Global News September 18, 2015

  1. Bloomberg
  2. Global News September 18, 2015

Bloomberg News

– Fed fallout. Yesterday’s decision by the Federal Reserve not to raise interest rates continues to reverberate through markets this morning. European government bonds jumped as the Fed delay fuels speculation that the European Central Bank could step up its stimulus program.

Expectations for further easing from Bank of Japan policy makers, who are not meeting again until two days after the Fed’s October meeting, were not enough to stop the yen rising in overnight trade. U.S. two-year Treasuries staged their biggest one-day rally since 2009 following the Fed announcement, and that rally continues this morning with the yield on the two-year note falling to 0.67 percent according to Bloomberg Bond Trader data.

China home-price growth. New home prices in China rose in 35 of the 70 cities monitored by the government, up from 31 in July. The recovery, helped by five interest rate cuts since November and an easing of home-purchase restrictions, saw a recovery in property developer stocks on the Shanghai Stock Exchange, where the main index closed 0.4 percent higher in thin trading.

Greece election. There’s an election in Greece this weekend, and the result really is too close to call. With such uncertainty, it might come as a surprise to see Greek 10-year government bond yields hit a 2015 low in trading this morning. Results are expected to be announced late on Sunday evening, Athens time, with what are likely to be thorny coalition talks kicking off soon afterwards.

– Deutsche Bank exits Russia. Deutsche Bank AG is set to close its Russian corporate banking and securities business as Germany’s biggest lender continues its cost reduction drive. The move is supposed to help reduce complexity, costs, risks, and capital consumption, according to a statement published by the bank on Friday.

CNN Money

Reacting to the Fed: U.S. stocks look set to open with losses and all European indexes are down in afternoon trading as investors react to the Federal Reserve’s decision to leave interest rates unchanged because of concerns about the global economy. Germany’s DAX index is leading the way down with a fall of nearly 3%. Many other major European indexes are declining by 1% to 2%.

«Leaving U.S. interest rates unchanged would normally be enough to see markets cheer at the prospect of cheap money for longer, but heightened concerns about external factors such as China, market volatility and deflation derailing a stateside recovery has resulted in an understandably cautious stance being adopted,» noted Mike van Dulken, head of research at Accendo Markets.

Throwback Thursday: Over the previous trading session, the Dow Jones industrial average and the S&P 500 were down by a modest amount, losing 0.4% and 0.3% respectively. The Nasdaq inched up 0.1%.

«Financial markets priced a relatively low probability of a rate hike yesterday and the immediate reaction [to] the unchanged Fed rates was quite moderate,» explained Benjamin Dousa, a market analyst at SEB bank.

Potential market mover — Adobe: Investors should watch Adobe (ADBE) this morning. The shares are sinking by about 3% premarket after the company released earnings Thursday evening and said it was rejigging its management team.

Economic data: The U.S. Conference Board will post its monthly update of leading indicators at 10 a.m. ET. The composite index tracks business cycles, and it fell last month after four months of strong gains.