Europe
It’s been a broadly positive day for markets in Europe today, though Spanish stocks have come under pressure again after Catalan President Carles Puigdemont maintained his stance of constructive ambiguity with respect to whether Catalonia now considered itself a republic.
His call for further talks with Spanish Prime Minister Rajoy drew a predictably short shrift response from the Spanish government, which said that the region had taken a further step towards the triggering of article 155, and direct rule from Madrid. With a second deadline looming on Thursday it is becoming increasingly likely that whatever the outcome we will probably see the calling of new elections whichever side blinks first, with the only question being around timing.
Elsewhere in Europe the gains have been fairly modest while the only interesting thing about today’s London market has been the discussion over the colour of the London skyline which appears to have adopted a rather orange apocalyptic hue, due to sand from the Sahara desert, being picked up by storm Ophelia.
This morning’s Chinese inflation data gave the basic resource sector a lift with copper, palladium and crude oil prices making good gains, with copper prices rising back at levels last seen in 2014.
These rises in commodity prices have seen Antofagasta (LON:ANTO), Glencore (LON:GLEN) and BHP Billiton (LON:BLT) all help underpin the FTSE100 today, however it hasn’t been enough to push the index back beyond last week’s record close.
Among the worst performers has been medical devices company ConvaTec (LON:CTEC) who warned on that sales into the end of the year are expected to be slightly weaker than forecast, with delays in moving manufacturing lines from the US to the Dominican Republic causing production slowdowns.
GKN (LON:GKN) has also slipped back after being downgraded to “hold” by Société Generale (LON:0J6Y), though on the flip side of that the company was reaffirmed at “buy” by HSBC (LON:HSBA).
US
US markets have picked up where they left off last week, opening at new record highs after the latest Empire manufacturing survey for October showed a jump to 30.2, its best level in three years, though new orders were disappointing, slipping back slightly, while prices paid also showed little sign of picking up either.
Investors will be paying particular attention to Netflix's (NASDAQ:NFLX) latest Q3 numbers to see if the company can maintain and build on the growth in subscriber numbers we saw in Q2.
Overseas markets saw subscribers jump by 5.2m in Q2 pushing the overall number of subscribers over the 100m mark for the first time. The company is currently in a multibillion dollar battle for market share with Amazon (NASDAQ:AMZN) and has recently increased its prices on its more popular packages in order to generate more revenue to compensate for the extra capital expenditure.
FX
The euro has struggled to make any progress today slipping back a touch as traders take stock of recent events in Austria and Spain, with the Spanish government giving Catalonia another three days to clarify its position on the recent illegal referendum vote.
The pound has shrugged off the continuing uncertainty about the next move in the Brexit negotiations despite a report that talks could breakdown if the EU doesn’t show any signs of a compromise.
The Canadian dollar is the worst performer despite the rise in oil prices, and has been declining for a while now, with concerns about a break down in NAFTA talks continuing to weigh on the currency.
Commodities
Crude oil prices have risen on the back of escalating tensions between Iraqi forces and the Kurds around Kirkuk, after Iraqi forces entered the city. There appear to be conflicting reports as to whether production levels have been interrupted but the worry is an exchange of fire could escalate into something more serious. A reduction in US rigs was also helping support prices while improving economic data was helping support expectations of higher demand.
These expectations have also helped propel copper prices to their highest levels in three years, while palladium prices have gained support from expectations of higher demand in the use of motor vehicles in pollution control devices.
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