Americans’ urge to shop is overriding anxiety about the economy.

Today’s Data & journal links

Data sheets describing major market metrics, news and a journalling area for trading records in the centre of the pdf.

News and Views in brief

While household-sentiment measures are at levels typically observed during a recession, an increase in spending during the third quarter boosted growth to the highest level of the year, Commerce Department figures showed Oct. 27. The schism partly reflects consumer ire with the government’s failure to reduce 9.1 percent unemployment or stem rising deficits, said James Paulsen, chief investment strategist at Minneapolis-based Wells Capital Management.http://www.bloomberg.com/news/2011-10-30/economy-improving-as-u-s-consumer-shows-what-s-done-refuting-what-s-said.html

European governments are running into initial resistance as they seek to use this week’s Group of 20 summit to turn early praise for their revamped crisis- fighting strategy into financial support.

The G-20 leaders convene Nov. 3-4 in Cannes, France, a week after euro-area authorities pledged to magnify the capacity of their rescue fund to 1 trillion euros ($1.4 trillion) and look beyond their borders for help in doing so as they combat the debt turmoil posing the biggest threat to global growth.

While the help of China and cooperation of the International Monetary Fund were immediately sought, pledges of hard cash are proving hard to come by as G-20 members press for more details of the plan. In an indication Europe may eventually prevail, Brazilian and Russian officials said their governments may be willing to provide assistance. http://www.bloomberg.com/news/2011-10-31/europe-seeking-crisis-fighting-funds-faces-resistance-before-cannes-g-20.html

Hopes for a bounce in Britain's ailing economy were dealt a blow on Monday after data showing a slowdown in mortgage lending alongside a modest pick-up in unsecured lending highlighted the tough conditions faced by hard-pressed consumers. http://uk.reuters.com/article/2011/10/31/uk-mortgage-approvals-idUKLNE79U01O20111031

Indexes –

U.S. stock futures fell, indicating the Standard & Poor’s 500 Index will trim its biggest monthly rally since 1974, on concern European leaders will struggle to raise funds to contain the region’s debt crisis.

Morgan Stanley and Citigroup Inc. dropped more than 1.8 percent, following declines in European lenders. Alcoa Inc. and Ford Motor Co. slumped at least 1.1 percent to pace losses in companies most-tied to economic growth. Chevron Corp. erased 1 percent, while SanDisk Corp. decreased 2.5 percent after analysts slashed their recommendations for the shares.http://www.bloomberg.com/news/2011-10-31/u-s-stock-futures-drop-as-europe-woos-china-for-bailout-fund.html

European stocks dropped, paring their biggest monthly gain since July 2009, as some investors remain reluctant to buy equities before the euro area’s leaders explain how they will fund their expanded bailout facility. U.S. index futures and Asian shares fell.

The Stoxx Europe 600 Index slid 1.1 to 246.19 at 12:21 p.m. in London, paring its monthly gain to 8.8 percent, the largest advance in more than two years. The gauge slipped 0.2 percent on Oct. 28, having rallied 3.6 percent the previous day, after the euro area’s leaders said they will boost the European Financial Stability Facility’s capacity in a bid to stem the debt crisis. The gauge jumped 4.2 percent last week, its fifth straight weekly gain. http://www.bloomberg.com/news/2011-10-31/european-u-s-stock-futures-decline-vestas-may-drop-barclays-may-move.html

Currencies

Currency markets were in risk aversion mode on Monday, but investors were limited in their choice of havens after intervention to weaken the yen by Japan left the dollar as the only safe bet. Indeed, the US currency was up 1.1 per cent to $1.3987 against the euro and gained 0.7 per cent to $1.6006 versus the pound.

Riskier currencies saw deeper losses. The Australian dollar, sought out under conditions of stronger risk appetite for its higher yield, fell 1.5 per cent to $1.0552. The dollar index, a measure of the dollar’s strength relative to a basket of six other currencies, gained 1.3 per cent to 76.037.http://www.ft.com/cms/s/0/7193770a-03ac-11e1-bbc5-00144feabdc0.html?ftcamp=rss#axzz1cMZhGdji

The US Dollar Index was broadly under pressure on account of overall optimism over the solution to the European debt crisis. Better recovery from the United States too was favourable for high-yielding currencies.

The European banks were downgraded, which hardly shocked market participants as investors knew very well that European banks are poorly placed due to the mounting debt on their balance sheet.

Despite risk aversion, the markets rallied as all this news was fairly priced-in and the greenback was under immense pressure throughout the fortnight.

http://www.moneycontrol.com/news/rupee/fortnightly-outlook-for-currencies-nirmal-bang_607944.html

Commodities: -

World equities fell on Monday after commodity shares were hit by a stronger dollar which jumped in the wake of Japanese intervention to weaken the yen, while returning doubts over the EU's plan to solve the debt crisis added to the cautious tone.

U.S. crude futures also fell, by 0.8 percent, as the dollar hit a three-month high, making commodities priced in the greenback more expensive for investors holding other currencies, cooling demand.http://www.reuters.com/article/2011/10/31/us-markets-global-idUSTRE79N45620111031

Oil fell in New York on speculation demand will falter after the biggest monthly gain in more than two years and a surge in the dollar. Brent’s premium to U.S. crude was near its lowest in almost four months.

Futures fell as much as 1.2 percent after Japan took steps for the third time this year to weaken the yen against the dollar, making commodities priced using the U.S. currency less attractive to investors. Crude prices at $80 to $100 are “reasonable,” the United Arab Emirates’ energy minister said in Singapore today. Oil is up 17 percent in October, the biggest monthly increase since May 2009. http://www.bloomberg.com/news/2011-10-31/oil-declines-paring-biggest-monthly-increase-since-may-2009.html

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Americans’ urge to shop is overriding anxiety about the economy.