KBC Market Research Desk
KBC Bank
European equity markets started the week on a weak footing but M&A talk in the brewery sector helped erasing early losses. US equities trade marginally lower. US eco figures were mixed but ahead of the Fed cautiousness is warranted.
The OECD slashed its growth forecasts for major developed economies, expecting the euro zone to grow only 0.8% this year, while it sees the US economy growing only 2.1%. The OECD urged more aggressive stimulus from the ECB and called on the central bank to launch a programme of large scale asset purchases, including government bonds.
French President Hollande called for united international action to tackle the threat from Islamic State militants at a meeting in Paris where 30 countries agreed to provide Bagdad with appropriate military aid to combat insurgents of IS. ,
The first report on the manufacturing sector for the month of September, the empire state manufacturing, painted a picture of vibrant output, bolstered by strengthening in new orders and shipment. US industrial production for August on the other hand, unexpectedly declined for the first time in seven months as automobile making cooled.
Alibaba plans to increase the size of its U.S. initial public offering because of "overwhelming" investor demand, people familiar with the deal said. Alibaba could set a new record for the world's biggest IPO if underwriters exercise an option to sell additional shares to meet demand, pushing it as high as $24.3 billion and overtaking Agricultural Bank of China $22.1 billion listing in 2010.
This non-exhaustive information is based on short-term forecasts for expected developments on the financial markets. KBC Bank cannot guarantee that these forecasts will materialize and cannot be held liable in any way for direct or consequential loss arising from any use of this document or its content. The document is not intended as personalized investment advice and does not constitute a recommendation to buy, sell or hold investments described herein. Although information has been obtained from and is based upon sources KBC believes to be reliable, KBC does not guarantee the accuracy of this information, which may be incomplete or condensed. All opinions and estimates constitute a KBC judgment as of the data of the report and are subject to change without notice.
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EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
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