Manufacturing PMI data for eurozone, Germany, France, Italy, UK;
unemployment data for EU, Italy; UK nationwide house price index;
OECD regional outlook report; no major corporate updates
Shares are set to post mild gains in Europe on Monday after the
U.S. Congress averted a government shutdown. In Asia, stock
benchmarks mostly rose; Treasury yields advanced; the dollar
slightly strengthened; while oil gained amid supply concerns and
gold inched lower.
European stocks are poised to head slightly higher Monday, as
the threat of a U.S. government shutdown over the weekend passed,
after the House and Senate approved a stopgap spending bill that
President Joe Biden signed to avert the crisis.
Investors are looking forward to Monday's raft of European
manufacturing PMI figures, as well as a week of U.S. labor market
A number of U.S. economic reports are due, including the job
openings and labor turnover survey on Tuesday, the ADP private
payrolls report on Wednesday, the latest unemployment claims
numbers on Thursday, and the jobs report for September on
Investors have been "swinging back and forth" on whether the
U.S. economy is in for a recession or a "soft landing" engineered
at least in part by Federal Reserve interest-rate hikes to battle
inflation, said Northwestern Mutual Wealth Management Co.
The dollar nudged higher in Asia amid higher Treasury yields,
which increased the allure of U.S. fixed-income assets and demand
for the greenback.
Positive sentiment resulting from the U.S. government averting a
shutdown is driving U.S. yields higher, given that a shutdown would
have had some negative impact on growth, said RBC Capital
Prevailing market trends--higher yields, stronger dollar and
higher oil prices--should persist in the near term, it added.
Treasury yields gained amid a shifting economic outlook.
In the third quarter, the Fed raised interest rates once and
stuck to a hawkish guidance.
Increasing Treasurys issuance and Fitch's downgrade of the U.S.
government debt in August helped boost yields, which are forecast
to keep trading higher in the fourth quarter.
The Fed has two more rate decisions this year.
"Friday's PCE on a core basis, which removes food and energy
prices, suggests that inflation is continuing to decelerate,
meaning the Fed's aggressive campaign is working. The challenge is
that core PCE remains almost double the Fed's 2% target, prompting
the Fed to keep the possibility of another rate hike in play," said
BMO Family Office.
Oil futures rose in Asia, as the fall in U.S. oil inventories
and tight supply concerns resulting from cuts by Saudi Arabia and
Analysts expect these concerns are likely to dominate oil price
movements for the remainder of the year.
"That said, growing concerns of 'higher for longer' global
interest rates will cap upside pressures, " OCBC said.
Gold edged down amid elevated U.S. bond yields and a strong
"The higher-for-longer narrative we have seen with regard to Fed
monetary policy has weighed on sentiment for gold," ING said.
Meanwhile, ANZ noted that the precious metal sold off heavily
last week, with speculators having liquidated near 16 tons of long
positions for the week ended Sept. 26.
"With the US dollar remaining strong, we see little scope for a
strong rise in metal prices in the coming months, given their
historical inverse relationship with the greenback," BMI said.
Copper edged higher, supported by possible buying by
Price movements in the copper market have spurred CTA buying
activity over China's holidays, TD Securities said.
Although the strength in LME metals' prices may spark hopes of
an improving demand outlook, the brokerage's commodity return
decomposition framework continues to suggest weak demand and
confirms its view that price action is driven mainly by a short
squeeze amid a low-liquidity environment.
TODAY'S TOP HEADLINES
Americans Are Still Spending Like There's No Tomorrow
Consumers should be spending less by now.
Interest rates are up. Inflation remains high. Pandemic savings
have shrunk. And the labor market is cooling.
Congress Stopped a Shutdown, but Fights on Ukraine, Border
WASHINGTON-Republicans and Democrats set aside sharp policy
differences to avoid a government shutdown. Now, they have just
weeks to resolve fights over aid to Ukraine, heading off a surge in
border crossings and the overall size of the federal
The surprise weekend votes to fund federal operations through
mid-November avoided a partial closure that would have furloughed
workers and risked delaying paychecks. But Congress did nothing to
resolve the country's pressing fights on spending levels, aid to
Kyiv or immigration policy-it merely deferred them. Complicating
matters, House Speaker Kevin McCarthy (R., Calif.) is set to face
an effort this week to oust him from his leadership role, after his
harshest critic, Rep. Matt Gaetz (R., Fla.), said he would pursue a
motion to vacate.
