US stocks erase loss as Fed’s Bullard suggests more QE

US  stocks recovered from early losses as St. Louis Federal Reserve Bank President James Bullard said policy makers should consider delaying the end  of  bond  purchases  to  halt  the  decline  in  inflation  expectations.  The S&P 500 Index ended up 0.27 point (less than 0.1%) at 1,862.76. The Dow slipped 24.5 points to 16,117.24.

Bullard says Fed should consider delay in ending QE

The Fed should consider delaying the end of its bond-purchase program to halt  a  decline  in  inflation  expectations,  said  St.  Louis  Federal  Reserve Bank  President  James  Bullard.  Bullard  said  US  economic  fundamentals remain  strong,  and  he  blamed  recent  financial-market  turmoil  on downgrades in the outlook for Europe.  “That’s an important consideration for a central bank. And for that reason I think that a logical policy response at this juncture may be to delay the end of the QE,” he said.

Factory production rebounds as US sustains expansion

Production at American factories rebounded and households held the most optimistic  views  in  two  years,  signs  the  world’s  largest  economy  is overcoming  a  global  slowdown.  Manufacturing  output  climbed  0.5%  in September  from  a  0.5%  drop  in  August,  as  factories  pushed  out  more computers, appliances and building-supplies, according to  Fed  data.  The median forecast in a Bloomberg survey of 80 economists called for a 0.4% rise in total production.

Jobless claims in US unexpectedly decrease to 14-year low

Applications  for  unemployment  benefits  in  the  US  unexpectedly  dropped last week to their lowest level in 14 years as employers avoided trimming staff  even as global growth weakens. Jobless claims decreased by 23,000 to 264,000 in the week ended Oct. 11, a Labor Department report showed. The  median forecast of 49 economists surveyed by Bloomberg projected the number of claims would increase to 290,000 last week.

ECB said to agree legal texts for covered-bond purchase plan

The  ECB  agreed  on  the  legal  framework  for  its  covered-bond  program, bringing  it  a  step  closer  to  asset  purchases  designed  to  help  boost inflation. The ECB’s Governing Council signed off on two acts that officially establish  the  measure  and  lay  out  how  it  will  be  implemented.  ECB President Mario Draghi set the end of this month as the deadline for the covered-bond  component  of  a  larger  asset-purchase  plan  designed  to combat weak growth and inflation in the 18-nation euro-area.

Indonesia loan growth slumps to seven-year low on economy

Indonesia’s  rupiah-loan  growth  cooled  to  13.5%  yoy  in  August,  the  least since  2007,  weighed  down  by  an  economic  slowdown.  The  rupiah  loan balance, which makes up 85% of Indonesian bank credit, also fell by 2.2trn rupiah (US$180mn) sequentially, the first decline since January. However, foreign-currency loans increased 12% in rupiah terms, trailing the rupiahdenominated growth rate.

WTI oil rebounds after dipping below US$80, Brent rises

WTI rebounded after falling below US$80 for the first time since June 2012 on speculation prices decreased more than justified. Similarly,  Brent crude also climbed from the lowest level in almost four years. Brent for November settlement increased US$0.69 to end the session at US$84.47 a barrel.

Source: Bloomberg