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(Reuters) – World stocks inched up and U.S. bond yields steadied after almost three weeks of gains on Tuesday with Federal Reserve policy setters expected to end six years of aggressive monetary stimulus.

The Fed kicks off a two-day meeting later with markets betting on an announcement that it will stop its post-financial crisis high-intensity asset buying and reinforce that a softly-softly approach will be taken to raising rates.

With the euro zone running into turbulence again and China’s giant economy also struggling for pace, the prospect of a world without U.S. stimulus has troubled markets over the last couple of months, but they finally seem to be getting used to the idea.

European shares rose for the fourth time is six days, helped by better-than-expected results from pharmaceutical group Novartis and Swiss bank UBS, while the dollar, commodity markets and U.S. bond yields steadied.

“I think in the last few days we have had a reality check,” fund management group Hermes’ chief economist, Neil Williams, said. “The world is certainly not a happy place at the moment but it hasn’t got that much worse in recent weeks.”

“I’m expecting the Fed to re-assert its dovishness, they haven’t come this far including six years of QE (quantitative easing) to end it abruptly and leap towards a rate hike.”

London’s FTSE, Germany’s DAX and France’s CAC were up 0.5, 1.2 and 0.4 percent respectively and the euro, the pound and benchmark German government bonds all traded around recent levels.

Gold also recovered its footing after falling to its lowest in nearly two weeks, while emerging market stocks, which are also seen as vulnerable from reduced U.S. and global stimulus, rose 0.7 percent as hopes of more reforms of state-owned business saw Chinese stocks jump 2 percent.

CROWN SLIPS

Sweden’s crown slid to a four-year low against the dollar and a four-month trough against the euro after the country’s central bank, the Riksbank, surprised markets with a cut in interest rates to zero.

Most analysts had forecast that the bank would lower its main interest rate, the repo rate, to 0.1 percent from 0.25 percent to fight the risk of deflation. But it went a step further and forecast an even lower rate path for the future.

“Reading between the lines, it looks like Riksbank will keep rates low… This will weigh on the Swedish crown, with most losses likely to come against the dollar,” SEB’s chief currency strategist in Stockholm, Carl Hammer, said.

In Asia, MSCI’s broadest index of Asia-Pacific shares outside Japan added about 0.4 percent but Japan’s Nikkei dropped 0.4 percent after disappointing results from Canon offset positive retail sales data.

In the United States, data on Monday had been far from encouraging.

Services sector activity slowed in October to a six-month low, while manufacturing output in Texas decreased, providing more evidence that the Fed is likely to take things slowly in the coming months.

The dollar index, which tracks the U.S. unit against six major rivals, inched up about 0.15 percent in Europe to 85.629 as early Wall Street futures prices pointed to a solid 0.4-0.5 gain for stocks later.

Among commodities, U.S. crude was flat at $81.04 per barrel after dropping as low as $79.44 on Monday, its lowest level since June 2012, after Goldman Sachs cut price forecasts.

Brent crude shed 0.2 percent to $85.65, as concerns about weak global demand and ample supply kept a cloud over the market though growth-attuned metals — copper, nickel and aluminium — continued their recent rebound.

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This material does not constitute an offer or invitation to anyone in any jurisdiction to invest in any Credence Ltd. product or use any Credence Ltd. services where such offer or invitation is not lawful, or in which the person making such offer or invitation is not qualified to do so, nor has it been prepared in connection with any such offer or invitation. The material is not intended for distribution to retail clients.

Unless otherwise specified, Credence Ltd. is the source of all data. All information contained in this material is current at the time of issue and, to the best of our knowledge, accurate. Any opinion expressed is that of Credence Ltd., is not a statement of fact is subject to change and, unless it relates to a specified investment, does not constitute the regulated activity of “advising on investments”.

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Central bank’s head, Janet Yellen, confirms cessation of buying bonds in October after injection of £4.5 trillion over five years.

The US Federal Reserve has called time on its $4.5 trillion (£2.8tn) quantitative easing programme, introduced more than five years ago to steer the world’s largest economy through the financial crisis.

The central bank, led by Janet Yellen, said it would cease buying bonds this month.