China Comes Under Growing Pressure to Fix the Country's Housing
Pressure is building on Beijing to intervene more forcefully to
restore confidence in its reeling property market.
In the latest sign of stress for the market, people with
knowledge of Beijing's decision-making said authorities are
investigating whether Hui Ka Yan, the billionaire founder of
heavily indebted property developer China Evergrande Group,
attempted to transfer assets offshore while the company was
struggling to complete unfinished projects.
China's Economy Picks Up Steam for Holiday
SINGAPORE-China's economy is showing signs of perking up after
months of anemic growth, offering a glimmer of hope for the global
economy as higher interest rates squeeze consumers and businesses
in the U.S. and Europe.
Factories in September reported their first expansion in
activity since the spring, while railway and flight bookings point
to a bumper week ahead for tourism as China takes a break to
celebrate its weeklong National Day holiday.
How Ukraine Tricks Russia Into Wasting Ammunition
Russian forces have destroyed about half the battlefield
equipment that Ukrainian company Metinvest has produced for the
country's military. Managers want Russian troops to target more of
At a workshop in central Ukraine, workers are busy making parts
for howitzers, radar stations and mortars. They are all fakes.
Metinvest churns out high-quality replicas that serve as decoys,
seeking to lure Russian fire.
In U.S. Fights Over Ukraine Aid, Allies Fear Deeper Global
U.S. political fights and presidential-election campaign
rhetoric are casting a shadow over battlefields in Ukraine.
Kyiv's fight to beat back invading Russian troops depends on
American equipment, training and intelligence. President Biden has
led a global campaign to rally support for Ukraine and to impose
sanctions on Russia.
U.S. Seeks to Calm Tensions in Balkans
U.S. officials sought to defuse rising tensions in the Balkans,
as a surge in violence there pushed NATO to boost its presence in
the area and threatened to trigger a broader conflict between
Serbia and Kosovo.
Long-simmering tensions between Serbia and Kosovo escalated into
violence last weekend when Kosovo police and well-armed Serbian
gunmen engaged in a fierce battle. At the same time, the U.S.
warned that Serbia has deployed troops on the border with
France Probes LVMH CEO Arnault Over Deal With Russian
PARIS-French prosecutors are investigating a deal between French
billionaire Bernard Arnault and a Russian businessman for possible
The Paris prosecutor's office said Friday that its investigation
follows an alert from France's anti-money-laundering unit Tracfin,
and that a preliminary probe has been under way since 2022. It
declined to comment further.
For Tesla's Cybertruck, Another Sales Launch Date Comes and
Tesla Chief Executive Elon Musk had stoked hopes this spring
that the Cybertruck would finally arrive in the third quarter.
Turns out, buyers are going to have to wait a little longer.
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Expected Major Events for Monday
00:01/IRL: Sep Ireland Manufacturing PMI
05:00/NED: Sep Netherlands Manufacturing PMI
06:00/UK: Sep Nationwide House Price Index
06:30/SWI: Aug Retail Sales
07:00/TUR: Sep Turkey Manufacturing PMI
07:00/POL: Sep Poland Manufacturing PMI
07:15/SPN: Sep Spain Manufacturing PMI
07:30/CZE: Sep Czech Republic Manufacturing PMI
Purchasing Managers' Index
07:45/ITA: Sep Italy Manufacturing PMI
07:50/FRA: Sep France Manufacturing PMI
07:55/GER: Sep Germany Manufacturing PMI
08:00/ITA: Aug Unemployment
08:00/GRE: Sep Greece Manufacturing PMI
08:00/EU: Sep Eurozone Manufacturing PMI
08:30/UK: Sep S&P Global / CIPS UK Manufacturing PMI
09:00/EU: Aug Unemployment
09:00/GRE: Aug Labour Force Survey
09:00/CYP: Aug Retail trade
16:59/AUT: Sep Unemployment figures
23:01/UK: Sep Shop Price Index
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(END) Dow Jones Newswires
October 02, 2023 00:15 ET (04:15 GMT)
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