A quick review of the issues and events driving the markets this past week... and what's on tap for the week ahead.

Weekly Market Snapshot

October 12, 2015

"I'm more concerned about the lack of investment than the lack of inflation"

— IMF chief Christine Lagarde (Bloomberg, October 9, 2015)

The week in review...


Germany: Global to a fault August industrial production disappointed, falling -1.2% month-over-month, despite an upwardly-revised 1.2% gain in July, echoing industrial slowdowns elsewhere in Europe. Likely cause: the slowdown in China and other emerging economies, which are no longer importing at their former pace. German factory orders from countries outside the 19-country eurozone are down more than 13% in July and August combined, prompting a shift in economic policy toward domestic spending and investment, echoing similar shifts in China and elsewhere.

ECB: QE for EM The account of the central bank's monetary policy meeting on September 2-3 reflected members' growing concern – since justified – regarding the impact of the EM downturn on Europe's growth. All this suggests to observers that the ECB's monetary stimulus program is likely to continue beyond its currently-scheduled end in September 2016.


US Fed: Weight of the world The minutes of the September 16-17 FOMC meeting showed clear concern about the impact of the EM slowdown – especially China's cool-off – on the pace of growth in the US. The rise of the US dollar and the related weakness in commodity prices were both cited as contributing to the challenge of meeting the Fed's 2% inflation objective, leaving the impression that the FOMC shares in the challenge, with the world's other central banks of rekindling global growth.

Chile: Yet more damage from copper prices The nearly 20% decline in the price of copper since the beginning of 2015 has taken its toll this summer: consumer prices rose a less-than-expected 0.5% in September, less than the 0.7% expected rate and the first downside inflation surprise in in six months. The shortfall encouraged the central bank to talk of possibly delaying its planned interest rate hike.


Currency: Trading places Another move by China toward making the yuan a world currency: creating the yuan's first China-based cross-border currency settlement system. The China International Payment System (CIPS) went live on October 1 and included the Chinese units of eight banks, among them HSBC, Standard Chartered and Citibank. The new system will be separate from Swift, the well-established global settlements system.

Signs of the times:

Yuan Gains as China Foreign Reserves Decline Less Than Forecast – Bloomberg

Abenomics Is Doing Better Than You Think – Wall Street Journal

Saudi Arabia Said to Order Spending Curbs Amid Oil Slump – Bloomberg

Jobless Claims in U.S. Fall to Lowest Level Since Mid-July – Bloomberg

Sources: Bloomberg, Wall Street Journal, Financial Times, New York Times, Xinhua, China Daily, Market News International.

...And the week ahead:

GLOBAL ECONOMIC CALENDAR: October 11 – 17, 2015



Other Americas

Europe, UK, Africa, Mideast

Japan, Asia Ex Japan & Pac Rim

Oct 11



Russia: Formula 1 Grand Prix (auto race)


Oct 12

Senate on recess this week

Mexico: industrial production

Russia: trade balance
Sweden: Nobel prize in economics


Oct 13

Small business optimism


Greece: IMF payment due

China: exports, imports

Oct 14

Retail sales, business inventories, wholesale prices

Brazil: retail sales

Spain: consumer prices

China: consumer inflation

Oct 15

Consumer prices, jobless claims


Russia: industrial production
European Union: meeting on refugee policies

Australia: jobless rate

Oct 16

Industrial production, consumer sentiment, JOLTS report (job openings)


Russia: producer prices


Oct 17






Quantitative easing (QE) refers to a monetary policy implemented by a central bank in which it increases the excess reserves of the banking system through the direct purchase of debt securities.

Emerging markets (EM) are nations with social or business activity in the process of rapid growth and industrialization. These nations are sometimes also referred to as developing or less developed countries.

The European Central Bank (ECB) is responsible for the monetary system of the European Union (EU) and the euro currency.

The Federal Open Market Committee (FOMC) is a policy-making body of the Federal Reserve System (Fed) responsible for the formulation of a policy designed to promote economic growth, full employment, stable prices, and a sustainable pattern of international trade and payments.

The European Central Bank (ECB) is responsible for the monetary system of the European Union (EU) and the euro currency.

The renminbi (or yuan) is the name of China's currency.

"Abenomics" refers to a series of economic reforms proposed by Japan's Prime Minister Shinzo Abe.

The International Monetary Fund (IMF) is an international organization of various member countries, established to promote international monetary cooperation, exchange stability, and orderly exchange arrangements.

The Job Openings and Labor Turnover Survey (JOLTS) is conducted by the US Department of Labor, producing data on job openings, hires, and separations.


The opinions and views expressed herein are not intended to be relied upon as a prediction or forecast of actual future events or performance, or a guarantee of future results, or investment advice.

Global investments are subject to special risks including currency fluctuations, social, economic and political uncertainties, which could increase volatility. These risks are magnified in emerging markets.

