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Weekend Scan: Risk on pushes major bourses higher; Europe's refugee crisis worsens

By NexChange
Capital Markets

October 17, 2015

Good day.

Major world stock markets enjoyed strong gains throughout the week, closing at two-month highs on Friday. Investors absorbed a raft of quarterly earnings announcements in the US which in the end contained few negative surprises. Earlier caution gave way to confidence, boosting share prices on most global bourses.

China A-shares were the stellar performer, surging more than 6% during the week on hopes of further stimulus measures. The same expectation in Japan too pushed the Nikkei 225 index over 3% higher.

For a change, traders also turned their attention away from speculation about US interest rates and instead were encouraged by hints from European Central Bank (ECB) officials that they would inject more liquidity into a still moribund European economy.

The prospect of further ECB quantitative easing provided support for the US dollar against both the euro and the yen. Meanwhile, oil prices staged a rally as traders covered short positions

Stocks in major world markets rose to a two-month high on Friday and the dollar ticked up, boosted by views that the European Central Bank may provide more stimulus to the euro zone economy.

Here’s what else is happening in the world:

Hungary closes its border with Croatia to stem migrant flow. Europe’s refugee crisis continues with Hungary erecting razor wire fences against the tide of hapless people escaping from worn-torn Syria and Iraq. Hungary has been the gateway to their transit to Germany and Austria, and Croatia says it will now direct them to Slovenia instead. BBC

Palestinian-Israeli fighting ignites again. After weeks of  fighting between Palestinians and Israeli soldiers that has claimed several lives, a group of Palestinians set fire last night to a compound housing Joseph's Tomb, a Jewish religious site in the West Bank. Both Palestinian and Israeli authorities condemned the act.

UN corruption scandal. A US judge set bail at $50 million for Ng Lap Seng, a Macau property tycoon, accused of orchestrating an alleged bribery scheme involving United Nations officials. Prosecutors want to keep him in jail and are considering an appeal because they consider him a flight risk. WSJ (paywall)

Europe and Russia plan trip to assess settlement on the Moon. European and Russian space agencies intend to send a robotic lander to the Moon's South Pole to determine the feasibility of permanent settlement. It is not a sci-fi fantasy. Luna 27 will embark in five years’ time and the project’s scientists are confident that in future this largely unexplored area will be an outpost of human civilisation. BBC

Barclays plans further investment banking job cuts. The new chief of the UK lender Jes Staley plans to speed up reductions in staff levels in its troubled investment banking business and focus on its “core markets”. Does that mean more branches on UK high streets or simply slashing the wage bill? Financial Times (paywall)

Goldman Sachs fires cheating analysts. About 20 analysts have been fired from Goldman's New York and London offices for cheating on internal tests. The tests are firm specific, and not regula

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