NZX Set for 4th Weekly Gain
New Zealand’s main stock index opened higher on Friday, set for its fourth straight weekly gain as enthusiastic investors continued their buying on expectations for a continued economic recovery. The NZX 50 index reached a record peak of 12,544 on October 14, however, some enthusiasm faded recently amid rising coronavirus cases worldwide and uncertainty over a US coronavirus stimulus deal. Meanwhile, Jacinta Ardern is on track to win a second term as PM.
New Zealand Manufacturing PMI Rises Further
The BusinessNZ Performance of Manufacturing Index in New Zealand increased to 54 September 2020 from an upwardly revised 51 in the previous month, amid the easing of coronavirus lockdown measures. All but one of the key sub-indices improved in September and both new orders (58.1 vs 54.2 in August) and production (56.5 vs 51.6) expanded further and stood well into expansion territory. In addition, employment returned to growth (51.6 vs 49.2). In contrast, deliveries (49 vs 50) fell to contraction. “Although the September PMI pushed above its long-term average of 53.0, it should not be confused with above average activity levels. Rather, it indicates growth off the low base set earlier in the year. Growth has not yet been enough to recoup previous loses, but some progress is being made", said BNZ Senior Economist, Doug Steel.
Hong Kong Dollar Strength Persists
Hong Kong’s currency has been hovering near the strong end of its trading band since April supported by capital inflows from China, while local borrowing costs remain higher than those on the US dollar.
Mexican Stocks Edge Up
Mexico’s IPC gained 34 points or 0.1% to 38,059 on Thursday, as the IMF’s upward revision to the 2020 GDP growth forecast and better than expected domestic data outweighed fiscal uncertainty in the US and rising coronavirus cases and further lockdowns in Europe. The IMF revised its to -9% its Mexican GDP growth forecast for 2020 from -10.5% GDP in June. On Tuesday, INEGI data showed that industrial production continued to recover, rising 3.3% mom in August.
Brazilian Equities Drop 0.3%
Brazil’s Ibovespa lost 280 points or 0.3% to 99,054 on Thursday amid concerns over rising coronavirus infections and fresh lockdown restrictions in several countries around the world. In Europe, Portugal and France declared a public health emergency, while the United Kingdom extended lockdowns. On the domestic data front, the central bank’s IBC-Br index, a proxy for monthly GDP growth, rose by 1.06% in August, below consensus of a 1.7% increase and July’s 2.15% growth.
US Coronavirus Cases Near 8M
The number of confirmed coronavirus cases in the United States closed in on eight million with Wisconsin and other states in the US Midwest facing record rises in infections as we approach the flu season and the winter months. The global coronavirus pandemic has now infected more than 38 million people and claimed over 1 million lives.
US Stocks Drop for Third Session
Wall Street closed in the red for a third session, as fiscal uncertainty continues and the second coronavirus wave in Europe intensifies. On Thursday, Treasury Secretary Steven Mnuchin said that the White House won’t let differences over funding targets for coronavirus testing detail aid negotiations. Meanwhile, France declared a public health emergency and the United Kingdom extended lockdowns. On the corporate side, United Airlines posted a $1.8 billion net lost, dragged by the pandemic slump. On the data front, 898 thousand American workers filled for jobless benefits last week, well above market expectations of 830 thousand. The Dow Jones retreated 20 points or 0.1% to 28,494. The S&P 500 lost 5 points or 0.2% to 3483. The Nasdaq dropped 55 points or 0.5% to 11,714.
TSX Snaps 2-Day Losing Streak
Canada's main stock index broke a two-day losing streak on Thursday, supported by a jump in shares of fashion retailer Aritzia following continued momentum from its e-commerce revenue. Still, investors were cautious as uncertainty over a US coronavirus stimulus deal remained. On the data front, a report from payroll services provider ADP showed private businesses in Canada shed 240,800 jobs in September extending a run of declines that began in March.
Dollar Index Near 2-Week High
The dollar index is on track for strong weekly gains, hovering around 93.8, reining as the preferred safe-haven currency on doubts over an additional round of US fiscal stimulus and disappointing economic data. Initial jobless claims in the US were the highest in near two months, casting a shadow on economic recovery. At the same time, rising coronavirus cases in Europe and Brexit uncertainty spooked investors away from the euro and sterling.
Wheat Hits Near 6-year High
Wheat prices skyrocketed to a near 6-year high of 618.25 USd/Bu in mid-October, driven by supply disruptions due to prolonged dry weather in the US Great Plains, Argentina and Russia. Along with tighter supplies were continued robust demand for basic foodstuff in the wake of rising coronavirus cases worldwide.
Commodities: Lean Hogs -11.07%, Natural gas +5.20%
Top commodity losers are Lean Hogs (-11.07%), Baltic Dry (-4.64%) and Bitumen (-4.60%). Gains are led by Natural gas (5.20%), Oat (3.24%) and Wheat (3.11%).
