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Market briefing: US markets closed mostly lower on Friday, with the S&P 500 and Dow Jones indices ending slightly weaker.

Published: 09:00 24 Oct 2016 BST

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UK Market Snapshot

UK markets ended lower on Friday. British American Tobacco declined 2.9%, after it proposed to pay $47.0 billion for full control of its US peer Reynolds American. InterContinental Hotels Group lost 2.0%, as it reported slower than expected growth in its revenue per available room for the third quarter. Bucking the trend, Acacia Mining soared 12.8%, as it expects its full year gold production to be higher than estimates. Burberry Group advanced 3.1%, on the back of report that the former might merge with American high end goods retailer, Coach, in a deal valued at $20.0 billion. Informa gained 2.3%, after a leading broker upgraded its rating on the stock to ‘Buy’ from ‘Hold’ and also raised its target price to 800.0p from 740.0p. The FTSE 100 slipped 0.1%, to close at 7,020.5, while the FTSE 250 eased 0.1%, to settle at 17,934.2.


US Market Snapshot

US markets closed mostly lower on Friday, with the S&P 500 and Dow Jones indices ending slightly weaker. Advanced Micro Devices plunged 6.3%, after the chip maker reported a wider loss for the third quarter. AT&T declined 3.0%, on the back of news that the former was in advanced talks to buy Time Warner, up 7.8%. On the brighter side, Reynolds American rallied 14.0%, after UK’s British American Tobacco offered to acquire the remaining stake in the former for $47.0 billion. PayPal Holdings surged 10.1%, as it posted positive results for the third quarter. Microsoft climbed 4.2%, after it reported upbeat results for the first quarter of 2017. McDonald’s advanced 3.0%, as its results for the third quarter topped market projections. The S&P 500 fell marginally, to settle at 2,141.2. The DJIA shed 0.1%, to settle at 18,145.7, while the NASDAQ rose 0.3%, to close at 5,257.4.


Europe Market Snapshot

Other European markets finished mostly higher on Friday, supported by a weaker Euro. Valeo advanced 3.0%, as it boosted its operating margin target to about 8.0% for the full year 2016 following a rise in its sales for the third quarter. SAP edged up 2.1%, after it raised its earnings guidance for 2016 amid improved outlook for its cloud platform S/4 Hana. On the losing side, Assa Abloy plunged 6.5%, as its operating income for the third quarter fell short of analysts’ estimates. Telefonaktiebolaget LM Ericsson tumbled 5.9%, after it swung to a loss in the third quarter, mainly affected by a slowdown in telecom-equipment market and fierce Asian competition. The FTSEurofirst 300 index rose marginally, to close at 1,359.0. Among other European markets, the German DAX Xetra 30 added 0.1%, to close at 10,710.7, while the French CAC-40 dipped 0.1%, to settle at 4,536.1.

Asia Market Snapshot

Markets in Asia are trading mostly higher this morning. In Japan, H2O Retailing has tumbled 4.6%, after it trimmed its operating profit, current profit and revenue forecasts. Nintendo has declined 3.4%, extending its losses from the last session, as investors were left unimpressed with the new offering, NX gaming console. Auto exporters, Suzuki Motor and Mitsubishi Motors have slid 0.4% and 0.5%, respectively, amid strength in the Japanese Yen. On the contrary, Fukui Computer Holdings has advanced 4.9%, after its preliminary operating profit for the first half of the year surpassed analysts’ estimates. In Hong Kong, CNOOC and PetroChina have gained 0.9% and 2.5%, respectively. In South Korea, index majors, POSCO and Samsung Electronics have added 0.8% and 2.1%, respectively. The Nikkei 225 index is trading marginally lower at 17,179.3. The Hang Seng index is trading 0.5% up at 23,488.6, while the Kospi index is trading 0.5% higher at 2,043.4.

Commodity, Currency and Fixed Income Snapshots

Crude Oil
At 0330GMT today, Brent Crude Oil one month futures contract is trading 0.42% or $0.22 lower at $51.56 per barrel, on news that Iran would not join OPEC’s plan to cut oil production. On Friday, the contract climbed 0.78% or $0.40, to settle at $51.78 per barrel, as Russia reiterated its commitment to joining the proposed output freeze by major producers. Meanwhile, Baker Hughes reported that the total weekly US active oil rigs surged by 11 to 443.
Gold
At 0330GMT today, Gold futures contract is trading 0.32% or $4.10 lower at $1263.60 per ounce. On Friday, the contract advanced marginally or $0.20, to settle at $1267.70 per ounce, reversing its losses from the prior session.
Currency
At 0330GMT today, the EUR is trading 0.15% lower against the USD at $1.0866, ahead of the Euro-zone and German preliminary Markit manufacturing and services PMIs, both for October, slated to release in a few hours. On Friday, the EUR slid 0.42% versus the USD, to close at $1.0882, as comments from the European Central Bank President, Mario Draghi, continued to weigh on the currency. Meanwhile, data showed that the Euro-zone consumer confidence improved in October.
At 0330GMT today, the GBP is trading 0.30% lower against the USD at $1.2196. Additionally, investors will look forward to the US Markit manufacturing PMI data for October and Chicago Fed national activity index for September, due to release later today. On Friday, the GBP weakened 0.14% versus the USD, to close at $1.2233, after UK’s public sector net borrowings advanced more than expected in September.
Fixed Income
In the US, long term treasury prices rose and pushed yields mostly lower. On Friday, yield on 10-year notes lost 2 basis points to 1.74%, while yield on 2-year notes remained unchanged at 0.84%. Meanwhile, 30-year bond yield fell 2 basis points to 2.48%.

