KBC Market Research Desk
KBC Bank
European shares trade around 2% higher on the back of a huge, unexpected monetary easing offensive by the Bank of Japan. US stocks profit as well with gains of 1% and the S&P back below the 2000 level, closing in on the 2019 record high.
Minneapolis Fed Kocherlakota, who dissented at this week’s FOMC meeting, said he believes that the US central bank is failing to defend its inflation goal and that it should be providing more stimulus to the economy.
Russia’s central bank increased its benchmark interest rate more than forecast from 8% to 9.5% to cool inflation expectations and halt the largest capital outflows since 2008 as international sanctions hurt the economy. The Russian ruble however nearly erased all gains made in the run‐up to the decision.
The ECB says banks plan to repay €3.85B in 3‐yr LTRO loans next week, the lowest repayment since October 8.
In the US, the Chicago PMI rose to 66.2 in October (60.0 expected) from 60.5 in September indicating that business activity in the Chicago area expanded at the fastest pace in a year. The final figure of University of Michigan confidence was upwardly revised from 86.4 to 86.9, a new 7‐year high.
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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