Wall Street Pares Losses
US stocks pared some losses in afternoon trading on Thursday but remained in negative territory as doubts over an additional round of US fiscal stimulus and disappointing jobless claims report rattled sentiment. Investors continued to dump some tech-related shares, putting the tech-heavy Nasdaq Composite on track to close down more than 1%
Argentine Peso Hits All-time Low
The Argentine peso depreciated further to cross 77.48 against the USD, its lowest level on record, as investors lose confidence in the government’s capacity to stabilize the economy amid a gruelling domestic economic crisis and the ongoing coronavirus pandemic.
Senegal Inflation Rate Ticks Down to 2.8% in September
The annual inflation rate in Senegal eased to 2.8 percent in September of 2020 from 3 percent in August which was the highest in four months. Prices slowed mostly for food & non-alcoholic beverages (4.2 percent vs 4.8 percent in August); transport (4.2 percent vs 4.3 percent) and housing & utilities (1 percent vs vs 1.1 percent). In addition, cost continued to decrease for clothing & footwear (-0.8 percent vs -1 percent). On a monthly basis, consumer prices were up 0.2 percent, decelerating sharply from a 2.2 percent rise in the previous month.
Russia Industrial Output Falls Less than Expected
Industrial production in Russia declined 5 percent year-on-year in September of 2020, following a downwardly revised 4.2 percent fall in the previous month and compared to market expectations of a 5.9 percent drop. It was the sixth consecutive monthly decline in industrial activity. Output fell for distribution of electricity & gas (-2.6 percent vs -2.1 percent in August); manufacturing (-1.6 percent vs 0.4 percent); extraction of raw materials (-10 percent vs -10.6 percent) and distribution of water & sewage (-3.8 percent vs -5.2 percent). On a monthly basis, industrial output showed no growth, after a 3.5 percent rise in August.
Israel Consumer Prices Fall for 6th Month
Israel's consumer prices decreased 0.7 percent year-on-year in September of 2020, following a 0.8 percent fall in the previous month and matching market expectations. It was the sixth consecutive month of deflation, amid the ongoing pandemic crisis. Prices continued to decline for clothing & footwear (-6.3 percent vs -5.9 percent in August); transport & communication (-2.7 percent vs -3.6 percent); education, culture and entertainment (-0.7 percent vs -0.8 percent) and furnishings (-1.1 percent, the same pace as in August). Meantime, food cost slowed slightly (0.1 percent vs 0.2 percent) but housing prices advanced further (0.8 percent vs 0.7 percent). On a monthly basis, consumer prices dropped 0.1 percent, after being flat in the previous month, and in line with market expectations.
Baltic Index Falls for 7th Session
The Baltic Dry Index fell for the seventh straight session to $1,561 on Thursday, moving further away from an over one-year high of 2,097 reached last week as capesize vessel rates extended losses. Still, strong iron ore demand from China through the fourth quarter is expected to support the market. Overall, dry bulk trade is expected to continue to recover. In particular, grain and soya segment is likely to keep growing as a downturn in estimated European grain production could boost imports. On the other hand, prospects for coal remain subdued amid sharp reduction in energy demand due to the coronavirus pandemic and sustained moves toward cleaner fuels. Also, the miner bulk category, comprising around two-fifths of global dry bulk trade, in particular those connected to construction activity and manufacturing industries, are expected to remain depressed amid pandemic control measures.
Colombia Retail Sales Fall at a Faster Pace in August
Colombia's retail sales slumped 17.1 percent year-on-year in August 2020, following a 12.4 percent decrease in the previous month and compared with market consensus of a 9.5 percent drop. It was the sixth consecutive decrease in retail trade, amid the coronavirus pandemic. In August, 15 out of 19 major retail categories recorded decreases, in particular fuels (-21.4 percent); other automotive vehicles & motorcycles (-40.5 percent); automotive vehicles & motorcycles (-33.4 percent); clothing & textiles (-45.7 percent); spare parts, accessories and lubricants for vehicles (-22 percent); food (-4.5 percent) and footwear & leather goods (-54.2 percent). On a monthly basis, retail trade went down 2.7 percent, after rising 1.1 percent in the prior month.
Silver Remains Under Pressure
Silver traded lower around $24 an ounce on Thursday, having hit an over one-week low of $23.6 earlier in the session, amid a strengthening dollar. Concerns over a slowing recovery mounted after latest data showed initial jobless claims in the US reached the highest in near two months. The unexpected rise in US layoffs comes as the Trump administration and Congressional Democrats remain deadlocked over a new round of coronavirus relief aid. US Treasury Secretary Steve Mnuchin said on Wednesday that a new economic relief bill is unlikely before the presidential election on November 3rd.
Colombia Manufacturing Output Drops More than Expected in August
Manufacturing production in Colombia plunged 10.3 percent over a year earlier in August 2020, after dropping 8.5 percent in the previous month and compared with market expectations of a 7.8 percent fall. It was the fifth successive decline in manufacturing output, amid the coronavirus crisis. In August, 35 out of 39 activities registered declines, namely beverages (-16.8 percent); clothing (-30.9 percent); coking, oil refining, and fuel blending (-14 percent); iron & steel (-21.3 percent); plastic products (-10.2 percent); and non-metallic minerals (-7.3 percent). On a seasonally adjusted monthly basis, manufacturing output went up 0.7 percent, after increasing a downwardly revised 4 percent in the prior month.
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