36, but only
a seemingly minor plummet for the huge
corporation.
Microsoft maintain their high stance in the
technology market, with a 2% rise in share
values over the past week, settling on $48.03.
This continues what has been a compelling
cycle of sudden rises and falls over the past
year, with shares being an annual low of $40.40
in January. Their now recuperating
performance reflects the prosperous release of
their Windows 10 update earlier this year, which
has been a hit with consumers, implementing
intuitive features that further enhance the user’s
experience. Whilst the update had experienced
some bugs in the software over the summer,
which were reflected by the drops in the firm’s
share prices over the past months, it clearly
hasn’t had too much of an effect on Microsoft’s
performance, with them quickly regaining
ground upon every shortfall.
In other news, Micron Technology, a prevalent
producer of semiconductor devices, still dwells
within what has been a disappointing year for
the multinational corporation, with share prices
still falling, currently valued at $16.72 – an 11%
drop compared to last week with shares running
at $18.74. This is a huge contrast to last year’s
performance, where stock prices were valued
at an all-time high of $36.49 towards the end of
December. With forecasts expecting this
pattern to continue throughout the final quarter
of the year, this gradual decline in share price
could cause a loss of investors for the American
company if not challenged.
For this reason, it comes as a potential relief for
shareholders to hear that Micron might be in
talks to buy the American company, SanDisk –
the third largest global manufacturer of flash
memory. This would provide significant gains
due to the company’s technology and portfolio
leadership in the flash semiconductor and
enterprise flash systems market, perhaps
sparking a recovery in performance from
Micron, seeing them progress back onto the
successive path set up over the past years.
Daniel Land
NEFS Market Wrap-Up
22
COMMODITIES
Energy
Energy commodity prices faced persistent falls
in the past week, data has shown. As shown in
the graph below, the price of crude oil fell
sharply this week, reaching a six-year low,
while only ethanol out of the energy
commodities has seen any increase in price,
rising 0.9%. This signifies that the production
war between OPEC and “fracking” producers is
still yet intensifying.
Of course, energy prices have been steadily
falling for a year now, ever since it became clear
that OPEC nations were attempting to drive out
firms employing the recent fracking technique.
As OPEC nations are still able to make a profit
for lower oil prices than fracking producers, they
hope that by constantly lowering the oil price,
they will reduce the profitability of fracking. As a
result, this would allow OPEC to continue to
dominate the market, allowing them to collude,
raising prices (and profits) together.
So how does this continued price drop affect
everyone? For those living in net oil importing
nations, the price drop has meant that
consumers have had to spend less at the petrol
pumps and on many other goods. The price
drop has caused inflation to be very low in many
economies, such as the UK, whose inflation
rate fell to -0.1% earlier this month (13th Oct.).
This is due to the fact that oil is a key factor of
production in the production in a wide array of
goods, and thus the lowering of costs has
allowed firms to also lower the price of the final
good to the consumer. Many governments
burdened with heavy gasoline subsidies have
also greatly benefited; a lower price of oil has
greatly increased the opportunity cost of these
subsides, and as a result administrations
around the globe now can shift funds to other
more imperative projects and developments.
However, it is not all good news. The drop in
price has greatly affected all net exporting oil
nations, and caused many job losses in all of
the large oil firms; yesterday a key economic
journalist at Forbes grandly stated that “the
collapse in oil prices has so far claimed more
than 200,000 jobs worldwide”. Unless things
drastically change, 2016 will be a year of more
layoffs and asset sales if Crude Oil continues to
descend into pre-21st century levels.
Harry Butterworth
Week Ending 25th October 2015
23
Precious Metals
The uncertainty and expectations of a rate hike
and weakening US Dollar has caused a surge
in gold prices since early August. However in
the last week, we have seen the shiny metal fall
from 1187.90 to 1175.69 in USD per ounce as
of 20th October 2015, the largest drop for three
months, as signs of a comeback for the US
economy is imminent. Analysts believe to have
attributed this to the recent jobless claims in US,
low inflation rate and higher consumer
sentiment.
Jobless claims in the US have fallen 0.2% from
262,000 to 255,000, the lowest level in the last
40 years. Consumer sentiment has also risen
from 87.2 in September to 92.1, outperforming
economists’ expectations. Stronger economic
data released would prompt investors to
speculate the possibility of a sooner interest
rate hike, although reports have shown that it is
unlikely that it will happen anytime this year.
