China data disappoints while European manufacturing impresses, and expectations for a December rate hike are a coin flip. Here are some of the things people in markets are talking about this morning.
It’s a big week for China data
China’s official purchasing managers index was unchanged at 49.8 in October according to the National Bureau of Statistics on Sunday. The Shanghai Composite Index closed 1.7 percent lower following the release. Stocks were also put under pressure after authorities detained a top-performing hedge-fund manager in widening probes into market manipulation and insider trading. More China data is expected later this week, including foreign reserves and trade data. The International Monetary Fund may also announce a decision on whether to include the Chinese yuan in its basket of reserve currencies.
Manufacturing growth in the United Kingdom unexpectedly rose to 55.5 in October, the highest level since June 2014, as new orders surged, according to a report published by Markit Economics this morning. A Purchasing Managers Index for the euro-area also rose, coming in at 52.3, ahead of the median expectation for 52.0 in survey of economists. Markit U.S. manufacturing PMI is due at 9:45 a.m. ET this morning, and will be followed 15 minutes later by the ISM Manufacturing report.
Market sees December rate hike as coin flip
Futures contracts now show a 50 percent chance that the Federal Reserve will raise interest rates for the first time since 2006 at its December meeting. With that meeting six weeks away, the markets will continue to focus mostly on incoming economic data, rather than speeches from central-bank officials to manage their expectations. The first of two payrolls numbers ahead of that meeting is due on Friday on this week.
Visa Inc. has agreed to acquire Visa Europe Ltd. which had split from the firm ahead of the U.S. arm’s initial public offering in 2007 in a deal valued at as much as 21.2 billion euros ($23.4 billion). Seperately, Europe’s largest lender HSBC Holdings Plc, reported pretax profits of $6.1 billion as the bank benefitted from a $1.4 billion decline in fines and settlements. Shares in the bank were 0.9 percent lower at 11:05 a.m. in London.
AKP victory in Turkey
The Turkish lira surged 4 percent against the dollar, while equities rallied the most in 2 years following the AKP’s victory in yesterday’s election. The clear victory for the party founded by President Recep Tayyip Erdogan should end the months of uncertainty that followed June’s inconclusive election.
What we’ve been reading
This is what’s caught our eye over the last weekend.
- China tells eager parents to hold off on the baby-making, for now.
- The FBI finds itself in the middle of a $50 billion fee war between banks and retailers.
- India’s railways are Prime Minister Modi’s biggest challenge.
- Oil guru who called 2014 rout sees OPEC holding production steady.
- Saudi Arabia creates a special spending-cuts office.
- Greek banks face $15.9 billion capital bill.
- Five wild stats from October ETF flows.