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Sterling falls on negative inflation; world stocks slump on weak Chinese data

News Date: 13/10/2015 10:19:16
 

 World stocks fell on Tuesday as weak Chinese trade data came out, showing a weaker-than-expected drop in imports.

 

As of 13:30 GMT, Britain's lead index FTSE 100 fell 67 points, or 1.05% to 6,304. Germany's DAX fell 177 points, or 1.75% to 9,942. France's CAC 40 fell 85 points, or 1.82% to 4,603.

 

 

U.S. stocks fared a little better but was still down, with the Dow Jones index falling 69 points, or 0.40% to 17,062. NASDAQ fell 16 points, or 0.35% to 4,822. S&P 500 fell seven points, or 0.37% to 2,010.

 

Sterling fell sharply on Tuesday after the release of British CPI report, showing inflation has turned negative again, posting -0.1% in September y\y. Forecasts expected inflation to stay unchanged at zero. The weak data reinforces views that Bank of England won't raise interest rates any time soon, prompting investors into selling the Pound.

 

Against the Dollar, Sterling fell 0.90% to 1.5211, after rising earlier to 1.5394. Against Yen it fell to 182.23. Against Euro it fell to an eight-month low at 0.7476.

 

The Euro was wobbly today, as German Final CPI report came out showing a drop of 0.2% in September. Germany's Wholesale Price Index (WPI) fell 0.6% m\m, against a forecast of a 0.3% fall. Another piece of bad German news came with the crucial ZEW economic sentiment, a survey of German investors intended to measure the health of the economy. It posted a result of 1.9, compared to last month's 12.1 result. Forecasters expected a smaller drop to 6.8. A reading above zero indicates optimism, below zero indicate pessimism.

 

Euro fell from three-weeks high against the dollar, it was still up for the day at 1.1362. Against Yen it fell for the second day to 136.13.

 

Crude oil fell earlier but then recovered slightly. Brent oil was last at $50.37 a barrel, up a few cents from yesterday. U.S. oil traded at $47.70 a barrel, up 30 cents for the day.

 

Spot gold was largely unchanged from yesterday at $1,164 an ounce. Silver rose 0.60% to $15.95 an ounce.

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