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Investment market update

Early Trading

UK stocks are expected to open little changed this morning, as investors digest yesterday’s statement from the Bank of England and await the US jobs numbers to come out this afternoon.

World Markets

Japanese stocks rose, capping a third straight weekly gain, as a weaker yen boosted exporters. Construction machinery maker Takeuchi Manufacturing Co., which relies on the US for 43% of sales, climbed 1.7%. Tractor maker Kubota Corp. increased 4.9% after raising its profit outlook on a weaker yen.

US stocks were little changed as investors awaited a US payrolls report that could provide clues on the Federal Reserve’s next move on interest rates.

UK stocks snapped three days of gains as falling shares of Wm Morrison Supermarkets Plc weighed on the FTSE 100 Index. Morrison fell 5.6% after reporting a fifteenth straight drop in quarterly sales. Shares in drugs firm AstraZeneca rose almost 3% after the company raised its full-year forecasts for revenue and earnings.

Headlines

German industrial production unexpectedly fell in September as a slowdown in China and other emerging markets left its mark on Europe’s biggest economy. Output, adjusted for seasonal swings and inflation, fell 1.1% from August, when it declined a revised 0.6%.

Mark Carney warned that the slowdown in China as it tries to rebalance its economy risks hurting its banking sector as well as threatening growth in economies such as the UK. “These processes never proceed smoothly and we’ll all have to deal with the bumpiness that comes with it”.

Prime Minister David Cameron is counting on Germany to push through Britain’s agenda for rebooting the European Union. He should be lobbying the French instead. As Cameron preps his EU wish list, Britain’s Germany-first diplomacy is understandable as a means of swaying the 28 nation bloc.

The UK recovery is still quite solid” and “is currently fairly broad based,” Bank of England Deputy Governor for Markets and Banking Minouche Shafik said in an interview with the BBC this morning. “I do think that with the unemployment rate at 5.4%, and we think the natural rate of unemployment is 5%, we are over time seeing a situation where there are recruitment difficulties in many parts of the country”

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