In US economic data, consumer inflation expectations rose from 5.4% to 5.9% in October (survey: 5.3%) according to a survey by the Federal Reserve Bank of New York.
European sharemarkets were firmer on Monday on the back of encouraging profit reports from chipmaker Infineon and events organiser Informa Plc. Also European production rose by 0.9% in September – more than expected. Key economic data is expected this week including UK employment, inflation and retail sales data as well as the Eurozone flash third-quarter GDP estimate and October inflation data. Technology drove the gains on European markets on Monday, up by 1.2%. The continent-wide FTSEurofirst 300 index rose by 2 points or just 0.1%. The UK FTSE 100 rose by 0.9%.
US sharemarkets fell on Monday. US Federal Reserve Vice Chair Lael Brainard said that it would be “appropriate soon” for the US central bank to reduce the pace of its aggressive monetary policy tightening. Investors were also encouraged by a meeting between the US and Chinese leaders at the G20 summit. Shares in Amazon fell by 2.3% after the New York Times reported that the tech giant was planning to lay off about 10,000 people in corporate and technology jobs starting as soon as this week. At the close, the Dow Jones index was lower by 211 points or 0.6% after earlier being up 216 points earlier in the session. The S&P 500 index fell by 0.9%. The Nasdaq index was down by 127 points or 1.1%.
US government bonds fell on Monday (yields higher). While US Fed Vice Chair Brainard spoke about a possible scale back of rate hikes, Fed governor Christopher Waller said that the ‘end point’ for interest rates was still “a ways off”. US 10-year yields rose by 4 points to near 3.87%. And US 2-year yields rose by around 8 points to near 4.41%.
Major currencies were generally firmer against the US dollar in European and US trade. The Euro rose from lows near US$1.0270 to highs near US$1.0355 and was near US$1.0330 at US close. The Aussie dollar lifted from lows near US66.65 cents to highs near US67.20 cents and was near US67 cents at US close. But the Japanese yen rose from near 139.10 yen per US dollar to JPY140.75 and was near JPY139.80 at the US close.
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Global oil prices fell on Monday by around 3.5%. Investors fretted that a rise in coronavirus cases in China would delay the re-opening of the economy. Also OPEC cut its forecast for global oil demand growth this year and next, citing economic headwinds. The Brent crude oil price fell by US$2.85 or 3.0% to US$93.14 a barrel. And the US Nymex crude oil price lost US$3.09 or 3.5% to US$85.87 a barrel.
Base metal prices were generally firmer on Monday. Copper prices hit near five-month highs on optimism about demand in top consumer China after officials moved to shore up the country’s property sector and ease its strict COVID restrictions.
The gold futures price rose by US$7.50 an ounce or 0.4% to US$1,776.90 an ounce. Spot gold was trading near US$1,772 an ounce at the US close. Iron ore futures rose by US$1.30 or 1.4% to US$92.09 a tonne.
Originally published by CommSec