October 31st – Top Stories

1/ US


- Fed stays the course on bond buying - FT – By Robin Harding in Washington and Michael Mackenzie in New York


The US Federal Reserve said the world’s largest economy is still expanding at a moderate pace in a statement that suggests a slowing of asset purchases in December or January is still under consideration.
The rate-setting Federal Open Market Committee made no changes to policy at its October meeting, keeping its asset purchases steady at $85bn a month, but the statement implied it did not see a lot of damage from a three-week government shutdown earlier this month.


2/ China


- Top Chinese Banks Post Biggest Bad-Loan Surge Since 2010 - Bloomberg – By Bloomberg News


China’s top four banks posted their biggest increase in soured loans since at least 2010 as a five-year credit spree left companies with excess manufacturing capacity and slower profit growth amid a cooling economy.
Bad debts at Industrial & Commercial Bank of China Ltd. (1398), China Construction Bank Corp. (939), Agricultural Bank (1288) of China Ltd. and Bank of China Ltd. (3988) rose 3.5 percent in the third quarter to a combined 329.4 billion yuan ($54 billion), data compiled from earnings reports shows. Profit rose to 209 billion yuan while their average bad-loan ratio widened to 1.02 percent.


- China Money Rates Slide as PBOC Adds Cash, Seasonal Factors Wane - Bloomberg – By Bloomberg News


China’s money-market rates fell and interest-rate swaps retreated from the highest level since June as the central bank added cash to the financial system for the second time this week.
The People’s Bank of China conducted 16 billion yuan ($2.6 billion) of 14-day reverse-repurchase contracts today at a yield of 4.3 percent, according to a trader at a primary dealer required to bid at the auctions. That followed an injection of 13 billion yuan via seven-day reverse repos at 4.1 percent on Oct. 29. Commercial banks hoard cash toward month-end to meet liquidity requirements set by the central bank and corporate tax payments fell due in October, locking up funds.


3/ Eurozone & UK


- ECB agrees standing swap arrangements with other central banks - Reuters

MThe European Central Bank said on Thursday it was converting temporary bilateral liquidity swap arrangements with five other central banks to standing arrangements that would remain in place until further notice.