Higher interest rates would lead to a lower claim
for gold as it would not generate interest as
compared to other asset classes. Historically,
gold has always been seen as a reserve during
economic uncertainty, and its prices have been
co-related to the inflation rate. The inflation rate
has fallen for two straight months since July,
and based on the chart below and past trends,
the price of gold has fallen whenever inflation
rates falls.
South African labour wages and working
conditions for gold miners have resulted in
unrest, and the industry is in dire need of a
restructure. Newcrest Mining Ltd, Australia’s
largest gold producer has also seen output
falling by 13% due to a halt in operations at two
mines following the reported death of workers.
Given these potential decreases in the output of
gold, it is likely that gold prices would bounce
back towards an upward trend.
However, given the slowing down of China’s
growth, the uncertainty of the Fed’s rate hike
and the shakiness of the economy of Europe,
investors will turn to gold in times of financial
uncertainty and gold prices should start to see
a rally as the end of the year comes.
In other news, the price of palladium, which is
used in catalytic converters to filter exhaust
fumes from gasoline cars has increased by
19.5% from USD579.4 to USD692.4 since
Volkswagen rigged diesel vehicles to bypass
emissions tests in September. Platinum prices
have climbed 3.5% from USD984.3 in the last
week to reach USD1019.94 as of 20th October.
Samuel Tan
US 10 year break even rate measures inflation
NEFS Market Wrap-Up
24
Agriculturals
Over the last month the trends in corn and
coffee prices - representing grains and softs
respectively – captured the attention of many,
and still leave predictions for the coming days
difficult to forecast.
Corn prices have declined significantly since 6th
October, before which price rates had steadily
increased to $398.25/bu. But by 19th October
this value had fallen to $373.00/bu, its lowest
level since June 2014. This rapid depreciation
caused concerns for producers but, if the trend
remains stable, the reduced price may result in
other industries benefiting, such as livestock
(~35% of the corn grown consumed), as a result
of the number of animals that are fed by this
crop.
The industry continues to grow and expand
worldwide, in order to satisfy global population
growth and for the increasing production of
ethanol (~40% of the corn grown). Alongside
this, a bumper corn harvest this year boosted
supply, whilst a decrease in demand has driven
down prices of the commodity. However, the
22nd October showed a significant increase in
the price of corn by $9.25/bu compared with the
19th October, leaving a more positive prediction
that the industry can avoid more significant
losses.
Similarly, the monetary value of coffee has
been steadily declining since October 2014
(when it was $220.40/lb). The 23rd October
reflects a significant decrease to $119.70/lb, as
shown in the graph below. On 15th October the
price was still $133.70/lb with the commodity
depreciating by 6.17% by the next day. Better
than expected rainfall levels have aided the
growth of coffee, leading to similar supply side
expansion as in the market for corn – again, the
rise in supply was significant enough to
overshoot today’s demand, leading to
downward pressure on prices.
With the production of both crops being heavily
dependent on the weather, it remains to be
seen how the price of the two commodities will
fluctuate in the future – but if conditions remain
favourable, then we could see falls in the price
of both of these goods.
Goda Paulauskaite
Key Corn
Coffee
Week Ending 25th October 2015
25
CURRENCIES
Major Currencies
EUR/USD
Whilst the pair initially traded flat, on Thursday
the Euro took a huge hit against the dollar after
the European Central Bank (ECB) signalled
that it would consider extending its quantitative
easing programme into 2016 and beyond,
whilst also announcing a further 20 bps cut in
the deposit rate to -40bps by December.
Investors were primed to take confidence from
the announcement, and in the day after the
announcement the FTSE Eurofirst 300 climbed
4%. Draghi appears to regard the exchange
rate as the most effective tool to influence
inflation, as a stronger euro constitutes a risk to
growth.
However, the main surprise was the back-
tracking of a previous policy pledge not to cut
the deposit rate; this raises questions as to
whether QE will be enough on its own, and I
believe this is the main force driving investors
away from the Euro. Whilst it did make some
headway in early trading on Friday, it has since
slumped further and is now at its lowest level
since August 10th. With the pair now trading
dangerously close to parity, we could now see
the euro trading 1:1 with the dollar in the run up
to years end. Next week sees the next FOMC
meeting announcement, and the release of US
GDP figures, so there is certainly room for more
downward pressure on the Euro. In Friday’s
trading, investors appeared to be consistently
shorting peaks; I believe the pair will continue
to fall next week, but may meet some strong
resistance around parity. If broken, I would
expect the euro to fall sharply, as this would be
a significant event in the pair’s history.
