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Daily US Opening News And Market Re-Cap: November 1

Tyler Durden's picture




 

From RanSquawk

  • Concerns surrounding the Greek debt situation resurfaced after the Greek PM called for a referendum on the new EU aid package, and news that the Greek government is planning a vote of confidence this Friday
  • Lacklustre manufacturing PMI data from China dented appetite for risk
  • GBP came under pressure following weaker than expected manufacturing PMI data from the UK, however did recover some strength after higher than expected UK’s third quarter advanced GDP reading
  • The RBA cut its benchmark interest rate overnight by 25 basis points as expected

Market Re-Cap

Concerns surrounding the Greek debt situation resurfaced after the Greek PM called for a referendum on the new EU aid package, and news that the Greek government is planning a vote of confidence this Friday. Risk for appetite was further dented following lacklustre manufacturing PMI data from China, which contributed to weakness in equities, with particular underperformance seen in the Italian FTSE MIB and Spanish IBEX 35 indices. Downbeat corporate earnings results from the likes of Credit Suisse together with weakness in French banking shares weighed on financials, whereas volumes remained light owing to All Saints' public holiday in Europe. Weakness in equities provided strength to Bunds and Gilts, whereas the Eurozone 10-year government bond yield spreads widened across the board. In the forex market, strength in the USD-Index weighed upon EUR/USD, GBP/USD and commodity-linked currencies, whereas AUD came under further pressure after the RBA cut its benchmark interest rate overnight. Also, GBP did come under additional pressure after weaker than expected manufacturing PMI data from the UK, however gained briefly following higher than expected UK's third quarter advanced GDP reading. In other news, CHF traded lower on the back of market talk of the SNB checking rates. Elsewhere, WTI and Brent crude futures remained under pressure during the European session, weighed upon by strength in the USD-Index together with weaker than expected manufacturing PMI data from China.

Moving into the North American open, markets look ahead to economic data from the US in the form of ISM manufacturing, construction spending, vehicle sales and API oil inventories report. In fixed income, BoE's Gilt purchase operation in the maturity range of 2038-2060, together with USD 35bln 4-week T-Bill auction from the US are also scheduled for later in the session.

Asian Headlines:

Some BoJ board members warned at an October 6th-7th meeting that downside risks to Japan’s economy and prices had increased to some extent due to instable financial markets and the worsening of the Eurozone’s sovereign debt problem, minutes of the meeting showed. Some members said it was important for BoJ to continue to take appropriate action as necessary. One member said further monetary easing may be necessary in the future. (RTRS)

•    Chinese Manufacturing PMI (Oct) M/M 50.4 vs. Exp. 51.8 (Prev. 51.2)
•    Chinese HSBC Manufacturing PMI (Oct) M/M 51.0 vs. Prev. 49.9 (RTRS)

US Headlines

President Obama will meet top democrats from the US House of Representatives on Tuesday to plot strategy on how to advance his jobs proposals that has stalled in Congress amid Republican resistance. Senior Democrats from the Republican-controlled House, a delegation expected to be headed by Democratic Minority Leader Nancy Pelosi, is due to meet Obama at 1915 GMT today. (RTRS)

In other news, the US Treasury said that holdings of foreign debt in the US rose to about USD 6.8trl at end of 2009 and that USD 4.6trl of the total foreign holdings at the end-2010 was in equities and USD 1.7trl in was in long-term debt. (RTRS)

EU and UK Headlines:

Greek Prime Minister Papandreou said that the Greek Government will hold a referendum on the new EU aid package and called on voters to say whether they want to adopt it or not. A Greek referendum on EU aid deal is expected in January according to a source. In addition a socialist party source said that the vote of confidence debate will begin on Wednesday, and the Greek government plans a vote of confidence on Friday. In latest news, French president Sarkozy will call German Chancellor Merkel today on Greek referendum, according to the AFP. (RTRS/ Sources/AFP)

•    UK GDP (Q3 A) Q/Q 0.5% vs. Exp. 0.3% (Prev. 0.1%)
•    UK Manufacturing PMI (Oct) M/M 47.4 vs. Exp. 50.0 (Prev. 50.8), lowest since June 2009
•    UK Nationwide House Prices SA (Oct) M/M 0.4% vs. Exp. 0.0% (Prev. 0.1%)
•    UK Nationwide House Prices NSA (Oct) Y/Y 0.8% vs. Exp. 0.5% (Prev. -0.3%) (RTRS)

