Upbeat earnings support equity markets

Upbeat corporate reports boosted investor confidence last week while the braking effect of higher interest rates on economy remained in focus after Federal Reserve’s September policy meeting minutes revealed plans of policy makers to continue rate hikes. The SP 500 edged up less than a point after 4.1% drop last week and the ICE US dollar gained 0.5%.

UK’s FTSE 100 index logged the best performance among major stock indices after recording the second steepest decline last week. It closed 0.8% higher. All major currencies except Australian dollar weakened against the dollar with the British Pound vs US dollar retreating the most: it slid 0.7%.

This week European Central Bank meets on Thursday. While no change in policy is expected, the euro may get a lift from a confirmation that asset purchases will end this year while interest rates remain at record lows. The Bank of Canada is expected to raise interest rates a quarter of percentage point. And third quarter GDP advance estimate on Friday as earnings season rolls on will provide the first estimate of an expected slowdown of US economy after record 4.2% growth in the second quarter.