Morning Update

marketsforu

ASIA
Asian equity markets tracked Friday’s positive close on Wall Street after NFP missed expectations and pushed back forecasts of a Fed rate lift-off. Hang Seng (+1.7%) was led by gains in casino names as last week’s reports that China would support Macau continued to bolster stocks, while Macau China visitor arrivals for early October rose by 21.6% Y/Y. ASX 200 (+1.8%) outperformed amid strength in commodity names, while Nikkei 225 (+1.5%) was bolstered by broad sector-based gains with the Asia-Pac region further underpinned by reports that the TPP deal is close to completion. Markets in mainland China remained closed due to Golden Week holiday. 

The Trans-Pacific Partnership Trade deal between 12 countries around the pacific including US, which would open up trade barriers, is said to be a step closer after officials agreed to compromise on time frame for pharmaceutical companies’ monopolies on new drugs. (Guardian)

China is seen to likely conduct fresh reforms and move ahead with stalled pro-market measures this quarter to support the economy and the nation's stock market, according to analysts. (SCMP)

World Bank lowered China 2015 GDP forecast to 6.9% from 7.1%. (BBG)

EUROPE/UK

S&P raised Spain to BBB+ from BBB; outlook stable. (BBG) Of note, this is equal to Fitch’s rating on the country and one notch above Moody’s rating.

Portugal’s ruling coalition party has finished ahead at the parliamentary elections over the weekend, although it failed to secure a majority and will seek an accord with other parties and establish a minority government. (WSJ)

Euro ministers are said have demanded the plans for Greece’s reforms and are to hold talks regarding the delay in reforms. (Handelsblatt)  
 
FX

USD-index retreated from the 96.00 level with the USD underperforming against most of its major counterparts, which saw GBP/USD break above 1.5200, while Antipodeans rose with AUD outperforming ahead of tomorrow’s RBA rate decision with a break in EUR/AUD below 1.5900 underpinning AUD further. The positive risk sentiment saw unwinding of safe haven bids which supported USD/JPY back above 120.00.

COMMODITIES

WTI crude futures rose overnight as the greenback recoiled, while gold (-0.09%) traded relatively flat to hold onto the majority of Friday’s gains where it saw its biggest intraday climb since January after the miss on US non-farm payrolls pushed back expectations of the timing for the Fed rate lift-off. 

Saudi Arabia announced that they have made large oil price cuts amid a price war breaking out between rival OPEC members, while the nation has also stated that they will keep pumping oil at high levels. (Capital. gr)

US 

Fed's Bullard (Non-Voter, Soft Hawk) reiterates that the Fed's targets are nearly complete regarding lift-off and that they should begin to normalize rates soon. (BBG)

Fed’s Dudley (Voter, Dove) signalled concern regarding macro-stability tools due to uncertainty in financial excesses and also commented that US regulators are far from successfully using macro-prudential tools. (RTRS)

Fed Rosengren (Non-Voter, Dove) said he expects a Fed rate hike in 2015 despite the miss on September's Nonfarm Payrolls and added that the Fed were right to delay a hike at the last meeting. Rosengren also said that 2% growth was required for rates to be hiked this year. (BBG)