Europe

China posted higher than anticipated imports in September, and the growth rate ticked up too, and this boosted the basic resources sector. 

Imports jumped by 18.7%, while analysts were expecting a rise of 14.7%. Throughout 2017 Chinese imports have be climbing steadily, which points to a robust manufacturing and construction sector. Glencore, Rio Tinto and Anglo American are higher on the back of it as China’s appetite for minerals is still strong.

GKN announced that full-years profits would only be slightly ahead of last year’s earning after it stated it will probably have to endure two charges, totalling £40 million. The company stated it couldn’t give any detail of the charges because the information is sensitive. Added to the probable charge, is a write-down of £15 million in relation to one of its operations in North America. The company complained about ongoing operational challenges and pressure on pricing which also worried investors. Last year the company registered profits before tax of over £1.1 billion so the possible charges equating to £40 million is small by comparison. The stock gapped lower and has lost ground as the session went on, if it falls below the August low of 313p, it may target 295p.

Shares in Provident Financial are up 15.4% after the company confirmed it will incur a full-year loss of up to £120 million, and that it will not be paying a dividend this year .The troubled lender is looking for a new CEO and the turnaround is underway. Some investor confidence was restored today, but the outlook is still bleak.   

US

The Dow Jones and the S&P 500 are marginally higher on the day, and the latter reached a fresh all-time high. The jump in US retail sales and inflation added to the bullish sentiment, as it shows consumer demand is finally playing catch-up with other economic indicators.

In September retail sales increased by 1.6% on a month on month basis, while economists were expecting an increase of 1.7%. Yearly inflation jumped from 1.9% to 2.2%, and traders were anticipating a reading of 2.3%. In a way it was a win-win for the stock market as it showed consumer spending is rising, but as the indicators didn’t top estimates, so the prospect of a rate hike isn’t imminent.

Bank of America share are up 1.5% after the company posted a 13% jump in third-quarter profits. The retail banking division and the wealth management operation performed well, but fixed income trading was weak. A drop in earning from the bond trading has been common place across other banks.  The stock hit a nine year high last week, and after today’s update the sentiment is likely to remain bullish.  

FX

GBP/USD drove higher today after reports came out that the EU are working on a proposal for a post-Brexit trade deal with the UK, this announcement reversed the dip in the pound yesterday. The sell-off in the US dollar on account of the retail sales and inflation data from America not meeting expectations also helped sterling. The pound has crawled back most of the losses in incurred in October so the sentiment is turning for sterling.

EUR/USD is a touch higher today as we has some mixed inflation out of the eurozone. Italy’s CPI dipped back to 1.1% from 1.2%, while Germany’s held steady at 1.8% it was been a quiet day for the single currency, and the softness in the greenback helped it along. The euro is resting on its 50-day moving average at 1.1847, and if this level is cleared it could open up the way to 1.2000.

Commodities

Gold has traded above the $1300 mark for the first time since late September as the weakness in the greenback has lifted the metal.  The assets have been pushing higher for the past week and the momentum is with the bulls. The firm but not really strong retail sales and inflation data from the US won’t have gold traders overly worried about an interest rate hike from the Fed in the near-term.

WTI and Brent Crude oil has lost ground in the past few hours but it is still up on day as the strong Chinese import data fuelled buying. China’s oil imports in September were above average for 2017, and the second largest economy in the world is the largest importer of oil.

Traders will be keeping an eye out for the Baker Hughes active rig count at 6pm (UK time), last week the reading was 748 active rigs.

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