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Eurozone economy shrinks amid German slump

Thanks for joining me. Vladimir Putin has made it harder for western companies to exit Russia in an effort to prop up the struggling rouble.

Companies wanting to sell their Russian assets will either have to agree to make the sale in roubles or, if they want to do so in dollars or euros, face delays or losses on the amounts transferred abroad, according to the Financial Times.

It comes as Moscow grapples with a 20pc fall in the value of the rouble since the start of the year.

It passed 100 to the dollar in August, forcing the Kremlin to impose capital controls on exporters, requiring them to quickly convert the proceeds of sales into the Russian currency.

Kremlin spokesperson Dmitry Peskov told the FT that the rouble “has absolute priority,” although one banker told the paper the effective new capital controls on western companies was “like applying a Band-Aid to gangrene”.

The Russian rouble has strengthened to a more than eight-week high against the dollar as it was supported by Friday’s interest rate increase as well as the currency conversion obligations placed on exporters by the Kremlin.

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What happened overnight 

Asian equities slid as disappointing activity data from China revived some worries over the world’s second-largest economy, while the yen weakened past 150 per dollar after the Bank of Japan tweaked its bond yield control policy.

MSCI’s broadest index of Asia-Pacific shares outside Japan was 0.9pc lower, hovering close to the one-year low it touched last week. The index is down 4pc in October and on course for third straight month in the red.

The yen fell 0.8pc against the dollar to touch a session low of 150.25 after the central bank said the 1pc ceiling on benchmark 10-year yields would be an upper bound rather than a rigid cap. It maintained the 0pc target for the yield under its yield curve control (YCC) policy.

Japan’s benchmark Nikkei 225 reversed course and added 0.3pc in afternoon trading to 30,796.81. 

Australia’s S&P/ASX 200 gained 0.1pc to 6,780.70. South Korea’s Kospi lost 1.3pc to 2,280.48. Hong Kong’s Hang Seng shed 1pc to 17,059.78, while the Shanghai Composite declined 0.4pc to 3,008.37.

Wall Street stocks ended higher ahead of the Federal Reserve’s two-day monetary policy meeting and subsequent interest rate decision.

The S&P 500 rose 49.45 points or 1.2pc to close at 4,166.82, in the first trading session after the benchmark index dropped more than 10pc below its high point for the year.

The Dow Jones Industrial Average rose 511.37 or 1.6pc to 32,928.96 points. The tech-heavy Nasdaq Composite rose 146.47 or 1.2pc to 12,789.48.

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