A generic image of multiple stacks of coins next to a pen
Markets

Crude Remains Firm ahead of US Session

Market sentiment dramatically recovered as strong US data reviving hopes about economic recovery was followed Chinese PMI showing resilience in the country's manufacturing sector. Signs of growth in the world's biggest oil consumers sent oil prices higher. The front-month WTI crude oil contract rallied for a third consecutive day to as high as 81.08. Gold remained firm and price climbed to a new record of 1319.3 on USD's weakness.

In the PGM group, platinum jumped to 1684.5, a level not seen since May 18, while palladium hovered around a 2.5-year high around 565/580. Auto sales in the US may prove to have grown in the fastest pace since March. The market anticipates total light vehicle sales rose +27% to 11.7M units in September.

As the market awaits the US ISM index, several data were released in Asia and Europe. In Japan, CPI ex-fresh food contracted -1% y/y in August, easing from -1.1% a month ago. The leading Tokyo CPI ex-fresh food declined -1% y/y in September from -1.1% a month ago. The readings indicate persistent deflation in Japan, albeit at a moderated pace. Employment situation also improved slightly with the jobless rate slipping to 5.1% in August from 5.2% in July. Housing spending grew +1.7% y/y in August, beating market expectations of +1.4% and July's +1.1%.

While the bunch of data did not signal the impact of a strong yen on the economy, manufacturing PMI and industrial production data released yesterday painted a totally different picture. PMI fell -0.6 point to 49.5 in September, indicating contraction in the manufacturing sector. IP dropped -0.3% m/m in August following a -0.2% dip in July. The market had anticipated an expansion of +1.2%. The Japanese government's currency intervention last month had only temporary effect and USDJPY has dropped to a 15-month again in recent days. Prime Minister Naoto Kan today reiterated that the government will 'continue to take decisive measures as needed'. Yet, such verbiage failed to trigger selloff in the yen.

Manufacturing PMI for Eurozone fell to 53.7 in September from 55.1 a month ago. The reading for Germany alone fell to 55.3 from 58.2. Unemployment rate for the 16-nation region stayed at 10.1% in August.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Commodities