Oct 31, 2018, by Lorcan Roche Kelly
The rebound that began in U.S. markets yesterday has spread through Asia into European markets. Overnight the MSCI Asia Pacific Index gained 1.6 percent while Japan’s Topix index closed 2.2 percent higher as the Bank of Japan maintained its easy-money policy. In Europe the Stoxx 600 Index was 1.4 percent higher at 5:45 a.m. Eastern Time as some strong corporate results added to the rebound. S&P 500 futures pointed to more gains at the open, the 10-year Treasury yield was at 3.149 percent and gold slipped further.
Headline inflation in the euro area in October was in line with forecasts at 2.2 percent, according to Eurostat’s flash estimate published this morning. The core number, which strips out volatile food and energy prices, rose to 1.1 percent. This data against yesterday’s disappointing growth number may prove a challenge for the European Central Bank’s policy response. Pacific Investment Management Co.’s Andrew Bosomworth is predicting that the ECB won’t get far above zero when it does start to hike rates because the bank is now so far out of sync with the U.S. business cycle.
President Donald Trump visited Pittsburgh yesterday to offer condolences in the wake of a Synagogue shooting there at the weekend which left 11 people dead. With less than a week to go to the election to decide on which party controls Congress, Republicans are becoming concerned that their voters are losing enthusiasm. Today Trump begins an eight-state 11-rally final campaign push in Florida, with the timetable suggesting GOP strategists have all but given up hope of holding the House majority and are now focused on maintaining control of the Senate.
Oil’s bad month
Crude is poised for its worst month since July 2016 as worries continue over the global economy and major producers offer mixed signals on where they see production headed. Concerns over sanctions on Iran hurting global oil supply seem to have largely eased ahead of the imposition of the U.S. ban next week. Producers pumping more oil to offset the Iran shortage are taking new routes and driving a boon for global supertankers. At 10:30 a.m. the latest U.S. inventory report is due.
At 8:15 a.m. the October ADP employment change report is due, with expectations for American Businesses to have added 187,000 jobs in the month, down from 230,000 in September, a number which may give some guidance for this week’s jobs report. Chicago PMI is due at 9:45, and Brazil’s central bank is expected to hold rates unchanged when it announces the Selic rate later. In earnings today, General Motors Co., Fitbit Inc., and Yum! Brands Inc. are among those reporting results.