Key Economic News

UK public sector net borrowing posted a deficit in September
The public sector net borrowing in the UK has posted a deficit £10.10 billion in September, from a revised deficit of £10.30 billion in the prior month. Market anticipation was for public sector net borrowing to report a deficit of £8.20 billion.
UK public sector net cash requirement reported a deficit in September
In the UK, public finances (public sector net cash requirement) has posted a deficit £13.30 billion in September, from a deficit of £0.70 billion in the prior month.
UK public sector net borrowing reported a deficit in September
In the UK, in September, the public sector net borrowing (excluding temporary effects of financial interventions) has reported a deficit £10.60 billion, following a revised deficit of £10.80 billion in the previous month. Market expectation was for public sector net borrowing to report a deficit of £8.50 billion.
Euro-zone consumer confidence index rose in October
In October, the flash consumer confidence index in the Euro-zone registered a rise to -8.00, meeting market expectations. The consumer confidence index had registered a level of -8.20 in the prior month.
Euro-zone government debt to GDP ratio registered a rise in year 2015
Government debt to gross domestic product (GDP) ratio rose 90.40% on an annual basis in the Euro-zone, in year 2015. In the prior year, government debt to GDP ratio had climbed 90.70%.
Swiss M3 money supply advanced in September
In Switzerland, M3 money supply rose 3.00% on an annual basis, in September. M3 money supply had risen 2.80% in the previous month.
Canadian CPI rose less than expected in September
In September, the consumer price index (CPI) advanced 0.10% in Canada on a MoM basis, less than market expectations for a rise of 0.20%. In the prior month, the CPI had fallen 0.20%.
Canadian CPI advanced in September
The CPI rose, on monthly basis, to a level of 128.80 in September, in Canada, compared to a reading of 128.70 in the previous month. Market expectation was for the CPI to climb to 128.90.
Canadian retail sales unexpectedly declined in August
In August, retail sales in Canada unexpectedly eased 0.10% on a MoM basis, lower than market expectations for a rise of 0.30%. Retail sales had registered a revised drop of 0.20% in the prior month.
Canadian CPI rose in September
In Canada, the seasonally adjusted CPI advanced 0.20% in September on a monthly basis. CPI had dropped 0.10% in the prior month.
Canadian core CPI rose as expected in September
The core CPI in Canada registered a rise of 0.20% on a monthly basis in September, meeting market expectations. The core CPI had registered an unchanged reading in the prior month.
Canadian core CPI climbed in September
In Canada, the seasonally adjusted core CPI registered a rise of 0.10% on a MoM basis, in September. In the previous month, core CPI had recorded a flat reading.
Canadian retail sales (ex-autos) remained flat in August
In August, retail sales (ex-autos) in Canada remained steady on a monthly basis, less than market expectations for an advance of 0.30%. In the prior month, retail sales (ex-autos) had dropped by a revised 0.20%.
Japanese adjusted merchandise trade surplus narrowed in September
Adjusted merchandise trade surplus in Japan dropped to ¥349.00 billion in September, from a revised adjusted merchandise trade surplus of ¥364.40 billion in the previous month. Market expectation was for the nation to record an adjusted merchandise trade surplus of ¥211.00 billion.
Japan posted merchandise (total) trade surplus in September
Merchandise (total) trade surplus in Japan stood at ¥498.30 billion in September, from a revised merchandise (total) trade deficit of ¥19.20 billion in the prior month. Market expectation was for the nation's merchandise (total) trade surplus to stand at ¥366.10 billion.
Japanese exports fell less than expected in September
On a YoY basis, exports in Japan slid 6.90% in September, lower than market expectations for a fall of 10.80%. Exports had recorded a drop of 9.60% in the previous month.
Japanese imports dropped less than expected in September
In September, on a YoY basis, imports in Japan fell 16.30%, compared to a revised drop of 17.20% in the previous month. Markets were anticipating imports to fall 17.00%.
Japanese manufacturing PMI climbed in October
The flash manufacturing PMI recorded a rise to 51.70 in October, in Japan, compared to a level of 50.40 in the previous month.

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