Capital Markets: Non Much Going On Today

From Marc to Market:

US Goes to the Polls

Overview: The USA dollar is narrowly mixed against the major currencies today, largely consolidating its recent losses. Equities are mixed. In Asia, Japan, Australia, too Hong Kong equities gained to a greater extent than or less 1%, piece most other bourses were softer. In Europe, the Dow Jones Stoxx 600 is picayune changed inwards belatedly morn turnover. Ten-year benchmark yields are to a greater extent than ofttimes than non firmer, amongst Italy upwards iii footing points, the most inwards Europe. Although at that topographic point possess got been several economical reports today, investors seem to a greater extent than ofttimes than non sidelined waiting for the USA election results too FOMC meeting.

Asia-Pacific
China reported a $16 bln Q3 electrical current describe organization human relationship surplus. This follows a $5.3 bln surplus inwards Q2 too a $34 bln deficit inwards Q1. This agency that through September, PRC experienced a electrical current describe organization human relationship deficit. The electrical current describe organization human relationship deficit partly reflects a deterioration inwards the price of trade. The cost of its imports rose relative to the cost of exports. Think virtually crude too Fe ore imports too manufactured goods exports. Also, China's outbound tourists are picked upwards equally service import. Still, China's electrical current account, similar the USA too Germany's, is driven yesteryear the merchandise account. Other developed countries, similar Switzerland too Japan, investment income remainder overwhelms the merchandise remainder inwards the electrical current describe organization human relationship calculations.

The yuan is slightly firmer today, too it is off almost 6% this yr against the dollar. Although the USA Treasury did non discovery China's actions attain the threshold of "manipulation" too possess got non since 1994, Treasury Secretary Mnuchin has said he is opened upwards to changing the definition. Why is the yuan weaker against the dollar? Occam's Razor favors unproblematic explanations. Here's i that seems under-appreciated: At the laid about of the year, China's 10-year onshore yields was 170 bp to a greater extent than than the US. Now it is below 35 bp.

Nippon reported a dreadful identify spending information for September. Due to the natural disasters, it was accepted that consumption eased from the 2.8% mensuration inwards August, which was a three-year high. However, rather than moderate to a 1.5% mensuration equally the median forecast would possess got had it, it contracted yesteryear 1.6%. This increases the lead a opportunity that the world's third-largest economic scheme contracted inwards Q3, equally it did inwards Q1. Early information for Q4 suggests growth returned.

The dollar continues to bump against resistance inwards the JPY113.35-50 area. The lower terminate of the recent arrive at is seen nigh JPY112.50. There is an expiring JPY113.25 selection for $620 mln that is inwards play. There are some other nearly $900 mln inwards options betwixt JPY112.85 too JPY113.00 that too expire today.

The Reserve Bank of Australia met and, equally widely anticipated, kept the cash charge per unit of measurement at the tape depression of 1.5%. Growth was upgraded to 3.5% this yr too next, piece unemployment is expected to repose to 4.75% cast 5% over the side yesteryear side 2 years. Offsetting this was continued concerns virtually the belongings markets (especially inwards Sydney too Melbourne). The Australian dollar is consolidating that the upper terminate of final week's range. So far, it is the commencement session inwards a month, that the Aussie has non traded below $0.7200.

Europe
The Bundesbank's recent warning that Europe's largest economic scheme too the world's fourth-biggest may possess got stagnated inwards Q3 appears to score the bottom of FRG soft patch. Today, FRG reported a 0.3% increment inwards manufacturing works life orders. It was the instant increment inwards a row too exclusively the 3rd of the year, though the increment missed the median forecast for a 0.5% increase. Domestic orders rose 2.8%, too export orders brutal 1.4%, which non because of involve from EMU, which saw its orders outpouring 7.8%....MORE

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