Market Update

Posted on 29 October 2008 by Drew

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Growing expectations of a rate cut by the Fed saw the markets have a better day yesterday. The UK, along with other European shares, have risen sharply in early trading,  fueled by growing expectations of imminent rates cuts by the Bank Of England and the ECB.

Nikkei  - (up 7.7%) on the back hopes of a rate cut both domestically & in the US.
Hang Seng  - (up 0.84%)  
Sydney - (Up 1.34%)
Dow Jones (up 10.88%)
The FTSE is up  191.49 so far this morning.
 
The result of the Fed's meeting will be announced later today, but a 0.5% reduction to 1% is the predicted outcome.
 
Hungary becomes the latest country to receive international assistance, with a rescue package by the IMF, the EU and the World Bank  totalling $25billion (£15.6billion). It follows similar measures taken by the IMF to prop up the economies of Ukraine and Iceland. They are also in talks with Pakistan and Belarus.
 
The FSA has said that the number of  repossessions has climbed sharply, with the no. of cases in the second quarter of the year 11,054, up 71% compared with a year earlier.  The number of borrowers who have fallen into arrears for at least three months has also been rising and cases are up 16% on a year ago.   
 
The Bank Of England has revealed that the number of mortgages approved for house purchases rose for the first time in a year, with 33,000 home loans  approved in September, a rise of 1,000 compared with the record low of the previous month.
 
JP Morgan has suggested that the Bank Rate could fall as low as 1.25%.
 
Swaps didn't do a lot yesterday (again). Overnight Libor slipped by 3bps and the mighty 3 Months Libor came down by 2bps as more tracker margins are increased.

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