Announcing the decision made at its October policy meeting, the Fed said: “The committee judges that there has been a substantial improvement in the outlook for the labour market since the inception of its current asset purchase programme. Moreover, the committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability. Accordingly, the committee decided to conclude its asset purchase program this month.”

It brings to an end the programme which marked a radical departure for US monetary policy, hugely swelling the Fed’s balance sheet in a bid to prop up a battered financial system.

The Fed began to slow its purchase of Treasury bonds and mortgage-backed securities in January, but until now it had not confirmed an end date. The central bank has steadily reduced its monthly bond purchases from a peak of $85bn a month to $15bn a month.

Despite the end of its bond-buying programme, US monetary policy remains ultra-loose, with an interest rate range of between zero and 0.25% since December 2008.

Credence Independent Advisor was set up to be compelling for all its stakeholders; including clients, staff and owners of the business. We offer a compelling experience to our clients that delivers what they desire. We strive to fully understand our clients’ financial requirements by remaining in close communication with them over the entire span of the relationship. We endeavor to provide our clients with a financial educational framework which supports them in their investment decision making process, helping them to achieve their financial goals. We align our interests along with those of our clients to ensure the development of a long and fruitful relationship.

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Economists expect Bank of England’s quarterly health check of the UK economy to rubber stamp expectations that interest rates will remain low for longer.

Interest rates will remain on hold beyond next year’s general election; the Bank of England is expected to signal this week, in an environment of lower inflation, weak wage growth and increasing eurozone headwinds.

Economists expect the Bank’s latest Inflation Report to highlight a risk that price rises, as measured by the consumer prices index (CPI) could fall below 1pc at the beginning of 2015, from September’s five-year low of 1.2pc.

According to the Centre for Economics and Business Research (CEBR), the recent decline in oil prices to $83 a barrel from $115 in June will push CPI inflation down to 0.5pc by next June. Douglas McWilliams, chief executive of the CEBR, said if prices fell to $60 a barrel, headline inflation could turn negative.

If inflation dips below 1pc, Mark Carney, the Governor of the Bank of England, will have to write an open letter to the Chancellor explaining the fall and how policymakers will ensure that inflation returns to the Bank’s 2pc target.

Alan Clarke, a strategist at Scotiabank, said it was very likely this could happen before the end of this year. “Last December, we had a 6.5pc increase in gas and electricity prices, that’s not being repeated this year, so that will push inflation down by 0.3 percentage points.

Coupled with that you’ve got Sainsbury’s recent decision to cut 1,200 prices and mild autumn weather pushing down on clothing prices. All in all, if they forecast sub-1pc inflation they’re conceding that Carney’s going to have to write a letter and the market will push back the first hike even more than it already has done.”

In June, Mr. Carney said the decision surrounding the timing of the first rate increase “could happen sooner than markets expect”, prompting traders to price in a November rate hike. However, an oil glut, the slowdown in the eurozone and falling inflation means markets now expect the Bank to raise rates in August 2015, well after May’s election.

Andrew Haldane, the Bank of England’s chief economist, said in a speech last month that a “gloomier” global outlook and lower inflation suggested that policymakers could afford to keep interest rates lower for longer.

Official data show pay growth still catching up with price rises

The Deputy Governor, Sir Jon Cunliffe, said in a separate speech that with interest rates already at a record low of 0.5pc, dealing with an inflation spike would be “more manageable” than raising rates too early and having to change course.

However, Martin Weale, an external rate setter who has voted to tighten monetary policy for the past three months, has argued that the Bank should “look through” the current drop in inflation because it is driven by forces that are beyond the Bank’s control, as the Monetary Policy Committee did in 2008, when price rises spiked to 5.2pc.

Simon Wells, chief UK economist at HSBC and a former Bank economist, said pay growth would remain in focus for the nine rate-setters. “The first quarter of 2015 is an important time for pay settlements, and if pay surveys continue to suggest starting salaries for new recruits and vacancies are rising and we start to see wages pick up, that would be the signal for me that this economy can withstand a rate rise”.

The Confederation of Business Industry expects the UK economy to expand this year at the fastest pace since before the financial crisis. Britain’s biggest business lobby group expects growth of 3pc in 2014, which would match the expansion in 2006. Growth is then expected to slow to 2.5pc in 2015.

