The three major U.S. stock indexes closed lower for a third consecutive session Tuesday ahead of key inflation reading and kick-off to third quarter earnings season. The Dow shed 0.3%, the S&P 500 fell by 0.2% and the Nasdaq tickled down by 0.1%. The markets were quiet as investors await several upcoming catalysts; like September CPI and retail sales, latest FOMC meetings and the start of Q3 earning season. Short-term U.S. Treasury yields reach a 19-month high on inflationary pressure leading to an earlier rate rise.
Asian stocks opened mixed these mornings. With Japan’s Nikkei down by 0.01% by a fall in steel and electronic stocks, as concerns continue about higher cost of raw materials. Hong Kong’s Hang Seng morning trading session has been cancelled die to typhoon alert. China’s CSI composite slipped a further 0.5%, continuing this week’s downtrend.
U.K. equities were lower at the close on Tuesday, as losses in the Fixed Line Telecommunications, Travel & Leisure and Life Insurance/Assurance sectors propelled shares lower. The pan-European STOXX 600 index slipped 0.4%, the German DAX was down 0.2% and France’s CAC 40 fell 0.5%. On the macroeconomic front, the UK’s labor market showed signs of further recovery as employers added a record-high 207,000 staff to their payrolls in September. Separate data showed the unemployment rate fell to 4.5% in the three months to August, reinforcing bets for a Bank of England rate hike sooner.
The lira slid to a record low on Tuesday after President Erdogan hinted that they may up the military offensive in Syria. The move will further strain ties with the US which supports Kurdish fighters and has been threatening to impose sanctions on Ankara. The lira touched 9.0458 to the dollar late Tuesday before paring slightly in early Wednesday trading. Bonds were about flat however with TURKEY 31s about 6.83%.
The IMF is set to release $266.2 million to Kenya after conclusion of a review of the 3-year programme. The expected disbursement comes on the heels of a reported failure to make a loan payment to Italian lender Intesa Sanpaolo; the first repayment instalments were supposed to have been paid in May for loans taken for the construction of two dams. KENINT 32s were little moved, with yields up 2bps from Tuesday’s close.
Oil prices edged down on Wednesday on concerns that oil demand growth will fall as major economies suffer through inflation and supply chain issues though surging prices for power generation fuel such as coal and natural gas limited losses. Brent crude futures fell 5 cents, or 0.1%, to $83.37 a barrel at 0622 GMT, extending a 23-cent loss on Tuesday. U.S. West Texas Intermediate (WTI) crude futures fell 6 cents to $80.58 a barrel after gaining 12 cents on Tuesday. Both contracts pared losses after falling as much as 70 cents earlier when China, the world’s biggest crude importer, released data showing September imports fell 15% from a year earlier.