- Russia Weighs Capital Controls in Case Net Outflows Intensify. Russia’s central bank is weighing the introduction of temporary capital controls if the flow of money out of the country intensifies, according to two officials with direct knowledge of the discussions. Such measures would be preventative and used only if net outflows rise significantly, the people said, who asked not to be identified because no decision has been made. They didn’t give a timeline or a level that may force such a move, saying they are looking at all possible scenarios. The ruble weakened to a record low today, breaching the level where the regulator steps in to support the currency.
- Russia Loan Market Shut Down by Sanctions Squeeze Funding. Russian companies are facing a squeeze in funding as sanctions targeting industries smother lending to all borrowers, including those that aren’t blacklisted. “As long as those sanctions measures remain in force, one anticipates there will be very little international lending,” Philip Hanson, an associate fellow at the Chatham House research group in London, said yesterday by telephone. “They’d rather just play safe and avoid the risk.” Syndicated loans plunged 53 percent this quarter from a year earlier to $2.68 billion, the lowest level in at least five years, according to data compiled by Bloomberg. Coal miner Siberian Anthracite’s $250 million deal was the only international one signed this month, the smallest number for any September since at least 2008.
- Oops Japan Did It Again? Sales-Tax Spurs Recession Debate. Weak industrial production data from Japan today raises concern that the world’s third-largest economy may be back in recession, challenging Prime Minister Shinzo Abe’s growth strategy. Output -- a key component of the Coincident Index (JNCICCOI) that’s used by the Cabinet Office to determine peaks and troughs in the business cycle -- unexpectedly fell in August. It’s now dropped in three of the five months since an increase in the sales tax in April.
- German Unemployment Unexpectedly Rises as Risks Increase. German unemployment unexpectedly rose for a second month as seasonal factors combined with economic risks from the Ukraine crisis to a faltering euro-area recovery. The number of people out of work climbed a seasonally adjusted 12,000 to 2.92 million in September, the Nuremberg-based Federal Labor Agency said today. Economists forecast a decline of 2,000, according to the median of 27 estimates in a Bloomberg News survey.
- Commodities Head for Biggest Quarterly Loss Since 2008. Corn futures tumbled to a five-year low, gold is the cheapest since January and copper extended this year’s decline as raw materials headed for their worst quarter since 2008. The Bloomberg Commodity Index fell as much as 1.4 percent today, the biggest intraday loss since June 2013. U.S. corn inventories before the start of this year’s harvest were bigger than analysts forecast, the government said today. Holdings in bullion-backed exchange-traded products are near the lowest in five years amid waning investor demand.
- Euro’s Worst Quarter Since 2010 Leaves It at Two-Year Low. The euro dropped to the lowest level in two years against the dollar as slowing inflation boosted the case for the European Central Bank to add further monetary stimulus to avert deflation. The 18-nation currency headed for its worst quarter since 2010 amid the ECB’s moves to swell its balance sheet and cut borrowing costs to spur growth. Russia’s ruble slumped after Bloomberg News reported the central bank is weighing capital controls, and the Canadian dollar weakened as the nation’s economy stalled. The U.S. dollar has climbed this quarter as the Federal Reserve considers raising interest rates.
Business Insider:
@fxmacro:
Reuters:
- Global stocks head for worst quarter since euro crisis, dollar soars. On a broader scale, MSCI's 45-country All World stock index, was on course for a drop of almost 3 percent on the month and its biggest quarterly fall since Q2 2012, when the euro zone's debt crisis was at its most intense.
- Europe's €500bn money funds risk AAA downgrade if they 'break the buck'. Negative interest rates in Europe are causing havoc for the money market industry, threatening its long-term survival.
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