“Shooting in Las Vegas….”

Shooting in Las Vegas

At least 59 victims were dead and 527 were injured in the deadliest mass shooting in modern US history.  All this happened in an outdoor music festival in Las Vegas Nevada.  The gunman identified as Stephen Craig Paddock, a 64 year old retired accountant from Mesquite Nevada killed himself before officers went in.  So far the FBI did not find anything to suggest the attack was connected to international terrorism, despite a claim of responsibility from the Islamic State group which said that Stephen Paddock was a ‘soldier’ who had recently converted to Islam. Whilst Paddock appears to have no criminal history, his father was a bank robber who was on the FBI’s most wanted list in the 1960s.

Appointments at the FED

President Donald Trump’s advisors have given him a final list of candidates to take over as Federal Reserve chairman when Janet Yellen’s term ends early next year.  Among the leading candidates are Fed Governor Kevin Warsh, however, Fed Chair Janet Yellen remains under consideration.  The latest developments show that Trump is closer to making a final selection than previously known.  On Friday he said that he is two or three weeks away from announcing his nominee for the post that oversees the nation’s central bank.  The Whitehouse is in the meantime looking into the post for a Fed Vice Chair.  Trump has to decide on four appointments at the Fed which are that of the Chairman, Vice Chairman and two governors.

Spain

Spain is facing its biggest threat to its constitutional order since the end of the Franco era in the 1970s following the vote over the weekend with more than 85 percent of those who voted backing independence defying the central government that deemed the ballot illegal.   The risks are far from over as after the illegal independence referendum on Sunday separatists could make a unilateral declaration as earliest as this week to split the region from Spain.  Spanish Benchmark bonds fell to the lowest in almost three months, while stocks dropped and the euro declined.   Catalan separatist leaders signalled they may be moving towards a unilateral declaration of independence.  Political leaders outside Spain had publicly backed Spanish Prime Minister Mariano Rajoy to enforce the law ahead of the vote.  Images of riot police beating up voters in Catalonia and seizing ballot boxes created outrage on social media.  Rajoy sent thousands of police to restore public order.    Spanish Economy Minister Luis de Guindos has ruled out any sort of mediated talks with separatist leaders and said that Catalan banks have signalled they can move out of the region if the push for independence continues.

Euro Factories and Jobs

The euro area is on track for the strongest expansion in a decade with consumer and business confidence at the highest since before the financial crisis.  This is positive news for investors. The Purchasing Manager’s index for the region’s manufacturing industry rose to 58.1 in September from 57.4 in August according to IHS Markit. It is the highest level in more than six and a half years.  The economy of the EU is on track to expand to 2.2 percent this year which is the strongest pace in a decade as global trade, central bank stimulus and political risks all support growth.   Furthermore according to Eurostat unemployment was 9.1 percent in August.  According to IHS Markit Factory activity expanded in all major European countries led by Germany and the Netherlands.  Greece also enjoyed its strongest growth since June 2008.  According to chief economist Chris Williamson, the stronger euro has so far barely dented export growth and domestic demand conditions were generally seen to have improved.  The brighter economic outlook has also helped to push up the euro which has risen almost 12 percent against the dollar this year.

UK

The UK services activity which is the biggest part of the UK’s economy unexpectedly accelerated in September and price pressures increased according to a report by IHS Markit.  The pound rose due to the better than expected numbers.   The survey also showed that growth in new business fell to the weakest in more than a year.  Although the pace of economic growth remains robust the build-up of inflationary pressures is raising concern to the central bank.    The services Purchasing Managers Index increased to 53.6 last month from 53.2 in August.  The cost of inputs have advanced at the fastest pace in seven months.   Furthermore UK construction unexpectedly shrank for the first time in more than a year in September as Brexit is weighing in the decisions on investment in commercial building. The IHS Markit’s Purchasing Managers’ Index fell to 48.1 which is lower than the 50 threshold that divides expansion from contraction.   Meanwhile, the manufacturing report published on Monday by Markit showed solid growth at the end of the third quarter though the index declined more than economists expected.     After the numbers from manufacturing and construction earlier in the week, the all sector PMI fell to a seven-month low in September and according to Markit it is now at a level that would normally be associated with policy loosening rather than tightening.

Meeting in Moscow

Saudi King Salman bin Abdulaziz is on a historic four day state visit to Russia by a monarch of the Gulf Kingdom and held meetings with President Vladimir Putin.  The two energy superpowers seek an understanding on whether to extend an agreement curbing oil supplies.  The Saudi leader said that their talks will boost the global economy as well as aid international stability and security.  The output pact between the Organisation of Petroleum Exporting Countries and non-OPEC producers has spurred a recovery in crude prices.  On Wednesday Putin said that Russia may agree to extend the oil-supply agreement with OPEC to the end of 2018, although he will wait to make a decision closer to the expiry of the existing pact in March 2018.  According to Putin the arrangement reached in January has benefitted oil consumers and producers as it guarantees a stable market.  The visit by the Saudi King seems to deepen the ties with Russia and to reach deals to acquire oil and gas assets and the participation of Saudi in an Arctic LNG project, investment into Euroasia Drilling Co and a petrochemicals venture that involve Sibur Holding PJSC.

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