-U.S. budget passed: In the early hours of Friday morning Congress passed a two-year bipartisan budget plan, meaning a debt default on Nov. 3 will be avoided. With some details still to be ironed out the deal diminishes, but does not eliminate, the chances of a government shut-down ahead of current funds expiring on December 11.
-Valeant cuts ties with Philidor: Valeant Pharmaceuticals International Inc. has said that it will terminate its relationship with Philidor Rx Services. The decision comes after Bloomberg News reported that Philidor altered doctors’ prescriptions to wring more reimbursements out of U.S. health insurers. Valeant has lost almost $10 billion in market value after a Wall Street short-seller suggested the company was using Philidor to engage in Enron-style accounting practices. John Hempton, a hedge fund manager who has also long been critical of Valeant, thinks the company will likely now face litigation.
-Yuan strengthens: The yuan has risen the most since China scrapped a dollar peg in 2005, closing 0.62 percent higher according to China Foreign Exchange Trade System prices. The move higher comes after the People’s Bank of China said it will consider a trial program that would ease capital controls in the Shanghai free trade zone. The program is being seen as another step in China’s efforts to have its currency included in the International Monetary Fund’s reserve-currency basket.
-BOJ holds: BOJ Governor Haruhiko Kuroda and his fellow board members defended their decision not to add further stimulus to the Japanese economy, blaming the slide in oil prices for their continued failure to reach the bank’s inflation goal. Tokyo’s Topix index rose 0.7 percent to cap its best monthly gain in two years as investors decided to focus on a report that the government is considering extra fiscal stimulus instead.
-Euro-area inflation rises to zero: Eurostat’s flash estimate of inflation for October showed a rise to 0.0 percent from last month’s -0.1 percent. Very low inflation in the euro-area is still being largely driven by energy, with that sub-index showing an annual decline of 8.7 percent this month. Unemployment decreased to 10.8 percent in September from a revised 10.9 percent, the statistics agency said in a separate release.
-China wants to double its economy by 2020: Beijing has affirmed its goal of doubling the size of China’s economy to $12 trillion by 2020, despite headwinds that are taking a bite out of growth. The ambitious doubling from 2010 levels is one of the government’s top priorities announced at the end of a week-long meeting in Beijing, where officials discussed the country’s social and economic agenda for the next five years. Economists say China’s economy will have to average a minimum of 6.5% growth over the next five years to reach the goal, a slower pace than the roughly 7% expansion posted so far this year.
-Record levels of cash flocking to the U.S.: Foreign direct investment into the U.S. hit $200 billion in the first half of 2015, a record high according to a report published Thursday by the Organization for Economic Cooperation and Development (OECD). It’s a sign that global investors are optimistic about the U.S. economy at a time when the rest of the global economy undergoes a slowdown. However, a lot of the money can be traced to foreign entities that are buying U.S. companies. Many of these companies then relocate overseas to escape high corporate taxes in the United States. About $86 billion of the $200 billion went towards chemical companies. Another $80 billion to manufacturing companies. The OECD surmises that most of these funded mergers.
-Venezuela is running out of cash and selling its gold: The cash-strapped country could default by next year when lots of debt payments are due. Venezuela’s reserves, which are mostly made up of gold, have fallen sharply this year as the country needs cash to pay off debt and tries to maintain its social welfare programs. Venezuela owes about $15.8 billion in debt payments between now and the end of 2016. But it doesn’t have enough to make good on its payments. Venezuela only has $15.2 billion in foreign reserves — the lowest amount since 2003. A lot of those reserves are in gold. Less than $1 billion of Venezuela’s reserves are in cash, and it has a couple billion in reserves at the IMF.