Recommendation:
Short EUR/USD, stop loss ~ 1.115
GBP/USD
With a 1.55 resistance dating back to August
only temporarily being broken during mid-
September, the pair continues to range down to
1.52. The pound managed to gain ground on
Thursday after better than expected retail sales
(Actual +1.9% vs Forecast +0.3%). This helped
to erode most of the dollar gains of the previous
week, with the pair finishing up at ~1.53 on
Friday. Whilst this week has been quiet and
there have been limited trading opportunities,
next week sees a flurry of announcements for
both countries, and there will certainly be
increased volatility. On Tuesday morning, the
UK releases preliminary Q3 GDP results. Later
that day the US consumer confidence is
announced, whilst Wednesday sees the Fed’s
interest rate decision and Thursday sees US
GDP released. Next week will give the market
a much better idea of where these currencies
may be heading in the coming weeks.
Adam Nelson
NEFS Market Wrap-Up
26
Minor Currencies
The Canadian dollar began this week’s trading
against the US dollar within a similar price
range to last week. The USD/CAD pair met
strong resistance when reaching the 1.305 level
and found support just above a price of 1.290.
This range was only broken once on the
previous week due to the announcement of US
CPI but quickly returned to above the 1.290
level of support.
During this week however, CAD was
considerably weakened against the dollar
because of the Bank of Canada’s Monetary
Policy Report on Wednesday October 21st. The
report stated that the bank would continue to
keep overnight interest rates at 0.5% after
cutting the rate twice previously this year.
Fundamentally this means there is lower
demand for the Canadian Dollar, as fewer
people want to buy Canadian bonds because
they yield a relatively lower return. The bank
also downgraded its forecasts for growth in the
coming 2 years because the “complex
readjustments” needed for the resource sector
to adapt to the low oil price were taking longer
than expected. News of the report caused
USD/CAD to break through its previous
resistance level of 1.305 finding new resistance
at 1.315, as shown on the graph below.
Mid-day in Friday’s trading the Canadian
Consumer Price Index (CPI) was released.
Prices fell 0.2% when they had been forecasted
to rise 0.1%. This highlighted further frailties in
the Canadian economy, as falling prices
lengthen the odds of an increase in interest
rates in the near future. CAD fell further in
trading causing the USD/CAD pair to quickly
break through its new resistance level.
Over the coming week, we can expect
USD/CAD to trade within a higher range where
the 1.315 level will become the main support
price. In previous weeks the level of 1.330 has
been highly significant and so I am expecting
resistance around this area.
Across other minor currencies, the Australian
Dollar had a quiet week with no major news.
AUS/USD was trading within a clearly defined
range between 0.720 and 0.730. Japanese Yen
had a poor week against the dollar but this was
mainly corrective after a couple of overly strong
weeks post the US non-farm payroll report. On
top of this, US retail sales were better than
forecast which also caused the Yen to decline
comparatively. Overall, USD/JPY rose from
around 119.5 at the beginning of the week to
pass the 121.0 point by Friday.
Will Norcliffe-Brown
USD/CAD 1 hour candlestick (Source: OANDA)
Week Ending 25th October 2015
27
About the Research Division The Research Division was formed in early 2011 and is a part of the Nottingham Economics and Finance Society (NEFS, formerly known as NFS and UNIS). It consists of teams of analysts closely monitoring particular markets and providing insights into their developments, digested in our NEFS Weekly Market Wrap-Up. The goal of the division is both the development of the analysts’ writing skills and market knowledge, as well as providing NEFS members with quality analysis, keeping them up to date with the most important financial news. We would appreciate any feedback you may have as we strive to grow the quality and usefulness of weekly market wrap-ups.
For any queries, please contact Josh Martin at [email protected]. Sincerely Yours, Josh Martin, Director of the Nottingham Economics & Finance Society Research Division
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About the Research Division The Research Division was formed in early 2011 and is a part of the Nottingham Economics and Finance Society (NEFS, formerly known as NFS and UNIS). It consists of teams of analysts closely monitoring particular markets and providing insights into their developments, digested in our NEFS Weekly Market Wrap-Up. The goal of the division is both the development of the analysts’ writing skills and market knowledge, as well as providing NEFS members with quality analysis, keeping them up to date with the most important financial news. We would appreciate any feedback you may have as we strive to grow the quality and usefulness of weekly market wrap-ups. For any queries, please contact Jack Millar at [email protected] Sincerely Yours, Jack Millar, Director of the Nottingham Economics & Finance Society Research Division