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October 29, 2012
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  Top Stories 
  • Draghi backs eurozone budget veto for special commissioner
      
    Draghi/Reuters
    A call by German Finance Minister Wolfgang Schaeuble for a super commissioner with power over national budgets throughout the eurozone won the backing of European Central Bank chief Mario Draghi. Meanwhile, German Chancellor Angela Merkel called for more far-reaching global financial regulation, touching on everything from over-the-counter derivatives to bank capital requirements. Bloomberg (10/28) , Financial Times(tiered subscription model) (10/27) LinkedInFacebookTwitterEmail this Story

  • U.S. jobless rate may have edged up in October
      
    Reuters
    Although the latest reading on U.S. economic growth came in at stronger-than-expected 2%, it probably isn't enough to keep the unemployment rate from inching up. Economists project the latest monthly jobs data this week will reveal a rise in joblessness for October. Detroit Free Press (10/28) LinkedInFacebookTwitterEmail this Story

  • U.K. emerges from recession, but gloom might return soon
    Last week's surprise announcement of 1% recession-busting growth in the U.K. economy for the latest quarter damped expectations of further monetary easing. But more indicative data due this week on manufacturers and builders may paint a gloomier picture leading to more Bank of England stimulus after all. The Independent (London) (10/28) LinkedInFacebookTwitterEmail this Story
 Advance your understanding of equity portfolio construction
Don’t miss the Advances in Equity Portfolio Construction Program on 20–21 November in Singapore, hosted with EDHEC-Risk Institute. This two-day seminar offers the technical and conceptual tools to better understand the limits and benefits of different portfolio construction approaches. CFA Institute members receive a 25% discount on registration.
 

  Market Activities 
  • INTERNATIONAL MARKETS OVERVIEW
      
    Reuters
    A ratings downgrade for BNP Paribas hit bank stocks Friday across Europe while disappointing results in tech shares also kept a lid on the market. The Stoxx Europe 600 edged up 0.10% to 270.51. In the U.S., the market showed little direction, with the S&P 500 ending down 0.07% at 1,411.94, down 1% for the week. Here is a continuously updated list of global stock indexes. The Wall Street Journal (10/29) , The Wall Street Journal (10/26) , CNNMoney (10/26) LinkedInFacebookTwitterEmail this Story

  • U.S. housing data drive down Asian shares
    Disappointing earnings reports from key companies helped send Asian shares tumbling Friday. The Nikkei plunged 1.35% to 8,933.06, the Hang Seng dropped 1.21% to 21,545.57, the Kospi fell 1.72% to 1,891.43, and the S&P/ASX was down 0.84% at 4,472.40. Bloomberg Businessweek (10/26) LinkedInFacebookTwitterEmail this Story
  Economic Trends & Outlook 
  • China appears on right path in near term, but future looks less bright
    China has little fiscal room to stimulate the economy this quarter due to lower revenues and higher-than-expected outlays over the first nine months of the year, suggest figures from the Ministry of Finance. But China's economy is in good shape over the next few months, says Jia Kang, director of the ministry's Research Institute for Fiscal Science, although the longer outlook is much more uncertain as the country begins to lose its labor cost advantage. Bloomberg (10/29) , The Wall Street Journal/Dow Jones Newswires (10/27) LinkedInFacebookTwitterEmail this Story
  • Profit gains slow down at China Construction Bank
      
    Reuters
    Rising defaults and difficulty maintaining margins contributed to a slower 12.4% rise in third-quarter profit for China Construction Bank, the nation's second-largest lender. "The third-quarter growth rates of Chinese banks cannot mask their deteriorating operating trends. Even though big banks are still holding on to their loan pricing power, interest-rate deregulations will eventually hurt everybody's margins," said Xie Jiyong, a Shanghai-based analyst at Capital Securities. Bloomberg (10/28) LinkedInFacebookTwitterEmail this Story

