China Manufacturing PMI at 2-Year High

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From Trading Economics: The Caixin Manufacturing PMI in China rose to 51.2 in October of 2016 from 50.1 in September and beating market estimates of 50.2. It was the 4th straight month of expansion and the highest reading since July 2014, as output rose the most since March 2011 while new orders rebounded. However, new export orders fell slightly while companies cut their staff numbers at the slowest pace in 17 months. Backlogs of work continued to accumulate and inflationary pressures picked up sharply, with input cost inflation accelerating to its fastest since September 2011 and output charges rising the most since February 2011. Manufacturing PMI in China averaged 49.42 from 2011 until 2016, reaching an all time high of 52.30 in January of 2013 and a record low of 47.20 in September of 2015.

Market Snap

Market Opening Wrap

In Asian Equity Markets Japan's Nikkei edged up in choppy trade on Tuesday after the Bank of Japan held policy steady, as expected, while disappointing earnings forecasts from some bellwether companies capped gains. The benchmark Nikkei index rose 0.1 percent to 17,442.40, after trading in negative territory. MSCI's broadest index of Asia-Pacific stocks outside Japan rose 0.3 percent. Activity in China's manufacturing sector expanded at a faster pace than expected in October, an official survey showed on Tuesday, adding to views the world's second-largest economy is stabilizing thanks to a construction boom. Hong Kong stocks rose 0.7 percent while Shanghai stocks also crept in the black.

In Currency Markets the dollar edged higher on Tuesday as the final days of the contentious U.S. presidential campaign overshadowed other major market events, as investors weighed the latest concerns about an FBI investigation into Hillary Clinton's use of a private email server. The Aussie was buying $0.7647, up 0.5 percent, after rising as high as $0.7652 after the central bank kept its cash rate steady at 1.5 percent as the money market priced in only a minor possibility of a move at the next meeting in December. The euro was down 0.2 percent at 1.0960, while the sterling fell 0.1 percent to $1.2230. The dollar bought 104.85 yen, up slightly on the day but still shy of Friday's three-month high of 105.54.

In Commodities Markets  oil prices edged higher from one-month lows in early trading in Asia on Tuesday after OPEC agreed on a long-term strategy that was seen as an indication the cartel was reaching a consensus on managing production.  U.S. West Texas Intermediate futures were up 10 cents at $46.96 a barrel. They fell nearly 4 percent to $46.86 a barrel in the previous session. Brent for January delivery, the new front-month contract, was up 29 cents at $48.90 a barrel. Spot gold fell 0.02 percent to $1,277.01 per ounce, while silver was down 0.06 percent at $17.86 per ounce. Platinum rose 0.25 percent to $978.99 per ounce and palladium was up 0.79 percent, to $623.40.

In US Equity Markets stocks  ended barely changed on Monday as investors digested the latest large-scale corporate mergers as well as the most recent twist in a tumultuous U.S. presidential election. The Dow Jones industrial average fell 0.1 percent, to 18,142.42, the S&P 500 lost 0.01 percent, to 2,126.15 and the Nasdaq Composite fell 0.02 percent, to 5,189.14. Closing out a big month for mergers, Dow component General Electric fell 0.4 percent after the industrial conglomerate said it would merge its oil and gas business with oilfield services provider Baker Hughes. Baker Hughes fell 6.3 percent. Level 3 Communications rose 3.9 percent after CenturyLink said it would buy the company in a deal valued at about $24 billion. CenturyLink fell 12.5 percent.

In Bond Markets  Japanese government bond prices were mostly steady on Tuesday, hemmed in narrow range after the Bank of Japan kept monetary policy unchanged as widely expected and left the market short on immediate catalysts. The two-year JGB yield and the benchmark 10-year yield both stood unchanged at minus 0.245 percent and minus 0.055 percent, respectively. The 30-year yield inched down half a basis point to 0.500 percent.

Source: Institute of Trading and Portfolio Management