A Noteworthy Week to End with the Release of U.S. Monthly Labor Market Data and the Start of Trump’s 11-Day Trip to Asia

November 3, 2017

Over the past week,

  • Republican lawmakers pressed hard in their quest to pass a major tax cut by Christmas.
  • Jerome Powell, viewed widely as a continuity choice, was nominated to be the next Federal Reserve Chairman.
  • The Bank of England raised its interest rate for the first time since July 2007. The latest British purchasing manager survey results were better than forecast.
  • The Bank of Japan retained its aggressively loose monetary policy.
  • Several leaders of the Catalan independence movement got arrested.
  • The first indictments were made in the Mueller investigation into Russian meddling in the U.S. 2016 election. More calls were heard for Mueller to be fired and the investigation ended.
  • The FOMC left its interest rate target unchanged but did nothing to discourage market speculation that such will be raised in December.

The U.S. Department of Labor’s October jobs report will be released today, and President Trump embarks on an extended trip to Asia.

Awaiting the labor market data, the dollar shows overnight gains of 0.7% against the Australian dollar, 0.6% versus the peso, 0.3% relative to the yuan, 0.2% vis-a-vis the loonie and 0.1% against the euro. Dollar/yen and dollar/kiwi are unchanged, and sterling has ticked 0.1% higher.

Share prices in the Pacific Rim rose 0.5% in Australia and South Korea but fell 0.4% in New Zealand and 0.3% in China. Equities in Europe thus far have jumped 1.3% in Greece but dropped 0.9% in Spain. Stocks in France, Germany and the U.K. are slightly higher.

WTI oil is trading firmly at $54.81 per barrel, near an 8-month high. Comex gold dipped 0.2% to $1,276 per ounce. Ten-year German bund and British gilt yields edged down a basis point.

Australian retail sales were again disappointing in September. Such were unchanged on month (+2% on year) after drops of 0.6% in August and 0.2% in July. AIG’s Australian Performance of Services index declined 0.7 points to an 8-month low of 51.4 in October. The CBA services PMI also slipped.

Among other released purchasing manager surveys from October,

  • China’s Caixin composite PMI slid to a 16-month low of 51.0 despite an uptick in that economy’s services PMI to a 2-month high of 51.2 from September’s 21-month low.
  • India’s service and composite PMIs improved to 4-month highs of 51.7 and 51.3, respectively.
  • Russia’s services PMI softened to a 3-month low of 53.9. Russia’s composite PMI was 1.6 points lower at 53.2, lowest this year.
  • The Irish services PMI printed at an 11-month low of 57.5, still implying a robust pace of improvement in business conditions.
  • Britain’s services and composite PMI scores of 55.6 and 55.3 were each the best readings since April.
  • Standard Bank’s South African private purchasing managers index rose 1.1 points. At 49.6, however, such was under the breakeven level of 50 for a third straight month and the fourth time in five months.
  • Lebanon’s private PMI sank to 45.8, a one-year low.
  • Singapore’s factory PMI climbed 0.5 points to a 40-month high.
  • Hong Kong’s PMI fell 0.9 points to a 2-month low and, at 50.3, reflected minimal improvement in business conditions.
  • Hungary’s manufacturing PMI of 58.3 also represents a 2-month low.

Turkey reported double-digit rates of CPI inflation (11.9%) and PPI inflation (17.3%), reflecting the weaker lira in large part.

Canada and the United States each release labor statistics and trade figures today.

Copyright 2017, Larry Greenberg. All rights reserved. No secondary distribution without express permission.

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