In US economic data, the Chicago Federal Reserve national activity index fell from +0.17 to -0.05 in October (survey: flat).

European sharemarkets edged lower on Monday. Gains in defensive food and beverage (+1.2%) and healthcare companies (+1.0%) were offset by declines in energy (-2.8%) and basic resources (-1.6%) stocks on worries about the impact of surging Covid-19 cases in China. German producer prices posted their first monthly fall in 2½ years in October, down 4.2%, well below market expectations for a 0.6% lift. The continent-wide FTSEurofirst 300 index dipped by 0.1%. And the UK FTSE 100 also fell by 0.1% with losses limited by a weaker British pound.

US sharemarkets fell on Monday as investors worried that China may again ramp up Covid restrictions after reporting several deaths over the weekend. Shares of casino operator Las Vegas Sands dipped 2.9%. The S&P 500 energy sector index slid 1.4% as crude oil prices tumbled on reports that Saudi Arabia and other OPEC oil producers
were discussing an output increase. Tesla shares dipped 6.8% following a US vehicle recall. But Walt Disney shares jumped 6.3% after announcing the return of Bob Iger as chief executive officer. At the close of trade, the Dow Jones index was 45 points or 0.1% lower. The S&P 500 index dropped 0.4% and the Nasdaq index shed 122 points or 1.1%.

US government bonds weakened on Monday (yields higher). San Francisco Federal Reserve President Mary Daly warned that too much policy tightening could be “unnecessarily painful” for the US economy. And Federal Reserve Bank of Cleveland President Loretta Mester said, “I think we can slow down from the 75 [basis point rate hikes] at the next meeting.” US 10-year Treasury yields rose by around 1 point to near 3.83%. And US 2-year Treasury yields lifted by around 4 points to near 4.55%.

Major currencies were weaker against the US dollar in European and US trade. The Euro eased from highs near US$1.0284 to lows near US$1.0223 and was near US$1.0240 at the US close. The Aussie dollar fell from highs near US66.51 cents to lows near US65.85 cents and was near US66.00 cents at the US close. And the Japanese yen
dipped from near 140.43 yen per US dollar to near JPY142.20 and was around JPY142.10 at the US close.

 

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Global oil prices fell by up to 0.4% on Monday, swinging in a US$5 range, following conflicting reports about whether Saudi Arabia and other OPEC oil producers are considering a 500,000 barrels per day output increase. The Brent crude oil price fell by US17 cents or 0.2% to US$87.45 a barrel. And the US Nymex crude oil price shed US35
cents or 0.4% to US$79.73 a barrel.

Base metal prices tumbled on Monday. Copper prices slid 1.6% to their lowest in more than two weeks, pressured by fresh Covid-19 curbs in top consumer China, a stronger US dollar and rising inventories in London Metal Exchange registered warehouses. The gold futures price fell by US$14.80 an ounce or 0.8% to US$1,739.60 an ounce. Spot gold was trading near US$1,739 an ounce at the US close. Iron ore futures fell by US$1.35 or 1.5% to US$91.54 a tonne as fresh Covid-19 flare-ups in the world’s top steelmaker China dented the demand outlook.

Originally published by CommSec