Global equity and commodity markets rebound after yesterday's selloff

Friday, October 03, 2014

China’s non-manufacturing PMI fell to 54.0 in September compared to 54.4 in August, growing at its slowest pace in 8 months after new orders shrank for the first time since 2008. Japan’s Markit services PMI jumped above 50.0 to reach 54.5 in September compared to 49.9 in August. The Nikkei index extended gains above 15,700, rising 0.3%, while the Hang Seng index recovered above 23,000 after gaining 0.4%.

Hang Seng Index

HSI Index (Hong Kong Hang Seng I 2014-10-03 09-01-23

In the US, the Dow Jones index fluctuated strongly and finished fairly flat yesterday at 16,801.05 after previously having hit a low at 16,674.04. European equity markets rebounded strongly in early trade this morning, following a heavy sell-off yesterday.

It has been a very volatile and nervous trading session for the oil market yesterday. It seems that the market overreacted to the recent disappointing PMI manufacturing data and the ample supplies in the US, Russia and Europe. The WTI front month futures plunged sharply more than $3 and reached a low at $88.18, but recovered in late trade to finish the session at $91.01. Brent futures retreated sharply to retest $91.50 per barrel but finished the session at $93.42 per barrel.  

WTI front month futures

CLX4 Comdty (WTI CRUDE FUTURE  N 2014-10-03 09-02-17 

Brent front month futures

COX4 Comdty (BRENT CRUDE FUTR  N 2014-10-03 09-02-00

The US dollar rebounded against the yen from sharp declines overnight, supported by comments from the Bank of Japan chief that a weak yen was on the whole positive for the economy. The USD index holds around a 4-year high after trading near 85.8 against a basket of currencies. The euro slid slightly lower this morning around 1.265 against the US dollar after hitting a high at 1.27 yesterday.

USD Index

DXY Curncy (DOLLAR INDEX SPOT)   2014-10-03 09-02-35

The main focus will turn to the release of the US non-farm payrolls data for a confirmation of the US employment conditions. Investors will be watching for the Markit services PMI from the Eurozone, UK and US as well as Eurozone’s retail sales for further signs of the current economic conditions.

 

Events for today:

 

3

CN Market Holiday

0200

CN

Sep

Non-Manufacturing PMI

0855

DE

Sep

Markit Services PMI

0900

EZ

Sep

Markit Services PMI

0930

UK

Sep

Markit/CIPS Services

1000

EZ

Aug

Retail Sales

1330

US

Aug

Trade Balance

1330

US

Sep

NF Payrolls & Unemployment

1445

US

Sep

Markit Services PMI

1500

US

Sep

ISM Non-Manufacturing

 

All times UK Local Time

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