US stocks kicked off the month in strong fashion ahead of the Fed meeting on Monday. Buoyed by strong Q3 earnings, the NASDAQ rose 0.63% while the DOW and the S&P rose 0.26% and 0.18% respectively to ink fresh records in each case. The moves were somewhat held back by a slightly lower ISM Manufacturing Index for October at 60.8 compared to September’s 61.1. Yield on 10Y USTs closed about flat at 1.5557%.
German retail sales surprised to the downside in September slowing 2.5% against an expected 0.6% gain; annual figures also slowed by 0.9% against an expected 1.8% gain. The data came sandwiched between Q3 GDP data which showed 1.8% QoQ growth on Friday and manufacturing PMIs due on Tuesday. Yield on 10Y DBRs were slightly lower at -0.102% while the euro was slightly firmer at $1.1606.
Asia stocks traded mostly lower on Tuesday with major indices sliding from opening levels. The CSI led losses, down 1.04%, while the HANG SENG spectacularly shed early gains of about 1% to trade about 0.4% lower as the session closed. The ASX also shed 0.63% as the RBA officially dropped the 0.1% yield target on April 2024 notes.
Economists upped their end-2022 Selic forecast to 10.25% in the latest central bank survey, a revision from the previous week’s 9.50% and the first time the figure has run into double digits. Elsewhere, Congress is set to vote on a legislative amendment that would make room for increased social spending. The real continued its losing trend from last week, closing lower on Monday at 5.6863 to the dollar while BRAZIL 30s were higher, trading about 4.86%.
ZAMBIN traded firmer on Monday following the budget presentation with investors showing confidence in the government’s plans to get fiscus back on track. The budget also saw tax breaks announced for mining companies and a drastic cut to the budget deficit from an estimated 10.4% in 2021 to 6.7% in 2022. Also of note, the country also expects restructuring talks with creditors to conclude early next year before borrowing $750 million to refinance the 2022 notes.