The forecasts were unchanged from its September forecasts, despite renewed fears of a triple dip recession in the eurozone. “The recovery is on firm ground and is becoming more ingrained,” said John Cridland, the CBI’s director general.

Credence Independent Advisors are always on the lookout for top quality professionals that want a long term career in financial services. Whether from Investment banking, Wealth Management or financial planning background if you would like to be with a firm with a compelling client and advisor proposition.

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Source: http://credence-wealth.com/strong-dollar-squeezes-commodities-boj-puts-onus-on-ecb/

(Reuters) – The U.S. dollar powered to seven-year peaks against the yen on Monday and a two-year high on the euro, a punishing trend for commodities priced in dollars as gold, silver and oil all fell.

Disappointing surveys out of China’s manufacturing and services sectors highlighted the relative health of the U.S. economy, and piled pressure on other countries to ease monetary policy yet further.

The dollar came within a whisker of 113.00 yen in early trade, before taking a breather at 112.72. It has climbed over 3 percent since the Bank of Japan stunned markets by doubling down on its already massive stimulus programme.

The bold move has raised expectations the European Central Bank will eventually have to bite the bullet on quantitative easing, even if not at its meeting on Thursday.

“In this environment of subdued growth and long-term low-flation, we expect the ECB to announce the purchase of government bonds of euro area member states by early next year at the latest,” said Apolline Menut, an analyst at Barclays.

That outlook is one reason the euro caved to a fresh two-year trough of $1.2444, and why the dollar reached levels not seen since mid-2010 against a basket of currencies.

While Tokyo stocks were enjoying a holiday after Friday’s 4.8 percent surge in the Nikkei, shares across Asia were consolidating their gains.

MSCI’s broadest index of Asia-Pacific shares outside Japan dipped 0.5 percent from a five-week high, but most regional markets were a shade firmer.

In Europe, the FTSE, DAX and CAC 40 were all seen opening with minor changes.

On Wall Street, both the Dow Jones industrial average and the S&P 500 index had notched record closing highs on Friday. The Dow gained 1.13 percent and the S&P 500 1.17 percent.

CHINA DATA UNDERWHELMS

Sentiment in Asia was somewhat tempered by a survey showing China’s services sector grew at its slowest pace in nine months in October as a cooling property sector weighed on demand.

That followed an unexpected dip in China’s factory activity to a five-month low in October, underlining the uncertain outlook for world’s second biggest economy.

Still, the prospect of further policy stimulus helped support stocks and Shanghai gained 0.5 percent.

The soft data knocked almost a full cent off the Australian dollar, which is often used by investors as a liquid proxy for bets on China.

Yet the allure of Australia’s relatively high yields has only been burnished by the BOJ’s actions and lifted the Aussie to its highest on the yen since May last year.

Indeed, by announcing it would buy more longer-dated bonds and thus push down already threadbare yields, the BOJ is clearly trying to force Japanese investors to seek higher returns in riskier assets, both at home and abroad.

The rush out of yen was given more impetus by news that Japan’s $1.2 trillion (751.54 billion pounds) Government Pension Investment Fund will raise its holdings of foreign stocks to 25 percent, well above some analysts’ expectations.

In contrast, U.S. Treasury yields ended higher last week after the Federal Reserve wound down its bond buying campaign against a generally improving economic background.

In a data-packed week, the US’s ISM index of manufacturing activity due later o Monday is expected to hold at a relatively healthy 56.2 in October. The October payrolls report on Friday is forecast to show a solid increase of around 231,000 new hires.

In commodity markets, gold was pinned near its lowest since 2010 at $1,168 an ounce, as was silver at $15.87.

Brent oil slipped another 23 cents to $85.63 a barrel, while U.S. crude lost 36 cents to $80.18.

Credence Independent Advisors was born from a compelling opportunity in the financial services world. In the ever changing dynamic world of financial services, it is important for us to tailor advice and solutions to individual needs. Our business was set up to be compelling for all its stakeholders; including clients, staff and owners of the business. Please visit us our News site at credenceadvisors-news.com and to our Blog site at credenceadvisors-blog.com

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We are always on the lookout for top quality professionals that want a long term career in financial services. Whether from Investment banking, Wealth Management or financial planning background if you would like to be with a firm with a compelling client and advisor proposition please emails us at careers@credence-wealth.com.

