Bitesize Global Overview… Oct 22nd 2012

Equity markets gain – Equity markets rebounded from the previous week’s losses after upbeat economic data, good earnings results and a statement from Moody’s regarding Spain’s credit rating.

US economic data – US housing starts well exceeded economists’ forecasts, after jumping to an annual rate of 872,000 in September. With building permits also increasing, these gains may be sustainable. Elsewhere, retail sales rose strongly, while industrial output also rose, both of which topped forecasts.

European regulation – EU leaders agreed on a timetable to introduce common regulation of the euro area’s 6,000 lenders by January. The 27 member states decided to put the framework for a single regulator in place by the end of this year.

Currencies – On currency markets, stronger-than-expected economic data boosted the demand for higher-yielding currencies over the week. The €/$ rate strengthened slightly to end the week at €1.30.

Oil – Despite the forecast-beating economic reports released during the week, the West Texas oil price fell overall, partly attributed to some disappointing quarterly earnings and sales forecasts, raising concern that slowing economic growth will reduce oil demand. The price fell 2%, to $90 a barrel, over the week.