Global News October 6, 2015

  1. Bloomberg News
  2. Global News October 6, 2015

Bloomberg Business

German factory data: Factory orders in Germany unexpectedly dropped 1.8 percent in August versus estimates for a 0.5 percent increase. The surprise decline highlights Germany’s exposure to China’s growth slowdown. Stocks in Europe were slightly higher at 10:30 a.m. London time, with the Stoxx 600 rising 0.4 percent.

-Yuan overtakes yen: China’s yuan overtook Japan’s yen to become the fourth most-used currency for global payments in August, according to a statement from the Society for Worldwide Interbank Financial Telecommunications. A record 2.79 percent of transactions are now denominated in yuan. The data comes as China continues its push for the yuan’s inclusion in the IMF’s Special Drawing Rights currency basket which is due for its twice-a-decade review in November.}

-Rate rise expectations slip further: A raft of disappointing data, from U.S. payrolls to U.K. services, mean markets continue to push out the date they expect central banks on either side of the Atlantic to start tightening. Market expectations now point to no rate increase from the Bank of England until 2017 and the Federal Reserve holding until 2016, despite recent verbal interventions from Fed board members suggesting an earlier rise. According to some analysts, the difference between market forecasts and official guidance is putting the credibility of central bankers at risk.

Templeton bets big on EM: The recent sell-off in emerging-market assets has opened up multi-decade opportunities according to Franklin Templeton’s Michael Hasenstab, who thinks some of the assets caught up in the sell-off are «diamonds in the rough.» This theme was also covered by GAM U.K.’s Paul McNamara. In an interview on Bloomberg TV’s What’d You Miss, he looked at EM currencies that are likely to bounce from recent lows.

SABMiller says not enough: SABMiller Plc has rejected an informal offer from Anheuser-Busch InBev NV which they felt was too low. The offer made last week was for close to 40 pounds per share, while executives at SABMiller feel an offer closer to 45 pounds would represent fair value for the brewer. Under U.K. takeover rules, AB InBev has until 5 p.m. on Oct. 14 to make an offer or announce it doesn’t intend to proceed.

 

CNN Money

-Market overview: U.S. stock futures are looking weak Tuesday, though they have clawed back from earlier lows. European markets had initially been in the red, but are now climbing into positive territory. In Asia, most markets closed the day with gains. Chinese stock markets remain closed for a holiday. In the commodities market, prices are staying relatively steady. Oil is trading around $46 per barrel and gold is holding at $1,138 per ounce. All the major U.S. stock indexes shot up by more than 1.5% on Monday. The Dow Jones industrial average led the way with a 1.9% gain.

-Stock market movers — DuPont, Facebook, Amazon: Shares in American chemical company DuPont (DCDEX) are rising by 5% after the firm announced CEO Ellen Kullman is retiring and a new interim CEO is taking over. This firm also cut its earnings expectations for the year, blaming the revision on a strong dollar. Shares in Facebook (FB, Tech30) and Amazon (AMZN, Tech30) are dipping a touch premarket after Europe’s top court made a ruling that could damage the way tech companies use and share data within their own business units. The court ruled that European countries have the right to ban U.S. companies from transferring data back to the U.S.

-Earnings and economics: Pepsi’s (PEP) earnings are coming out ahead of the market open. After the close, the owner of KFC and Taco Bell — Yum! Brands (YUM) — will report results. On the economic side, the Census Bureau will post the national trade balance for August at 8:30 a.m. ET. The deficit narrowed in July.

-Ugly jobs report casts doubt over 2015 Fed rate hike: There were just 142,000 jobs created in September, badly missing estimates. Fewer jobs were added in July and August than previously believed, too. Now Wall Street sees just a 27% chance of the Fed raising rates in December, according to CME Group’s FedWatch, a futures tool that traders use to bet on the likelihood of Fed rate changes. That’s down from 42% on Thursday. And the probability of an October rate hike? Close to none. It’s now at 5%. While Fed chief Janet Yellen insisted October was a «live» meeting, it wasn’t seen as a realistic time to move on rates anyway because there’s no press conference scheduled. The «simply dreadful» jobs report raises fresh doubts about the U.S. economy and ability of the Fed to raise rates «not just this month, but this year,» Win Thin, a currency strategist at Brown Brothers Harriman, told clients in a note.