Week 44: Pre-Election Volatility, Brexit, Interest Rates

Posted on Posted in Weekly Recap

Politics            

The FBI has once again acquitted Hilary Clinton after having rebooted its investigation in the ex-Secretary of State’s use of a private email server. The Bureau’s director, James Comey, faced strong criticism for being vague about the new probe.

The dollar index rose by 0.7% and US equities jumped 2.2% on the last days of the divisive campaign as investors grew more confident of a Hillary Clinton victory. The S&P500 was on a 9-days losing streak; the longest since 1980.

The opposition and Venezuela’s leftist government have begun Vatican mediated talks. Tensions between the two sides had increased after the government had blocked a referendum to recall the president, Nicolas Maduro. The negotiations will cover issues surrounding the restauration of law, human rights, elections and the economic crisis.

Cho Soon-sil, the South Korean woman accused of exploiting her friendship with the president to raise money for foundations she controlled and for meddling with government affairs, has been detained by prosecutors. Mrs Park appointed a new prime minister, dismissed 10 close aides and reshuffled her cabinet in response to the scandal.

The British High Court has ruled that the government does not have the right to invoke article 50 without the approval of Parliament. The verdict is a setback for Theresa May and the government but she has said she will appeal. The pound rose following the news.

Egypt has announced that it will float its currency. The series of reforms announced by the Central Bank is designed to help secure a $12 billion bail-out from the IMF. The Egyptian Pound had been trading well below its official value on the black market.

 

Business         

The Japanese Central Bank has announced that it would push up the date it expects to meet its inflation target. The 2% target is now expected to be reached by March 2019. The bold monetary easing policy introduced in 2013 has proved only a limited success.

America’s Central Bank has kept its interest rate unchanged despite reporting GDP growth in the 3rd quarter had outpaced last year’s growth by 2.9%. The Fed has implied that a December rise is now likely.

The CETA agreement, which aims to remove nearly all tariffs between the EU and Canada, has now been signed by both partners. The agreement was previously blocked by the Belgian region of Wallonia but dropped its opposition after being given assurances on labour and environmental standards.

Royal Dutch Shell has reported an increase in underlying profits by 18% to $2.79bn in the third quarter compared with the same period last year. BP has reported that its profits has halved to $933m over the same period. Oil prices remain stubborn at $47 a barrel.

Facebook has announced that its quarterly revenue had jumped by 56% compared to the previous year. The firm now controls more than 13% of worldwide digital media advertisement, second only to Google.

The turmoil at India’s largest conglomerate continues as 3 executives of Tata Group have resigned following the sacking of the Group’s chairman, Cyrus Mistry.