China PMI Drops to Lowest in Almost 3 Years (Bloomberg)
A Chinese manufacturing index dropped to the lowest level since February 2009, bolstering the case for fiscal or monetary loosening to support the expansion of the world’s second-biggest economy. The Purchasing Managers’ Index fell to 50.4 in October from 51.2 in September, the China Federation of Logistics and Purchasing said in a statement today. That was lower than any of 16 economist estimates in a Bloomberg News survey that had a median forecast of 51.8. A reading above 50 indicates expansion. An index of export orders contracted for the second time in three months as Europe’s failure to resolve its debt crisis dims the outlook for shipments to China’s biggest market. South Korea reported today the weakest export growth since 2009 and Taiwan’s government said yesterday that the island’s economy expanded by the least in two years.
The PMI reading “is a reflection of slowing momentum in the economy” and exports may “slow sharply in coming months,” said Wang Tao, a Hong Kong-based economist at UBS AG. “Policy will ease more visibly in the first quarter of 2012.” A separate manufacturing index released today by HSBC Holdings Plc and Markit Economics rose to 51 from 49.9. The surveys have different sample sizes and methodologies. Premier Wen Jiabao said last week that economic policies will be “fine-tuned” as needed. That fueled speculation that the government may ease reserve requirements for smaller banks and add fiscal stimulus, putting growth ahead of inflation risks.
Asia Stocks Fall, Bond Risk Climbs on Outlook (Bloomberg)
Asian stocks fell, South Korea’s won weakened and the cost of insuring bonds against default rose as data added to evidence that regional economies are slowing as Europe’s debt crisis curbs exports. The MSCI Asia Pacific Index slipped 0.9 percent at 11:15 a.m. in Tokyo. Standard & Poor’s 500 Index futures lost 0.4 percent. The euro weakened 0.1 percent to $1.3845 and the yen was little changed, after a 3.1 percent slump yesterday. South Korea’s won slipped 0.2 percent. The Markit iTraxx Australia index of debt-default risk headed for the biggest increase in four weeks. Oil fell for a third day in New York. China’s manufacturing, South Korean exports and Taiwan’s economy are all expanding at the slowest pace since 2009, based on data released since late yesterday. Greek Prime Minister George Papandreou pledged to hold a referendum on the European Union’s latest bailout plan for the nation, days before Group of 20 leaders gather Nov. 3-4 for a summit in Cannes, France, to discuss the debt crisis.
GLOBAL MARKET-Euro debt worry, firmer dollar hurt riskier assets
TOKYO, Nov 1 (Reuters) - Renewed worries about a slow progress in resolving the euro zone's debt crisis and a firmer dollar dampened investor appetite for risk, sending Asian shares and commodities lower on Tuesday while keeping pressure on the euro.
"The depth and breadth of unanswered questions from Thursday's EU deal, the spectacle of euro-peripheral bonds yields/yield spreads mostly higher on Monday and general support afforded the USD from the BOJ's intervention, ensured EURUSD traded down in fits and starts throughout Monday," BNP Paribas analysts wrote in a note.
COMMODITIES-Oil, gold, copper trim monthly gains as dollar jumps
NEW YORK/LONDON, Oct 31 (Reuters) - Oil, copper and gold slid on Monday, trimming gains for the month after intervention by Japan to stem the yen's rise sent the dollar soaring and doubts grew about a deal to tackle the European debt crisis.
"You have to chalk that up as the number-one negative for commodities in general on the day," said Bill O'Neill, partner of LOGIC Advisors in Upper Saddle River, New Jersey.
Oil edges lower on dollar, but posts monthly gain
NEW YORK, Oct 31 (Reuters) - Oil prices slipped in low-volume trading on Monday, but posted big monthly gains, as the dollar rose against the yen after Japan intervened in the market to stem the rise of its currency.
"It's not going to be as easy moving accounts over to a new firm. There are going to be a lot of people in line and so I would think that it's going to be a very volatile, low volume week," said Carl Larry, of Blue Ocean Brokerage.
Natural gas ends up, milder forecasts limit gains
NEW YORK, Oct 31 (Reuters) - U.S. natural gas futures ended slightly higher on Monday after late short covering, but moderating weather forecasts for the Northeast and Midwest and concerns about growing supplies helped limit the upside.
"I'm surprised we ended up today. It doesn't look like there's going to be much demand over the next two weeks, and cash is trading 30 cents under futures," said Gelber & Associates analyst Pax Saunders in Houston.
Euro Coal-Prices steady, poor demand pressure mounts
LONDON, Oct 31 (Reuters) - European prompt physical coal prices were steady on Monday despite a rise in the dollar and falls across equity and commodity markets.
"Everybody expected the Chinese would come back ready to buy serious quantities after the Golden Week holidays but it just never happened and now we're seeing traders under pressure to get rid of very prompt cargoes which China doesn't want right now," one European trader involved in sales to Asia said.
Iron-Ore Collapse Seen Ending Most Profitable Shipping in a Year: Freight (Bloomberg)
Steelmaker demand for iron ore, the biggest source of cargoes for commodity carriers, is weakening, threatening to end the most profitable shipping rates in almost a year. Ore stockpiles at ports in China, the largest user, already expanded to within 3.6 percent of a record, according to Antaike Information Development, a Beijing-based researcher. Chinese steelmaking is near the least profitable in almost three years, data compiled by Bloomberg Industries show. Iron-ore swaps, traded by brokers and used to bet on future costs, show no price rebound until at least 2013, according to Clarkson Securities Ltd., a unit of the world’s biggest shipbroker. ArcelorMittal, the world’s biggest steelmaker, and Angang Steel Co. are among producers that idled furnaces as slowing global growth drove benchmark prices for the metal down 15 percent since March. For capesizes, vessels hauling about 80 percent of seaborne iron ore, that means a 40 percent drop in rates in the next quarter, according to Pareto Securities AS.
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