Asian markets mixed post an upbeat us october payrolls
Asian markets have opened mixed this morning supported by an upbeat US October payroll report but faced by worries over this week’s reading on US inflation report. On the positive side, US Congress has passed a long-delayed $1 trillion infrastructure bill and the weekend data from China showed that China’s exports beat forecasts in October to deliver a record trade surplus. Data on inflation due on Tuesday will be the highlight of the US economic calendar this week, as investors continue to digest Fed’s decisions to begin tapering stimulus measures. Several Fed officials, including Chairman Jerome Powell, are scheduled to deliver speeches with investors looking for views on elevated price pressures. Earning season is winding down, but there are still several companies due to report during the week. The UK will publish growth data on Thursday and China’s Communist Party is set to approve President Xi Jinping’s third term during its meeting from Monday to Thursday. Today’s calendar highlights include Eurozone Sentix Investor Confidence and US CB Employment Trends, as well as a number of speeches from FOMC and BoE Andrew Bailey.
US equities finished higher, posting a fifth-straight week of gains with Dow Jones rising 0.6% to 36,328, the S&P 400 increasing 0.4% to 4,698 and the Nasdaq gaining 0.2% to 15,972. The moves came following an upbeat October labour report that showed a larger-than expected increase in jobs created (531k in October versus 350k estimate) and a decline in the unemployment rate, that fell to 4.6% from September’s 4.8%. Consumer credit showed consumer borrowing expanded by $29.9 billion during September, more that $16 billion forecast. Adding to the positive mood, Pfizer announced strong efficacy results regarding its oral antiviral COCID-19 pill. Earnings were mixed with Peloton missing the expectation, while Expedia surprised on the upside. The focus this week will be on CPI data on Tuesday, with numbers expected to hit their highest levels so far post-pandemic, with a forecast of an increase of 0.6% month-on-month and 5.8% year-on-year. At its latest meeting the Fed maintained the view that high inflation is “transitory” and is not likely to require a rapid increase in interest rates. Yields in 10-year Treasuries dived 10 basis points on the week and were last at 1.47%. The drop took a little steam out of the dollar, which hit a more than on-year high after payrolls data. The DXY is trading at around 94.331, from a top of 94.634.
European markets have opened marginally lower with DAX trading 0.1% lower, CAC 40 dropping 0.1% and FTSE 100 falling 0.1%. European Central Bank chief economist Philip Lane said this Monday that Eurozone inflation will ease next year, repeating the ECB message that high price growth is temporary. The first look at economic growth in the UK for the third quarter is due to be released on Thursday with GDP expected to slow to 1.5% from the previous quarter, a week after the Bank of England surprised the market by keeping interest rates on hold. Sterling, which dropped post BoE, surprised by holding rates steady last week, and is trading around 1.3478 after falling to 1.3425 on Friday. EURUSD is ranging above mid-1.15 consolidating the recovery form yearly lows.
Asian markets were trading mixed this Monday with MSCI’s broadest index of Asia-Pacific shares outside Japan declining 0.2% and Japan’s Nikkei losing early gains to dip 0.1%, short of recent five-week peak. China’s exports beat forecasts in October to deliver a record trade surplus, although a miss on imports added to evidence of a slowing in domestic demand. Chinese blue chips traded flat, stuck in a range that held for almost four months. Some holders of offshore bonds issued by a unit of China Evergrande Group had not received interest payments due on November 6 by Monday morning in Asia. Japan has cut its view on economic conditions for the first time in more than two years after the coincident indicator index extended its decline in September, falling to the lowest in a year.
Oil prices rose this Monday on the back of positive signs for global economic growth, supporting energy demand, with Brent Crude up by 1% at $83.58 a barrel after dropping nearly 2% last week. WTI gained 1.2% to $82.22, having declined almost 3% through Friday. Saudi Arabia’s state-owned producer Aramco raised the official selling price for its crude, exceeding the market expectations. The move by Aramco suggests that demand for energy remains strong, as the OPEC and other major oil exporters keep the reins on supply. Demand for jet fuel is set to rise as more governments lift travel restrictions.