Currencies and commodities contain heightened risk that include market, political, regulatory, and natural conditions and may not be suitable for all investors.

This material is for information only and does not constitute an invitation to the public to invest in any funds, securities, strategies or other products. You should be aware that the investment opportunities described should normally be regarded as longer term investments and they may not be suitable for everyone. All investments involve risk, including possible loss of principal. The value of investments and the income from them can go down as well as up and investors may not get back the amounts originally invested, and can be affected by changes in interest rates, in exchange rates, general market conditions, political, social and economic developments and other variable factors. Past performance is no guide to future returns and may not be repeated. Investment involves risks including but not limited to, possible delays in payments and loss of income or capital. Neither Legg Mason nor any of its affiliates guarantees any rate of return or the return of capital invested. Unless otherwise noted the "$" (dollar sign) represents U.S. Dollars.

Please note that an investor cannot invest directly in an index. Forward-looking statements are subject to uncertainties that could cause actual developments and results to differ materially from the expectations expressed. This information has been prepared from sources believed reliable but the accuracy and completeness of the information cannot be guaranteed and is not a complete summary or statement of all available data. Individual securities mentioned are intended as examples of portfolio holdings and are not intended as buy or sell recommendations. Information and opinions expressed by either Legg Mason or its affiliates are current as at the date indicated, are subject to change without notice, and do not take into account the particular investment objectives, financial situation or needs of individual investors.

The opinions and views expressed herein are not intended to be relied upon as a prediction or forecast of actual future events or performance, or a guarantee of future results, or investment advice. The information in this material is confidential and proprietary and may not be used other than by the intended user. Neither Legg Mason or its affiliates or any of their officer or employee of Legg Mason accepts any liability whatsoever for any loss arising from any use of this material or its contents. This material may not be reproduced, distributed or published without prior written permission from Legg Mason. Distribution of this material may be restricted in certain jurisdictions. Any persons coming into possession of this material should seek advice for details of, and observe such restrictions (if any).

This material may have been prepared by an advisor or entity affiliated with an entity mentioned below through common control and ownership by Legg Mason, Inc.


This material is only for distribution in those countries and to those recipients listed.

All investors in the UK, professional clients and eligible counterparties in EU and EEA countries ex UK and Qualified Investors in Switzerland:
Issued and approved by Legg Mason Investments (Europe) Limited, registered office 201 Bishopsgate, London EC2M 3AB. Registered in England and Wales, Company No. 1732037. Authorized and regulated by the Financial Conduct Authority. Client Services +44 (0)207 070 7444.

All Investors in Hong Kong and Singapore:
This material is provided by Legg Mason Asset Management Hong Kong Limited in Hong Kong and Legg Mason Asset Management Singapore Pte. Limited (Registration Number (UEN): 200007942R) in Singapore.

This material has not been reviewed by any regulatory authority in Hong Kong or Singapore.

Qualified domestic institutional investors in the People's Republic of China (PRC), Distributors and existing investors in Korea and Distributors in Taiwan:
This material is provided by Legg Mason Asset Management Hong Kong Limited to eligible recipients in the PRC and Korea and by Legg Mason Investments (Taiwan) Limited (Registration Number: (98) Jin Guan Tou Gu Xin Zi Di 001; Address: Suite E, 55F, Taipei 101 Tower, 7, Xin Yi Road, Section 5, Taipei 110, Taiwan, R.O.C.; Tel: (886) 2-8722 1666) in Taiwan. Legg Mason Investments (Taiwan) Limited operates and manages its business independently.

This material has not been reviewed by any regulatory authority in the PRC, Korea or Taiwan.

All Investors in the Americas:
This material is provided by Legg Mason Investor Services LLC, a U.S. registered Broker-Dealer, which may include Legg Mason International - Americas Offshore. Legg Mason Investor Services, LLC, Member FINRA/SIPC, and all entities mentioned are subsidiaries of Legg Mason, Inc.

All Investors in Australia:
This material is issued by Legg Mason Asset Management Australia Limited (ABN 76 004 835 839, AFSL 204827) ("Legg Mason"). The contents are proprietary and confidential and intended solely for the use of Legg Mason and the clients or prospective clients to whom it has been delivered. It is not to be reproduced or distributed to any other person except to the client's professional advisers.


Previous Editions

Click on a date to view that week's edition of weekly snapshot.


Will China's official growth rate fall to 6 percent by the end of 2015?


Will China's official growth rate fall to 6 percent by the end of 2015?

Yes: Economic reform measures will take their toll on growth
Yes: Demographics and urban labor shortage will constrain demand
No: New monetary and fiscal stimulus will restore rapid growth
No: Recovery in the US, Europe and Japan will more than make up for slowing domestic demand

Previous month Poll

When will the Fed raise the Fed Funds target rate?

Not until 2016