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HKECIC Weekly Market News
4 November 2019
 
 
 
 
Market Snapshots
Asia and Australasia
Japan: Retail sales grow at the fastest pace since 2014
According to the Ministry of Economy, Trade and Industry, Japan’s retail sales increased 9.1% yr/yr in September, compared to a growth of 1.8% in August. Retail sales posted the strongest growth in over five years ahead of the sales tax hike, which rose from 8% to 10% on 1 October, which also raised concerns that consumer spending could pull back in the coming months. The surge in retail sales was boosted by car sales, household durables such as refrigerators, computers and TV, cosmetics, food and clothing. A separate report from the Ministry showed that Japan’s industrial production showed an improvement in September. Output grew 1.1% yr/yr in September, reversing a 4.7% contraction in August. But the ministry is keeping its assessment of the data unchanged, describing it as weak, as growth was seen only in limited industries.
Europe
UK: EU grants Brexit flexible extension until 31 January 2020
Last week, the European Union (EU) agreed that it would accept the UK’s request for a Brexit flexible extension until 31 January 2020, with an option for the UK to depart earlier if a Brexit deal is ratified. UK Prime Minister Boris Johnson has accepted the EU’s offer and subsequently brought forward a bill in UK to hold an early general election. Johnson hopes the election would give him a fresh mandate for his Brexit deal and break the current Parliamentary deadlock, which has led to the UK’s exit being delayed. The early election bill was subsequently approved by two houses of Parliament and the general election is set to be held on 12 December 2019.
North Amercia
US: Fed cuts interest rates for third time this year
The Federal Reserve has lowered its benchmark interest rate by 25 basis points for the third time this year to a target range of between 1.5% and 1.75% at its October meeting, amid ongoing trade tensions and gloomy global economic outlook. In a post-meeting statement, the Federal Open Monetary Committee said the rate cut can sustain the expansion of economic activity, strong labor market conditions, and inflation near the 2% target, but uncertainties about this outlook remain. Fed Chair Powell signaled that rate cut has likely come to an end as he said the current stance was appropriate. On US economy, it grew at an annualized rate of 1.9% in Q3, down slightly from the 2.0% pace in Q2, according to the initial estimate from the Department of Commerce.
Latin America
Argentina: Alberto Fernandez declares victory in presidential election
Centre-left opposition candidate Alberto Fernandez has been elected as President of Argentina with 47.79% of the votes, ahead of Mauricio Macri's 40.71% and avoided a second runoff. Fernandez will meet with the outgoing President Macri to discuss an orderly transition, seen as essential for Argentina’s weak economy and markets. Separately, Argentina’s central bank imposed further capital control restricting US Dollar purchase per month for individuals to $200 via bank account and $100 in cash until December, a sharp tightening from the $10,000 limit imposed in September as part of the measures to defend the local currency.
      
 
 
  Corporate News  
  Apple Inc., (NYSE: AAPL) has announced its financial results for its fiscal 2019 fourth quarter ended 28 September 2019. The group posted quarterly revenue of US$64.04 billion, an increase of 2% from last year, and quarterly earnings per diluted share of US$3.03, up 4%. CEO Tim Cook attributed the record-high Q4 revenue to the accelerating growth from Services, Wearables and iPad segments.  
 
 

 
 
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