Market Update – October 31 – Stocks Down & Yen plummets


Asian stock markets traded mixed, with China bourses underperforming after weaker than expected PMI reports that signal ongoing weakness, especially in the manufacturing sector. Treasuries meanwhile found buyers and the US 10-year rate is down -5.7 bp at 4.84%, while the 10-year Bund yield has dropped -3.3 bp to 2.79%. Stock futures are higher across Europe, but down in the US.

China October PMIs missed expectations as factory orders contracts – CSI300 at -0.31%.
USDJPY jumped to 150.24, after the Yen fell to 2-month lows as the BOJ made only minor changes to its policy settings, disappointing some in the market who had expected more. The central bank is keeping its cap on long-term yields at 1%, leaving its negative interest rate untouched and adding flexibility to its yield curve control.
Financial stocks were the biggest winners, insurance and banking indexes rallying more than 2% each to lead gains among the 33 industry sectors. Higher long-term yields and a steeper yield curve improve the outlook for returns from lending and investing.
Earnings beats from McDonald’s and SoFi provided support ahead of Apple and other key earnings this week
USDIndex dipped to 105.85 from a peak of 106.704 after the Nikkei report. Currently settled at 106.10.
Antipodeans, which are often used as a liquid proxy for the Yuan, were further pressured by Chinese data, i.e. AUDUSD dipped initially to 0.6340.
GOLD & USOIL: Unwinding of some of Friday’s haven demand saw gold fall about -0.5% to $1990 per oz, with a USOIL slide to $81.50 (Trendline & 200-DMA).

Today: Canadian GDP, EU preliminary GDP and CPI and NZ labor data-  Earnings: AMC, BP and Pfizer.

Interesting Mover: EURJPY (+1.05%) returns 5-day losses and keeps rising with attention turning to 162-162.40 (1998 highs & 2007-2008 highs).

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Andria Pichidi

Market Analyst

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