Equity Indices

	Closing Price	Change			Closing Price	Change
		On Week	YTD			On Week	YTD
Dow Jones Industrial Average	17,801.20	-0.44%	7.39%	FTSE 100	6,529.47	-3.16%	-3.25%
S&P 500	2,059.82	-0.33%	11.44%	Nikkei 225	17,813.38	0.85%	9.34%
Nasdaq Comp	4,766.47	0.22%	14.12%	Hang Seng	23,485.83	-0.71%	0.77%
DJ Euro Stoxx 50	3,162.77	-2.33%	1.73%	MSE Index	3,256.020	-0.49%	-11.66%

Ø The UK's main equity index hit one-month lows following supermarket Tesco's fourth profit warning for the year which dragged down other supermarket chains.  The FTSE ended 2.1% down at 6,529.47 points, close to its lowest closing in a month and suffering its biggest one-day fall since a 2.8% drop on October 15.  The Dow and S&P 500 fell on concerns about global weakness and political turmoil, while the Nasdaq edged higher along with tech shares and energy.

 

Interest Rates

 

Benchmark Bond Yields

	Current 2yr Yield	Yield Change		Current 10yr Yield	Yield Change			Present Interest Rate	Last Variance
		On Week	Since Dec 12		On Week	Since Dec 12
US	0.62	0.07	0.24	2.23	-0.08	-0.76	FED	0.00 to 0.25	-0.75  to -1.00	16-Nov-08
Euro	-0.03	0.00	-0.23	0.69	-0.05	-1.23	ECB	0.05	-0.10	04-Sep-14
UK	0.51	-0.02	-0.06	1.90	-0.07	-1.13	BOE	0.50	-0.50	05-Mar-09
Japan	0.00	0.00	-0.08	0.41	-0.03	-0.32	BOJ	0.00 to 0.10	-0.10	05-Oct-10
Australia	2.30	-0.10	-0.34	2.95	-0.19	-1.28	RBA	2.50	-0.25	06-Aug-13
Canada	1.02	0.01	-0.10	1.89	-0.07	-0.84	BOC	1.00	0.25	08-Sep-10
Malta	0.46	-0.02	-0.49	1.97	-0.05	-1.33

 

Ø The Treasury on Tuesday accepted Euro 6 million in 28-day Treasury Bills at an average yield of 0.06% and Euro 2.8 million in 91-day Treasury Bills at an average yield of 0.08%.  Outstanding Treasury Bills amount to Euro 209,940,000 - a decrease of Euro 24.7 million from the previous week.

 

Ø In the UK, there was a surprise decline in industrial output during October indicating a weak start to the fourth quarter and pointing to a slowdown in GDP growth. Industrial production unexpectedly fell by 0.1% month-on-month in October against expectations of 0.2% growth. This resulted in year-on-year growth slipping to an eleven month low of 1.7%. The drop was led by a 0.7% month-on-month decline in manufacturing, falling short of expectations of 0.2% growth. The detail of the report revealed declines in electronic, pharmaceutical and chemical products.

 

Ø The ECB kept policy on hold as widely expected and announced sharp cuts in its inflation and growth forecasts.  In the associated press conference, President Mario Draghi said the Governing Council will judge early next year whether more action needs to be taken to revive the economy.  The UK Monetary Policy Committee also left policy unchanged, keeping the Bank Rate at 0.5% and the asset purchase target at £375 billion.

 

Ø In the US, employers added the largest number of workers in nearly three years while there was a pick-up in wage growth.  Nonfarm payrolls exceeded expectations surging by 321,000 in November, the highest reading since January 2012 and following an upwardly revised 243,000 gain in the previous month. In addition, average hourly earnings rose by 0.4%, the largest gain since June 2013. The jobless rate was unchanged at a six-year low of 5.8%. The improvement in the labour market is expected to reassure Fed policymakers that the economy is strong enough to withstand an interest rate rise next year.

 

Ø In Germany the economy started the fourth quarter with a positive surprise as industrial orders far exceeded expectations but the mood was dampened as the Bundesbank slashed its growth forecasts. Industrial orders leapt by 2.5% month-on-month in October, following an upwardly revised 1.1% rise in the previous month. The improvement was driven by a 5.3% rise in domestic demand while overseas orders rose by 0.6%. However, the Bundesbank downgraded its growth outlook for the German economy by reducing growth to 1.4% for this year (down from 1.9%), while halving forecast growth to 1% for 2015.  It also trimmed its 2016 growth forecasts to 1.6%.

 

Forex

 

	Exchange Rate	Change
		On Week	YTD
EUR/USD	1.2374	-0.06%	-9.96%
USD/JPY	119.6900	0.42%	13.65%
GBP/USD	1.5669	0.22%	-5.36%
EUR/GBP	0.7895	-0.29%	-4.95%
USD/CHF	0.9711	-0.10%	8.84%

 

Ø  The US dollar hit a seven year high of 121.86 against the Japanese yen at the start of the week but slid back as investors consolidated gains made following a strong US jobs report which is expected to trigger an interest rate increase next year.  This prompted investors to take profits as the end of year approaches. 

 

 

HSBC Bank Malta p.l.c. has based this document on information obtained from sources it believes to be reliable but which it has not independently verified and is for your personal, non-commercial use only. The contents do not constitute a solicitation of the purchase or sale of any investment. Although HSBC makes every reasonable effort to do so, it makes no representations that the information presented is accurate, complete or timely. Expressions of opinion herein are subject to change without notice. Accordingly, HSBC shall not be liable for any decisions made or actions taken in reliance on such information. Past performance is not necessarily a guide to future performance and the value of investments may go down as well as up. Issued by HSBC Bank Malta p.l.c., which is regulated by the Malta Financial Services Authority.