Goldman cuts oil forecast, Bank of Japan stimulus expectations increase and EU opposition ends a telecom merger. Here are some of the things people in markets are talking about today.
Goldman Sachs cut its forecast for oil through 2016 and, while it is not their base case, said that the commodity could drop to $20 a barrel due to the continuing global surplus. The IEA says it expects production by countries outside OPEC will decrease by the most since 1992 as low prices bite, with drops in U.S. shale production accounting for 80 percent of the decline. Futures were down over 2 percent in New York, with West Texas Intermediate for October delivery dropping to $44.95 a barrel at 10:30 a.m. London time.
Bank of Japan stimulus
More than a third of economists surveyed by Bloomberg see the Bank of Japan opting to expand its stimulus at its October meeting as the central bank struggles to raise inflation in the economy. One way the bank could add stimulus would be to increase the amount of ETFs it is authorized to purchase. The bank has already used much of its 3 trillion yen ($25 billion) allowance fighting recent volatility in the market, meaning that it must slow down purchases for the rest of the year.
Copper prices are in turnaround mode, with the industrial metal headed for its biggest weekly increase since May boosted by Glencore's announced production cuts in Africa this week. Prices for the commodity have risen 5.4 percent this week.
EU opposition ends merger
TeliaSonera AB and Telenor ASA scrapped the planned merger of their Danish telecoms businesses following opposition from EU Competition Commissioner Margrethe Vestager. As this is the first deal to land on Vestager's desk since she was appointed as commissioner, the decision is being viewed as a setback for the entire European telecoms market where carriers are seeking tie-ups to reduce costs. Telecoms are among the biggest losers in the Stoxx Europe 600 Index this morning following the decision.
Italian industrial output jumps
Industrial output in Italy rose the most in a year, jumping 1.1 percent in July, ahead of the median estimate of economists surveyed by Bloomberg which called for a 0.8 percent increase. With the Italian economy continuing to struggle for growth, it seems that Prime Minister Matteo Renzi is betting that housing could be key to any improvement. Bloomberg News calculations show that real estate is the component of GDP whose weighting has risen the most since 2007, with Renzi's promise to abolish a controversial tax on first homes in 2016 set to boost that further.
What we've been reading
This is what's caught our eye over the last 24 hours.
- Volatility in the S&P 500 passes that in small cap stocks.
- The Federal Reserve faces the same currency threat that doomed ECB and Aussie hikes.
- Europe urged to take the lead on climate change deal.
- Walmart suppliers are finally fighting back.
- Greece, the world's best investment. No joke.
- Fossils from a new human relative species found in South Africa.
- MIT researchers' (relatively) cheap fusion reactor.
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