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Investment market update

Early Trading

UK stocks are expected to open lower on this morning, tracking losses in Asia overnight, as weak Chinese factory surveys fuel concerns over global growth.

World Markets

Asian stocks retreated as reports showed a contraction in China’s manufacturing sector and a decline in South Korean exports, underscoring concerns that the region’s economy is slowing. A private gauge of Chinese factory activity in October came in at 48.3, higher than the previous month’s reading but still below 50, the border between expansion and contraction.

US stocks faded late in October’s final session, paring the strongest monthly gain since 2011 as weaker than estimated quarterly results weighed on financial and consumer staples shares. The pace of the October advance levelled off since stocks on Wednesday pushed to their highest since August. Energy and raw-material companies — two of the strongest groups since September — added to their gains in the month’s final session, with Exxon Mobil Corp. and Chevron Corp. rising after posting better than expected earnings.

UK stocks closed lower on Friday, trimming their biggest monthly rally since 2013, weighed down by declines amid earnings reports. British Airways parent IAG SA dropped 2.5% after giving an annual earnings forecast that fell short of analysts’ projections. Royal Bank of Scotland Group Plc lost 1% after saying profit fell by more than half in the third-quarter, missing analyst estimates.

Headlines

Mark Carney is approaching his self-imposed deadline to clarify policy thinking. The Bank of England governor has been saying since July that the timing for the first interest-rate increase will become clearer at the turn of the year. This week is one of his last opportunities to guide investors, as he presents the central bank’s final economic projections for 2015 at the Inflation Report press conference in London.

The odds that the Federal Reserve will increase interest rates before year-end climbed to 50%, suggesting Treasuries are poised to extend October’s biggest monthly loss since June. The probability the Fed will act at its next meeting in December rose from a 33% chance in early October.

The US and British governments will hold a joint exercise to test cyber security and information sharing arrangements involving global financial institutions, according to the UK National Computer Emergency Response Team. The initiative will not be a “war game” involving live testing and will instead check communication and coordination links between governments, authorities and companies, an e-mailed statement from CERT said.

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