  • All eyes on Indian central bank policy meeting Tuesday
    India's central bank is considered unlikely to lower interest rates during its policy meeting Tuesday, whose outcome is expected to point the way for markets. However, the level of deposits that lenders are required to keep with the central bank might be slashed, a move that could lift bank shares. Reuters (10/28) LinkedInFacebookTwitterEmail this Story
  • India, China work to narrow trade gap, keep ties open
    China has grown quickly over the past several years to become India's largest trade partner, but along with the growth has come increasing tension over India's trade deficit with China. Trade talks between the two nations next month will focus on the gap, and the two sides are even now trying to work out measures to narrow it. The Hindu (India) (10/27) LinkedInFacebookTwitterEmail this Story
  • Japan launches economic stimulus, with more moves to come
    Japan's latest injection of economic stimulus from all sectors will amount to 750 billion yen, with 392.6 billion yen coming from the national government. A second round of economic measures is due by the end of November with the hope that they "will accelerate efforts to help Japan recover from deflation soon and revitalize its economy," according to Prime Minister Yoshihiko Noda. Yomiuri Shimbun (Japan) (10/27) LinkedInFacebookTwitterEmail this Story
  • Advocates of Japanese greatness losing hope
    Twenty years ago, Japan occupied a prominent place on the world stage as a nation destined to achieve dominance. Today, nearly all those who predicted great things for the country have abandoned hope, citing a rapidly aging population, political dysfunction and the loss of a key economic edge. But some see hope for Japan through stronger ties with the rest of Asia. The Washington Post (10/27) LinkedInFacebookTwitterEmail this Story
  • S. Korean economy may not have bottomed out, observers say
    Fears are growing that South Korea's economic growth could be thrown into reverse soon, given further slowing in the global economy and at home and the explosive risk of the eurozone crisis. "Some forecast that the third quarter is the bottom, but things are not quite as good as you might think. ... It might be possible that the growth rate remains stagnant in similar ranges during the fourth quarter, but it is difficult to rule out a minus growth during the first quarter of next year," said a high-ranking official of the Federation of Korean Industries. Yonhap News Agency (South Korea) (10/28) LinkedInFacebookTwitterEmail this Story
  • Australia looks to better ties with Asia for its future
    Australia is well situated to build on Asia's anticipated growth in coming years and must capitalize on that advantage with stronger trade ties, Prime Minister Julia Gillard says in a report titled "Australia in the Asian Century." The Australian government wants trade with Asia to total a third of gross domestic product by 2025, up from a quarter currently. "We will continue to support a greater role for Asian countries in a rules-based regional and global order. Australia's alliance with the U.S. and a strong U.S. presence in Asia will support regional stability, as will China's full participation in regional developments," the report says Bloomberg Businessweek (10/28) LinkedInFacebookTwitterEmail this Story
  Capital Markets & Financial Products 
  • China's currency is seen as destined for global role
      
    Reuters
    The rise in global prominence, particularly in Asia, of China's currency is being accelerated by quantitative easing in the U.S., analysts say, but the yuan's importance will continue to grow regardless. "I think the yuan is destined to be one of the global reserve currencies, given China's size and wealth. So the wider use of the Chinese currency across the Asian region is just one step along the path towards the almost inevitably large role that the yuan will eventually play," said Paul Bloxham, chief economist at HSBC Australia New Zealand. China Daily (Beijing) (10/26) LinkedInFacebookTwitterEmail this Story

  Industry & Regulatory Update 
  • Plan for overarching Indian regulation is rejected
    A proposal for a mega-regulator with authority over all of India's financial markets was dismissed by C. Rangarajan, chairman of the Economic Advisory Council to the Prime Minister. He said better-defined boundaries and cooperation among existing regulators would serve better. "At this particular time, it may be advisable to continue with [the] existing system, rationalize the overlap if there are any and try to improve the coordination among different regulators," Rangarajan said. The Economic Times (India)/Press Trust of India (10/28) LinkedInFacebookTwitterEmail this Story
  • High-frequency trading: A real concern or a scapegoat?
      
    Reuters
    Mysterious price spikes and dips and computer glitches are drawing attention to high-frequency trading in Australia's increasingly splintered markets, where opportunities for split-second arbitrage have grown. Some, however, dismiss the concerns, saying the high-speed practices merely serve as a convenient peg on which to hang other systemic problems. The Sydney Morning Herald (Australia) (10/27) LinkedInFacebookTwitterEmail this Story

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