CURRENCY MARKET WRAP
As of Fri Nov 1st, Singapore Time zone UTC+8
U.S. Dollar Index, -0.12%, 97.33
USDJPY, -0.76%, $108.01
EURUSD, +0.04%, $1.1155
GBPUSD, +0.25%, $1.2936
USDCAD, +0.06%, $1.3166
AUDUSD, -0.16%, $0.6892
NZDUSD, +0.40%, $0.6414
U.S. Personal income was up 0.3% in September, as expected and personal spending was up 0.2% (consensus +0.3%). The PCE Price Index was unchanged m/m (consensus +0.1%) and up 1.3% yr/yr; the core PCE Price Index was unchanged m/m (consensus +0.1%) and up 1.7% yr/yr. The data fit reasonably well with the Fed’s working view that the U.S. economy is growing at a moderate pace with muted inflation pressures. Chicago PMI for October fell to 43.2 (consensus 48.2) from 47.1, sinking deeper into contraction territory.
In trade, Chinese officials are casting doubts about reaching a comprehensive long-term trade deal with the U.S. even as the two sides get close to signing a “phase one” agreement. In a tweet on Thursday, Trump said the search is ongoing for a new location for Xi and him to sign the deal, which he said would be “about 60% of total deal.” That first step, according to the Trump administration, is meant to lead to a more comprehensive agreement involving more substantial economic reforms than those contained in the proposed initial phase. But Chinese officials are skeptical, saying that would require the U.S. to withdraw tariffs in place on some $360 billion in imports from China -something many don’t see Trump being ready to do.
BoJ kept monetary policy steady on Thursday as expected, but offered a stronger signal it may cut interest rates in future, underscoring its concern that overseas risks could derail the country’s fragile economic recovery. The vote on keeping rates steady was 7-2, while that on changing forward guidance was 8-1.
The 2-yr yield dropped ten basis points to 1.52%, and the 10-yr yield dropped 11 basis points to 1.69%. The U.S. Dollar Index fell 0.12% to 97.33. WTI crude fell 1.6%, or $0.90%, to $54.18/bbl.
STOCK MARKET WRAP
S&P500, -0.30%, 3,037.57
Nasdaq, -0.14%, 8,292.36
Nikkei Futures, -0.51%, 22,722.5
S&P 500 lost 0.3% on this last day of October, as concerns about a comprehensive U.S.-China trade deal outweighed the positive earnings results from Apple (AAPL 248.76, +5.50, +2.3%) and Facebook (FB 191.65, +3.40, +1.8%).
Given the resiliency of the market, it was business as usual when the stock market opened the session relatively unchanged. This was short-lived, though, with the major indices quickly giving back Wednesday’s post-FOMC gains. Coinciding with this decline was the release of the Chicago PMI for October, which fell deeper into contraction territory to 43.2 (consensus 48.2) from 47.1.