In a market wrap, analysts at ANZ Bank New Zealand Limited explained that US equities were up overnight after European bourses followed the bounce in Asian equities.
“At the time of writing, S&P 500 is up 1.7%. Technology shares led gains after Facebook’s earnings helped buoy the sector and investors went bargain hunting following recent declines. Consumer discretionary and financials also gained.”
“The USD was mixed against the G10, with GBP leading gains and AUD and NZD lower on weaker Chinese data.”
“Mexico’s peso underperformed after Fitch cut their outlook to negative. Treasury yields were up 1-2bps across the curve with global yields generally up around the same amount. Italian yields bull steepened 5-8bps with news that the fiscal deficit may be closer to 2.0% rather than 2.4% next year.”
“LIBOR continues to fix higher. Oil prices were largely unchanged despite US crude output rising to 11.346m bbl/day, up 3.8% to a record high. Gold fell on better risk sentiment, down 0.8%.”
US market still tightening:
US ADP employment data came in above expectations, with the labour market continuing to tighten. Employment printed at 227k, up from 218k in September and compared with market expectations of 187k.
PMI a little lower:
US Chicago PMI came in at 58.4, down from 60.4 and compared with market expectations of 60. Employment and production rose at a faster pace over the month, but this was more than offset by slower new orders, inventory building, and order backlogs.
Euro-area core rising:
Euro area inflation came in bang on expectations at 2.2% y/y in October, up from 2.1% in September. Core inflation edged up to 1.1% y/y from 0.9% as inflation pressures gradually creep higher, while activity data has been on the disappointing side recently.
Candian GDP stronger:
Canada’s GDP came in better than expected at 0.1% m/m in August and 2.5% y/y, reaffirming the path of policy normalisation in Canada.