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Daily Scan: Equities rip higher; Bank of England 'ringfences' banks
Updated throughout the day
Good evening everyone. SOE consolidation hopes, stimulus wishes, and a spooked-out Fed led Asian shares soaring today with the Hang Seng Index up 2%, the Shanghai Composite up 2.32%, and the Nikkei 225 up 1.15%.
European indices meanwhile appear to be on the up and up as well. The U.K.’s FTSE 100 has so far climbed 0.8%, Germany’s DAX has jumped 0.9%, and France’s CAC has surged 0.9%. As for Wall Street, it looks like they’ll be joining the party too. S&P 500 futures are pointing to a 0.5% pop at the open while Dow and Nasdaq futures signal a 0.5% and 0.6% climb respectively.
Here’s what else you need to know:
Bank of England lays out “ringfencing” laws. In an effort to strengthen the U.K. financial system, the Bank of England laid out two proposals today, one on ringfencing and one on operational continuity. Under the former proposal, “ringfenced” banks will need to seek permission from the BOE to pay out dividends to its affiliates, as well as pay market rates for services rendered by its partners. The new rules will come into force in 2019. Wall Street Journal (paywall) / Bank of England
PBOC injects liquidity. With 70 billion yuan worth of liquidity set to drain this week, the People's Bank of China topped up the money markets today through an auction of 50 billion yuan worth of seven-day reverse bond repurchase agreements. Reuters
Hong Kong continues reign as most expensive place to rent office space. Annual Hong Kong office rent has apparently reached $255.5 per square foot, $5 more than last year’s showing, and easily eclipsing New York’s $153 and Tokyo’s $125. The pace of growth however has appeared to slow, but yeah, tell that to the tenants. SCMP (paywall)
Australian jobs surprise to the downside. After registering gains the previous four months, the Australian labor market lost 5,100 jobs in September, a huge contrast to the additional 9,600 jobs expected by analysts. Financial Times (paywall)
Bank of Korea keeps rates steady, slashes outlook. As expected, Korea’s central bank kept interest rates steady for the fourth month in a row. It did however, cut its GDP and inflation forecasts, with 2015 growth now expected to be 2.7% instead of 2.8%, while inflation is currently pegged at 0.7% instead of 0.9%. Bank of Korea
Sumitomo Mitsui Banking to issue green bonds. In a first for a Japanese megabank, SMBC is set to issue around $500 million worth of green bonds as early as today, with the proceeds meant to bankroll a variety of renewable energy projects. The five-year bonds are expected to carry a coupon of around 2%. Nikkei Asian Review
Volkswagen loses designated North American chief. Winfried Vahland was named to run the North America business three weeks ago after working for the car manufacturer for 25 years. Vahlan