Market Roundup
- US manufacturing sector growth slows in October (50.1 v 50.2 in Sept) - ISM.
- US September construction spending rises to 7.5 yr high, +0.6 pct.
- US on track to grow 1.9 pct in fourth quarter -Atlanta Fed.
- Weak U.S. wage growth signals little about future inflation: Fed paper.
- German data, ECB comments lift Europe stocks and euro.
- UK Mfg PMI surges to 16-mos high, exports recover; BoE unlikely to be swayed by 1-mos PMI.
- Fitch: US Investors See EM Contagion as Top Market Risk.
- Copper recovers after scraping 1-month low on China manufacturing data.
- Gold dips to four-week low on technical's, U.S. rate hike prospects.
- Loeb's Third Point hedge fund bets on stock declines.
Looking Ahead - Economic Data (GMT)
- No Significant Data
Looking Ahead - Events, Other Releases (GMT)
- 03:30 Australia RBA Cash Rate* Nov f/c 2%, 2%-previous
Currencies Summary
EUR/USD is likely to find support at 1.0980 levels and currently trading at 1.1021 levels. The pair has made session high at 1.1050 and hit lows at 1.1004 levels. The euro held firm against the dollar on Monday after comments from two members of the European Central Bank's governing council lowered expectations for increasing its bond-purchase program next month. The euro also was bolstered by data from the euro zone which, although sluggish, showed some signs of improvement. Markit's final manufacturing Purchasing Managers' Index for the euro zone was at 52.3 last month, only slightly up from the September and preliminary October reading of 52.0. The dollar had been rallying in the last few weeks on expectations that the euro zone would continue to add to monetary stimulus while the U.S. Federal Reserve is seen tightening policy soon, perhaps as early as December. The dollar edged down against the euro 0.28 percent to $1.1036 and the dollar index, which weighs the greenback against six major world currencies, moved lower by 0.24 percent to 96.719. To the upside, immediate resistance can be seen at 1.1064. To the downside, immediate support level is located at 1.0983 levels.
GBP/USD is supported in the range of 1.5378 levels and currently trading at 1.5414 levels. It reached session high at 1.5440 and dropped to session low at 1.5402 levels. Sterling slipped lower against US dollar on Monday after data showed US factory activity expended moderately in October, helped by a recovery in export orders. Many economists will wait for Wednesday's survey of the much bigger services sector to gain a fuller picture of the pace of recovery. The main focus of the week for currency traders, though, will be what is dubbed Super Thursday, when the Bank of England releases its latest quarterly Inflation Report as well as an interest rate decision and the minutes from its latest Monetary Policy Committee. The central bank is expected to keep interest rates at their historic lows, with most economists expecting only MPC hawk Ian McCafferty to continue to vote for an immediate hike. But some reckon another of the nine MPC members could join him, with Kristin Forbes and Martin Weale seen as most. The pound also initially rose to $1.5498 after the data, its highest in 11 days, before easing to turn flat on the day at $1.5430. To the upside, immediate resistance can be seen at 1.5461. To the downside, immediate support level is located at 1.5378 levels.
USD/JPY is supported around 120.19 levels and currently trading at 120.75 levels. It peaked to hit session high at 120.81 and made session lows at 120.48 levels. Japanese yen slipped against US dollar on Thursday, after U.S. manufacturing activity in October hit a 2-1/2-year low, but a rise in new orders offered hope for a sector buffeted by a strong dollar and relentless spending cuts by energy companies. The Institute for Supply Management said its national manufacturing index slipped to 50.1 this month, the lowest level since May 2013, from a reading of 50.2 in September. The index is barely hanging above the 50 mark, the dividing line between expansion and contraction. Manufacturers continued to cite the dollar's strength and low oil prices as headwinds. The new orders sub-index rose to 52.9 last month from 50.1 in September, but export orders continued to contract. There were modest improvements in supplier deliveries and backlog orders. The dollar gained 0.1 percent to 120.72 yen after the Institute for Supply Management Manufacturing Purchasing Managers' Index showed slight manufacturing growth in October. To the upside, immediate resistance can be seen at 120.77. To the downside, immediate support level is located at 120.55 levels.
USD/CAD is supported at 1.3071 levels and is trading at 1.3099 levels. It has made session high at 1.3116 and lows at 1.3071 levels. The Canadian dollar weakened marginally against its U.S. counterpart on Monday as oil prices slipped lower, with the currency trading in a tight range ahead of ahead of domestic trade data and jobs numbers for Canada the loonie kept to a relatively narrow trading range .the loonie aslo declined against most of other main currencies as crude oil prices slipped lower incurring losses. The loonie kept to a relatively narrow trading range ahead of trade and labor data due on Thursday and Friday that could influence the loonie outperformed other main currencies as crude oil prices rebounded from earlier losses. Oil prices fell after soft Chinese factory data raised worries about energy demand in the world's second largest economy, while record high Russian crude output suggested little easing in the global supply glut. The currency's strongest level of the session was C$1.3065, while its weakest level was C$1.3117. To the upside, immediate resistance can be seen at 1.3115. To the downside, immediate support level is located at 1.3074 levels.
Equities Recap
European shares had a positive start to the week after business surveys (PMIs) from around the euro zone beat expectations.
UK's benchmark FTSE 100 closed up by 0.94 percent, the pan-European FTSEurofirst 300 ended the day up by 0.27 percent, Germany's Dax ended up by 1 percent, France's CAC finished the day up by 0.40 percent.
U.S. stocks climbed on Monday after a raft of manufacturing data globally and strength in healthcare shares following more acquisition activity.
Dow Jones closed up by 0.94 percent, S&P 500 ended up by 1.84 percent, Nasdaq finished the day up by 1.44 percent.
Treasuries Recap
Benchmark 10-year Treasury yields hit their highest in over five weeks on Monday, while shorter-dated yields reached the highest in over six weeks on continued expectations of a possible Federal Reserve rate hike in December.
Benchmark 10-year Treasury notes were last down 8/32 in price to yield 2.182 percent, from a yield of 2.151 percent late Friday.
U.S. 30-year Treasury bonds were last down 12/32 in price to yield 2.955 percent, from a yield of 2.936 percent late Friday.U.S. two-year Treasury notes, which are among the short-dated Treasuries deemed most vulnerable to a Fed rate hike, were last down 1/32 in price to yield 0.753 percent after hitting a session high of 0.757 percent. Those yields stood at 0.736 percent late Friday.
Commodities Recap
Gold hit a four-week low on Monday, extending a sell-off into a fourth straight session as technical signals deteriorated and investors fretted that the Federal Reserve would raise U.S. interest rates this year.
Spot gold fell to $1,132.35 an ounce, its lowest since Oct. 5, in earlier trading and was down 0.6 percent at $1,135.551 at 2:31 p.m. EST (1931 GMT). It fell nearly 2 percent last week, its worst weekly performance in nine weeks.
U.S. gold futures for December delivery settled down 0.5 percent at $1,135.90 an ounce.
Oil prices fell on Monday after soft Chinese factory data raised worries about energy demand in the No. 2 economy, while record high Russian crude output suggested little easing in the global supply glut.
Brent , the global crude benchmark, settled down 77 cents, or 1.6 percent, at $48.79 a barrel.
U.S. crude futures closed down 45 cents, or 1 percent, at $46.14.