 About Us

Credence Independent Advisors was born from a compelling opportunity in the financial services world. In the ever changing dynamic world of financial services, it is important for us to tailor advice and solutions to individual needs. Clients need solutions that make them money and preserve their capital and advisors need happy clients with increasing wealth under management. By harnessing the skills of top quality experienced professionals and cutting edge technology, we are able to bring what was previously only available for multi-million dollar clients to a wider reaching client range and we have done this independently.

Why Us

Our business was set up to be compelling for all its stakeholders; including clients, staff and owners of the business. We offer a compelling experience to our clients that deliver what they desire. We strive to fully understand our clients’ financial requirements by remaining in close communication with them over the entire span of the relationship. We endeavor to provide our clients with a financial educational framework which supports them in their investment decision making process, helping them to achieve their financial goals. We align our interests along with those of our clients to ensure the development of a long and fruitful relationship.

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Tier 1 (Investor) Visa Portfolio Management

The UK Border Agency offers the opportunity to apply for a Tier 1 (Investor) Visa which can lead to British Citizenship for those who want to make a substantial financial investment in the UK.

When you invest with our Tier 1 (Investor) Visa Service, we will manage an investment portfolio for you, within the investment restrictions of the program, in line with your investment objectives. This is a discretionary service which allows you to concentrate on your other priorities while we have the responsibility for the day-to-day management of your investment portfolio.

You can meet and liaise with your own investment manager to build your personal investment strategy and create and monitor a portfolio to accommodate your specific needs that reflect your objectives and risk profile, while complying with the investment restrictions of the visa program.

Kareem Sattar joined Credence in 2014 as Investment Director and brings with him over 10 years of experience within the financial services industry. All of which have been spent in developing wealth management strategies for high net worth individuals and families.

Kareem advises on a broad range of financial matters including, Investment, sophisticated tax planning, pensions and retirement, financial protection, inheritance tax mitigation and investor visa portfolio management.

Prior to joining Credence, Kareem held positions with Walker Crips Stockbrokers, HSBC and Lloyds Banking Group. As a holder of the Chartered Wealth Manager designation from the Chartered Institute for Securities & Investment, Kareem is recognised as being at the pinnacle of his profession. His numerous qualifications include the Private Client Investment Advice and Management (PCIAM) qualification from the CISI and the Chartered Insurance Institutes Diploma in Financial Planning (DipPFS.)

Kareem can be contacted at: Phone: +971 56 659 1934

Email: kareem.sattar@credence-wealth.com

Jamil Al Maani is a Investment Director at Credence and has over 10 years of investment specialist knowledge within the wealth management sector. He holds the prestigious Investment Management Certificate from the Chartered Financial Analyst Society UK & also holds full Financial Planning Certificates awarded by the Chartered Insurance Institute in London.

Prior to joining Credence, Jamil was a Senior Wealth Manager at HSBC Bank Middle East where he worked closely with HNW individuals and families. Advising on an array of matters including, Investments, Taxation, legacy planning and Philanthropy.

Jamil can be contacted at:                                                                Phone: +971 56 392 3680 Email: Jamil.al-maani@credence-wealth.com

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Royal Bank of Scotland has cut the price of shares in the sale of a stake in US bank Citizens Financial Group. RBS will raise $3bn (£1.8bn) from selling the

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Jumeirah Group’s chief executive says ties between Dubai and the UK are strong, but we still lack enough world class infrastructure. One of the Middle East’s

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The pledges made to devolve powers to the Scottish parliament set up a wholly new dynamic for bond and currency markets. In the end the bond and currency

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Next week the Scottish nation will take to the polls to decide whether to remain part of the UK or go it alone. Although arguments have been made from both

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(Reuters) - Asian shares steadied near seven-year highs on Thursday, underpinned by hopes of a ceasefire in Ukraine, although a cautious mood prevailed for now

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The Bank of England is set to keep interest rates at a record-low 0.50 percent this week, as it eyes slowing inflation before next year's election, analysts

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After the end of the budget consultation on 11th June, the Treasury issued its response on the 21st July on pension shake-up, explaining pension changes, which

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Banks will get preliminary information on how they have fared in the European Central Bank's landmark assessment of the sector a month early, so they can