U.S. avoids default, the yuan strengthens the most since 2005 and more troubles at Valeant. Here are some of the things people in markets are talking about this morning.
U.S. budget passed
In the early hours of Friday morning Congress passed a two-year bipartisan budget plan, meaning a debt default on Nov. 3 will be avoided. With some details still to be ironed out the deal diminishes, but does not eliminate, the chances of a government shut-down ahead of current funds expiring on December 11.
Valeant cuts ties with Philidor
Valeant Pharmaceuticals International Inc. has said that it will terminate its relationship with Philidor Rx Services. The decision comes after Bloomberg News reported that Philidor altered doctors’ prescriptions to wring more reimbursements out of U.S. health insurers. Valeant has lost almost $10 billion in market value after a Wall Street short-seller suggested the company was using Philidor to engage in Enron-style accounting practices. John Hempton, a hedge fund manager who has also long been critical of Valeant, thinks the company will likely now face litigation.
The yuan has risen the most since China scrapped a dollar peg in 2005, closing 0.62 percent higher according to China Foreign Exchange Trade System prices. The move higher comes after the People's Bank of China said it will consider a trial program that would ease capital controls in the Shanghai free trade zone. The program is being seen as another step in China's efforts to have its currency included in the International Monetary Fund’s reserve-currency basket.
BOJ Governor Haruhiko Kuroda and his fellow board members defended their decision not to add further stimulus to the Japanese economy, blaming the slide in oil prices for their continued failure to reach the bank's inflation goal. Tokyo's Topix index rose 0.7 percent to cap its best monthly gain in two years as investors decided to focus on a report that the government is considering extra fiscal stimulus instead.
Euro-area inflation rises to zero
Eurostat's flash estimate of inflation for October showed a rise to 0.0 percent from last month's -0.1 percent. Very low inflation in the euro-area is still being largely driven by energy, with that sub-index showing an annual decline of 8.7 percent this month. Unemployment decreased to 10.8 percent in September from a revised 10.9 percent, the statistics agency said in a separate release.
What we've been reading
This is what's caught our eye over the last 24 hours
- Seven key facts about the world's biggest IPO this year.
- The hedge fund that returned 70 percent as China's markets tanked.
- Europe's last dictator has become the darling of the bond market.
- Glencore's crisis hurts most those who have the least.
- Chinese families can have two children, but can they afford them?
- The Benchmark Podcast: The U.S. government's $18 trillion debt problem.
- On the trail of China's real NPL level.
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