- US economy seeing strengthened recovery with encouraging job creation numbers and all indications are that US Fed likely to raise rates in December followed by gradual progression
- Emerging Markets showing continued volatility, but driven also by commodity price weaknesses for key Ems like Brazil, South Africa, and Russia.
- China ‘hard landing’ concerns grow; PBoC cuts rates in October in bid to boost growth, worries over spill over effects to South East and East Asia given tight trade integration.
- Oil prices remain at historic lows, but need to watch action by Saudi Arabia on whether they will cut supplies amidst an increasingly hard to manage currency peg
- Global risks are likely to stem from two factors, according to the French bank Societe Generale. It placed probability estimates on two global economic risks – 1) a British exit from the Eurozone – ‘Brexit’ (45% probability) and an economic hard landing in China (30% probability)
- The Department of Census and Statistics has launched a new National Consumer Price Index, but the fuller indication will only be available in a few months as the index is very new. Meanwhile, except in agriculture, the Producer Price Index showed a decline in September.
- Sri Lanka corporate earnings picked up 10.7% (YoY) with the largest sector wise contributors being Banks, Finance and Insurance sector (40%); Beverages, Food and Tobacco sector (18%); and Diversified Holdings (13%) respectively. The economy’s growth continues to come from domestic non-tradable sectors and not the tradable (exports) side of the economy.