FYI | Oct 02 2012
By Eva Brocklehurst
[Note: The following refers to historical trends and does not reflect specific predictions.]
Equity seasonality is here with some recovery in October, according to Barclays research. Only four of 15 global stock indices are expected to post negative returns but it does happen to be the weakest month of the year for India's Sensex, Australia's All Ords and Japan's Topix. The Johannesburg All Share is expected at its best. The All Ords is 63% likely to advance with the maximum return historically 10.5% and the minimum down 42.4%.
That last number is enough to send shivers, and rightly so as it reflects those odd Octobers such as 2008 and 1987 in which stock markets collapsed. However despite the infamy of the month of October, statistics show historically it is globally a positive month.
The US dollar is expected to be generally weak with stronger commodity currencies. For the currencies Barclays suggests the best combination is the EUR/USD (euro) and worst USD/SGD (Singapore dollar). It is the best month for EUR/CHF (Swiss franc), measured by the median return. The Australian dollar against US dollar is considered to have a 59% likelihood of advancing while against the NZ dollar the odds are 44%.
In commodities the broker sees October as a poor month, with natural gas being the stand-out best return. Copper and gold, meanwhile, are expected to have the worst month, measured by median returns. The likelihood of an advance in spot gold, spot silver and aluminium is 44% for each. The likelihood of an advance for copper is 42% and for crude oil (WTI) 41%.
