Morning Call For Tuesday, Oct. 31


Dec E-mini S&Ps (ESZ17 +0.14%) this morning are up +0.16% and European stocks are up +0.24% at a 2-year high. Gains in European stocks are leading U.S. stocks higher after Eurozone Q3 GDP rose at a stronger-than-expected +2.5% y/y pace, the most in 5-1/2 years. Also, the Eurozone Sep unemployment rate fell to a 7-1/2 year low of 8.9% and after Eurozone Oct inflation unexpectedly slowed as the Oct core CPI fell below 1.0% for the first time in 5-months. Gains in equities were limited on Chinese growth concerns after the China Oct manufacturing PMI fell more than expected. Asian stocks settled mixed: Japan unch, Hong Kong -0.32%, China +0.09%, Taiwan +0.34%, Australia -0.17%, Singapore -0.06%, South Korea +0.97%, India -0.16%. Japanese stocks settled little changed after the BOJ maintained its benchmark rate and asset purchase target but raised its Japan 2017 GDP forecast and lowered its core inflation estimate.

The dollar index (DXY00 +0.06%) is up +0.09%. EUR/USD (^EURUSD) is down -0.19%. USD/JPY (^USDJPY) is up +0.19%.

Dec 10-year T-note prices (ZNZ17 -0.07%) are down -3 ticks.

The Eurozone Oct CPI estimate rose +1.4% y/y, weaker than expectations of +1.5% y/y. The Oct core CPI rose +0.9% y/y, weaker than expectations of +1.1% y/y and the smallest pace of increase in 5-months.

The Eurozone Sep unemployment rate fell -0.1 to 8.9% from a downward revised 9.0% in Aug, better than expectations of -0.1 to 9.0% and a 7-1/2 year low.

Eurozone Q3 GDP rose +0.6% q/q and +2.5% y/y, stronger than expectations of +0.5% q/q and +2.4% y/y with the +2.5% y/y gain the fastest pace of growth in 5-1/2 years.

The China Oct manufacturing PMI fell -0.8 to 51.6, weaker than expectations of -0.4 to 52.0.

The BOJ with an 8-1 vote kept its benchmark rate at -0.1% and its 10-year bond yield target at 0.0% with no change to its bond buying pace in Nov from Oct. The BOJ also raised their Japan 20178 GDP forecast to 1.9% from a previous forecast of 1.8% and lowered its Japan 2017 core inflation estimate to 0.8% from an earlier estimate of 1.1%.


Key U.S. news today includes: (1) Q3 employment index (expected +0.7%, Q2 +0.5%), (2) Aug S&P CoreLogic composite-20 home prices (expected +0.40% m/m and +5.9% y/y, Jul +0.35% m/m and +5.81% y/y), (3) Oct Chicago PMI (expected -5.2 to 60.0, Sep +6.3 to 65.2), (4) Oct Conference Board U.S. consumer confidence (expected +1.2 to 121.0, Sep -0.6 to 119.8), (5) FOMC begins 2-day policy meeting.

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Author: Travis Esquivel

Travis Esquivel is an engineer, passionate soccer player and full-time dad. He enjoys writing about innovation and technology from time to time.

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