Top U.S., Chinese diplomats discuss relations, war with Russia (State Dept.)
US Secretary of State Antony Blinken met with Chinese Foreign Minister Wang Yi and discussed the ‘need to keep lines of communication open’, according to a State Department Reading.
Blinken said he also discussed the “responsible” handling of U.S.-China competition, without giving further details.
The State Department said Blinken raised the issue of Russia’s war on Ukraine and the “threats it poses to global security and economic stability,” according to the statement.
— Jihye Lee
US dollar has more room to strengthen on spreads: Wells Fargo
The American dollars is expected to strengthen further due to rate differentials as central banks around the world adopt a “less hawkish” tone, according to Wells Fargo.
“We’re starting to see some of the foreign central banks … turn a bit to the less hawkish side,” while the Federal Reserve maintains its hawkish stance, FX strategist Brendan McKenna told CNBC. “Squawk Box Asia.”
McKenna said he expects dollar strength to continue in the first quarter of next year “at a minimum.”
— Jihye Lee
Australian retail sales rise 0.6% in September
Retail sales in Australia rose 0.6% in September from August, official data showedin line with the expectations of a Reuters poll and at the same rate recorded during the previous month.
Sales of clothing, footwear and personal accessories rose 2%, while cafes, restaurants and takeaways increased 1.3%.
The country’s retail volumes are released on Friday and ANZ Research expects quarterly growth of 0.4%.
“This would represent the slowest growth since Covid but still solid for household spending given the shift from retail to services,” ANZ Research said in a tweet.
Goldman Sachs expects Fed rates to peak at 5%
Goldman Sachs economists expect the Federal Reserve Funds Rate to peak at 5%, after raising its central bank rate hike forecast by 75 basis points at the next meeting this week.
Economists led by Jan Hatzius said in a Saturday note they were adding another 25 basis points to their forecast – now calling for a 50 basis point hike in December, a 25 basis point hike in February and a another 25 basis point increase in March.
“Inflation is expected to remain uncomfortably elevated for some time, which could make continued upside in small increments the path of least resistance,” the note said.
— Jihye Lee
Macau gaming stocks plummet after casino foreclosure over dealer Covid case
Hong Kong-listed Macau gambling shares fell sharply in early trading after a worker at MGM ChinaThe Cotai casino has tested positive for Covid, according to government advice.
Several areas linked to the case have been placed on lockdown, according to another notice, with the measures due to be lifted between November 3 and 5.
MGM China shares fell 2.89%, Wynn Macau slipped 2.62%, Galaxy Entertainment shares fell 1.85%. Sands China stocks also lost 2.29%. SJM Holdings also fell more than 3%.
Factory activity in China fell in October, missing expectations
Chinese factory activity declined in October from September, according to data from the National Bureau of Statistics.
The official print for the manufacturing purchasing managers’ index came in at 49.2, missing expectations for a reading of 50 – the mark that separates monthly growth from contraction.
In September, the PMI index stood at 50.1.
China’s official non-manufacturing PMI came in at 48.7, down from 50.6 in September.
Japanese industrial production falls for the first time in four months
Japan’s industrial production fell 1.6% in September from August, government data show — falling more than expected from a 1% decline in a Reuters poll and ending a three-month growth streak.
The decline was led by motor vehicles, chemicals and production machinery, the statement said.
A government survey forecasting industrial production figures predicts a decline in October, while seeing an increase in November.
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Currency check: Japanese yen weakens beyond 148 levels
from Japan yen weakened beyond 148 levels against the US dollar in morning trade in Asia for the first time since last Wednesday.
The moves come ahead of the Fed’s policy meeting this week, where the central bank is expected to raise rates by 75 basis points, further widening the rate differential between the United States and Japan.
The Japanese yen saw some strengthening to 146 last week ahead of the Bank of Japan’s monetary decision to hold rates steady, before falling back towards 148 against the greenback.
It last stood at 148.23 to the dollar.
Chinese factory activity for October expected to be unchanged from September
China’s official purchasing managers’ index for October is expected to be roughly flat from September, according to a Reuters poll.
The reading should come in at 50, the point that separates growth from contraction. PMI prints compare month-to-month activity.
In September, the economy hit a PMI of 50.1.
Traders looking for a sign of slowing from the Fed
Wall Street will be closely watching the Federal Reserve’s statement this week for signs that the central bank will slow its pace of rate hikes.
According to FedWatch CME Tooltraders estimate there is an 80% chance the Fed will raise rates by three-quarters of a point on Wednesday.
This would bring the central bank’s target range to 3.75% to 4%.
Beyond that, however, the market looks more uncertain. There is only a 44% chance of another rise of this size in December.