A much-welcomed rally the past couple of days to end the traditionally torrid month of October. A final push today moved indices further away from their recent lows, but remain well down for this month. Optimism remains absent with Novembers planned US/China talks on trade still questionable as being included as part of the discussions! Trade talks have earned the titled cause for these declines, but the data has been weak for a while as today manufacturing growth testifies. This evening we are seeing the Yuan drift weaker yet again and now plays comfortably around the 6.9775 level. Irrespective of reasoning we did manage to see a positive end to the month with all core rallying on the day. The Shanghai managed 1.35% today and with Hang Seng adding 1.6% for the day. The Nikkei managed +2.16% having seen an unchanged BOJ and with added value helping prices into the close. The Yen has been losing momentum for a while now and even trailed when the flight to quality was expected. Trading back with a 113 handle the Yen is starting to look heavy for year-end. The INR is back on its downward slope trading back with a 74 handle again. Losing 0.6% today it did, however, assist to lift the SENSEX for those that are still prepared to put money to work ahead of year-end. The SENSEX recovered from negative territory in morning trading and with the help of the currency added 1.63% by the close of the day.

Core European markets rallied following Asian confidence and were all over 1% firmer by the US opening. Interesting that the Euro has been weak all day and has appeared to struggle ever since Sunday vote and Merkel decision on Monday. GBP was also weaker at the open but managed a +0.45% bounce on the news that a BREXIT deal could be unveiled within three weeks. Meanwhile, the decline in the Euro breaching the 1.13 figure is starting to weigh on Sterling’s fun even following better than expected inflation data. Both the FTSE and DAX managed a 1.35% rally whilst the CAC outperformed all other core with a 2.3% rally. Interesting that the FTSE MIB only managed a +0.3% increase whilst the BTP’s tightened 5bp to 3.42%. Still does not look too good for Italy and yet to hear additional news on the budget. Gold has been losing ground the past two days as stocks bounced. This could also be currency depreciation for international investors, but isn’t that impressive a price action – still looks negative.