newzealandinc.com Informed. Influential. Indispensable.
GLOBAL MARKETS: US bond and equity market remained in shutdown mode as post-tropical cyclone Sandy slammed into New Jersey , with a reported 13-foot storm surge inundating low lying areas including New York ’s subway system (see below). In Europe , markets were quiet and rangy, although sentiment remained positive on solid earnings reports from BP and Deutsche Bank AG. The Euro Stoxx added 1.4% and the FTSE gained 1.1%. German bund yields rose 2bps despite an increase in unemployment figures, while Italian 10 year bond yields rallied below 5% on a strong bond auction which saw €7bn of 5 and 10-year bonds issued at below market rates.
KEY THEMES AND VIEWS: Unhappy Halloween: Post-tropical cyclone Sandy slammed into New Jersey at around 8pm Tuesday local time, with a record 13.8-foot storm surge contributing to the flooding of the US subway network, the destruction of at least 80 homes in Queens, and a third of lower Manhattan left without power. And while a “major disaster” was declared in New York State and more than 30 people killed across seven states, damage was not as bad as had been feared. Despite the disruption, the NYSE and Nasdaq have announced they expect to reopen Wednesday, although reports that the subway may be out of action for 4-5 days suggest it may take a while longer for Wall Street to fully return to its feet.