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03/11/2016

Weekly News Bites: Bouncing off the wall

Our top picks from this week's Morning Chat

Bouncing off the wall: Facebook smashed through expectations on revenue as it gains mastery in monetising an increasingly mobile audience. Its expertise comes at a perfect time. October was the first month ever when more web pages were viewed on mobile and tablet devices than on desktop and laptop computers. Moreover, experts have little doubt the next billion new internet users will have their first taste on a smartphone. (03/11)

Safety in numbers: Donald Trump has taken the lead in the highly respected ABC/Washington Post US presidential poll, one point ahead of Hillary Clinton (46% to 45%). Just over a week ago, he had been trailing by 12%, and was written off. This surge in Trump support is causing a reassessment of risk assets and safe havens: the S&P 500 closed down last night for the eighth time in nine days; gold is nearing the $1,300 mark again; the Japanese yen and Swiss franc are up, while the Mexican peso is down. We can assume the incumbent FBI director will not be keeping his job in a Clinton victory scenario.  (02/11)

Record Sigh: Three weeks ago, the FTSE 100 closed within a whisker of its record high. In the 16 trading days since, it had not moved by more than 1% in any direction... until last night. Suddenly, the index is 4% from its peak, and trepidation abounds. Part of the story lies with oil prices; already pressured from a thawing “production freeze”, they fell into the mid-$40s on a record increase in US inventories. Another part centres on the US election; let’s just say Democratic nominee Hillary Clinton has stopped short-listing Cabinet appointments for now. (03/11)

Hitting a six, then out: Bank of England Governor Mark Carney put to rest fevered speculation on his future by announcing he will leave his post in June 2019. While less than the usual eight-year term for governors, his six-year eventual stint will take him through the thick of the "Brexit" negotiations. Sterling rose to above $1.22 after his decision was publicly confirmed; clearly he is considered a safe pair of hands. Still, in the context of the year, yesterday's rise is imperceptible: the pound is the worst-performing major currency in 2016, down 17% versus the US dollar. (01/11)

Continental drift: Eurozone economic growth remained steady at 0.3% in the third quarter. Furthermore, annual inflation rose to 0.5% in October, the highest since June 2014. While both figures were roughly in line with expectations, probably the best thing that can be said is they are both above zero, an almost acceptable platitude these days. Positive numbers notwithstanding, the leaden pace of growth will not threaten Europe's double-digit unemployment rate; and current inflation is mostly the bad, "cost-push" kind. (01/11)

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