EQUITIES

Concerns surrounding the Greek debt situation resurfaced after the Greek PM called for a referendum on the new EU aid package, and news that the Greek government is planning a vote of confidence this Friday. Risk for appetite was further dented following lacklustre manufacturing PMI data from China, which contributed to weakness in equities, with particular underperformance seen in the Italian FTSE MIB and Spanish IBEX 35 indices. Downbeat corporate earnings results from the likes of Credit Suisse together with weakness in French banking shares weighed on financials, whereas volumes remained light owing to All Saints' public holiday in Europe. In other news, strength in the USD-Index weighed upon the oil & gas and basic materials sectors. Moving into the North American open, equities continue to trade lower, with financials and industrials as the worst performing sectors.

FX

Strength in the USD-Index weighed upon EUR/USD, GBP/USD and commodity-linked currencies, whereas AUD came under further pressure after the RBA cut its benchmark interest rate overnight. Also, GBP did come under additional pressure after weaker than expected manufacturing PMI data from the UK, however gained briefly following higher than expected UK's third quarter advanced GDP reading. In other news, CHF traded lower on the back of market talk of the SNB checking rates.

•    RBA Cash Target (Nov) M/M 4.50% vs. Exp. 4.50% (Prev. 4.75%) (RTRS)

COMMMODITIES

Weakness was observed in WTI and Brent crude futures weighed upon by strength in the USD-Index, weaker than expected manufacturing PMI data from China, allied with an ongoing Eurozone debt crisis concerns.

Oil & Gas News:

•    OPEC's secretary general, Al-Badri said he is hopeful on members reaching agreement in December over cartel's production targets. He also added that current crude prices are comfortable for both consumer and producer countries. The OPEC secretary general mentioned that economic sanctions will harm but not stop Iran's oil industry. Al-Badri went on to add that Iraq’s crude production quota is unlikely to be discussed until end of 2012.
•    The IEA is not looking to another release of emergency oil stocks as the global supply situation has changed from that prevailing when inventories were released earlier this year, according to Deputy Director, Richard Jones.

 

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Tue, 11/01/2011 - 07:36 | 1831120 Blank Reg
Blank Reg's picture

I'm just going to go fondle my silver again.

Tue, 11/01/2011 - 07:41 | 1831129 Bobbyrib
Bobbyrib's picture

This news is temporarily deflationary. Until we hear news of the Fed, the ECB, (*edit I forgot Japan), or China printing assets will decrease in value.

Tue, 11/01/2011 - 07:40 | 1831126 smlbizman
smlbizman's picture

hey this mike mayo guy on cnbc...is he legit?

Tue, 11/01/2011 - 07:41 | 1831130 Cassandra Syndrome
Cassandra Syndrome's picture

Remain Calm

Tue, 11/01/2011 - 07:47 | 1831144 GeneMarchbanks
GeneMarchbanks's picture

'whereas AUD came under further pressure after the RBA cut its benchmark interest rate overnight.'

That's your China landing gauge right there. Make sure your seats in upright and tab- AAAAAAAAAAAAAAA!

Tue, 11/01/2011 - 07:47 | 1831147 EL INDIO
EL INDIO's picture

Greeek 1 year bond yealds over 194% (http://www.bloomberg.com/quote/GGGB1YR:IND)

Up 22.5% today from 154

It's a new record high.

Tue, 11/01/2011 - 07:53 | 1831153 peekcrackers
peekcrackers's picture

This black Friday will be a great litmus paper for the U S consumer, if we can find a un-fudge report.

Tue, 11/01/2011 - 08:26 | 1831272 msmith
msmith's picture

The SPX is looking to make a large gap open lower.  Looking for a correction before the move continues though. The DX is clearly bullish and GC has returned to the bearish correction.  "Risk off" is here as expected.  http://bit.ly/vkwvub

Tue, 11/01/2011 - 09:41 | 1831843 Grand Supercycle
Grand Supercycle's picture

As mentioned for some time, the bullish USD weekly chart continues to exert it’s influence and according to my analysis this will continue.

DOW chart showing bearish megaphone pattern warned of resumption of downtrend:

http://stockmarket618.files.wordpress.com/2011/10/2011-10-31_dow_dy_x.png

Do NOT follow this link or you will be banned from the site!