US stocks inked fresh records on Friday spurred by a better-than expected jobs report, outweighing the negative sentiment that came with manufacturing remaining in contraction territory. The US economy added 128,000 new jobs in October, significantly higher than the 75,000 expected in a MarketWatch poll; in addition, the August and September reports were revised upwards by a total 95,000. The ISM manufacturing report for October came in at an improved 48.3, contraction territory still but an improvement from September’s 47.8. The S&P and the NASDAQ gained 0.97% and 1.13% to record highs while the DOW rose 1.11%, within 0.2% of it record high. Yield on 2Y and 10Y USTs closed higher at 1.5520% and 1.7103% respectively.
UK manufacturing saw limited manufacturing at the beginning of Q4 according to the latest IHS Markit release. PMI for manufacturing rose to 49.6 in October from 48.3 in September, in addition to being above expectations of a decline to 48.1 in a Reuters poll. The increase was primarily due to companies increasing their stocks as they prepared for the then Brexit deadline of October 31. The PMI sub-index for stock purchases rose to 55.57 in October versus 53.64 in September. The pound closed about flat at $1.2946 while yield on 10Y and 30Y UKTs closed higher at 0.663% and 1.165%.
Asian stocks were higher on Monday spurred by momentum on US stocks as well as positive sentiment on trade talks. US Commerce Secretary Wilbur Ross said there wasn’t any reason a Phase 1 deal would not be reached this month and also mentioned that licences for US companies to deal with Huawei would be issued “very shortly.” The HANG SENG led gains up 1.65% on the day while the CSI and ASX closed 0.58% and 0.27% higher.
Turkey inflation slowed to an annual 8.3% in October from 9.3% in September according to a Turkstat release on Monday; the figure was in line with the median estimate in a Bloomberg poll. The belief however is that the deceleration in inflation is beginning to lose momentum as effects of a high base of comparison following last year’s price spike wears off. The impending reversal in inflation therefore means that the central bank will have little, if any, room for further monetary easing at the next policy meeting in December. The lira closed about flat at 5.7127 to the dollar while TURKEY 29s and 47s were higher in the low 108s.
Brazili’s industrial production rose 0.3% month-on-month in September, some way below the expected 0.9% in a Bloomberg survey; the YoY growth was 1.1%. Production of capital goods, a gauge of investment, fell 0.5% from August as only 11 of the 26 industrial sectors expanded during the month. The real closed firmer at 3.9914 to the dollar while BRAZIL 29s were higher, trading in the mid 106s.
Russia’s average daily oil production was above its OPEC+ target for yet another month in October, albeit with the smallest compliance gap since the Druzhba contamination crisis earlier this year. The country pumped a daily average of 11.229 million barrels a day according to Bloomberg calculations, 39,000 barrels a day above its cap. The Energy Ministry however sees a compliance gap of just 17,000 barrels a day. Save the three months of the Druzhba-induced production cuts, has failed to meet its obligations for seven months of this year. The ruble closed firmer at 63.5235 to the dollar while RUSSIA 29s were up, trading in the high 108s.
Kenya’s current account deficit narrowed to 4.1% of GDP in the year to September according the Central bank of Kenya’s weekly report. The figure, down from 5% in December, reflects slower import growth and strong diaspora remittances, commented the central bank. Forex reserves were up slightly at $8.96 billion for the week ending October 31 compared to $8.94 billion a week earlier. The shilling was slightly unchanged at 103.29 to the dollar while KENINT 48s were about a point higher, trading in the high 106s.