Macro Roundup (Nov 3)

SHANGHAI, Nov 3 (SMM) — This is a roundup of global macroeconomic news last night and what is expected today.

The dollar hit one-month highs against a basket of peers on Monday and expected volatility in major currencies rose to the highest levels since April on investor jitters over the outcome of Tuesday's U.S. presidential election.

The dollar has strengthened in the past week as risk sentiment has soured, with investors reducing positions due to uncertainty over the result.

“The move we saw last week was a pretty broad derisking and I think that makes a lot of sense; people are naturally skeptical about any sort of prognostication with regards to the election after what happened four years ago,” said Erik Nelson, a macro strategist at Wells Fargo in New York.

On Wall Street, US stock futures rose slightly in overnight trading as investors awaited Tuesday's Presidential election between incumbent Donald Trump and former Vice President Joe Biden.

Dow futures rose 84 points. S&P 500 and Nasdaq 100 futures gained 0.2% and 0.22%, respectively.

Stocks rebounded on Monday from a sell-off to end October that was driven by a rise in Covid-19 cases, a breakdown in economic stimulus talks, and uncertainty about the election.

On Monday, the Dow Jones Industrial Average climbed 423 points, or 1.6%. The S&P 500 also registered a gain of 1.23%. The Nasdaq Composite was the relative underperformer, adding just 0.4% as Facebook, Amazon, Apple and Microsoft all closed lower.

“Today's strong stock market gain was fueled by technical support — a stock market which bounced decisively from its recent lows, a nod to ongoing economic momentum, despite a recent spike in Covid cases,” Jim Paulsen, chief investment strategist at the Leuthold Group, told CNBC. “As the election finally nears, investors who were selling on the rumor may now be buying on the news, and finally, after almost a 10% decline in the last month, buying on the dip is back.”

Oil prices gained more than 2% Monday, shaking off earlier losses, as the United States heads into a contentious U.S. presidential election.

The oil market has been under pressure in recent days, hit by concerns about weaker fuel demand as several European countries went into lockdown to curb the coronavirus. New infections spiked in the United States as well.

Brent crude rose $1.14, or 3%, to trade at $39.08 per barrel. West Texas Intermediate settled $1.02, or 2.8%, higher at $36.81 per barrel.

Gold prices gained on Monday on uncertainty surrounding the outcome of Tuesday’s U.S. presidential election, while a spike in global coronavirus cases exacerbated fears about an economic recovery, further boosting the safe-haven metal's appeal.

Spot gold rose 0.8% to $1,893.13 per ounce, while U.S. gold futures settled up 0.7% at $1,892.50.

“We are expecting an increase in volatility coming in the next 72 hours. So, because of that people are looking at gold and silver as safe haven play,” said Phillip Streible, chief market strategist at Blue Line Futures in Chicago.

Democrat Joe Biden is leading U.S. President Donald Trump in national opinion polls, but the race is tight in several battleground states, with fears that the results may not be clear on Tuesday night as ballot counting could take days.

In overnight trading in Asia-Pacific, stocks mostly rose as a private survey showed China’s manufacturing activity grew for the sixth straight month in October. The Caixin/Markit Purchasing Managers’ Index (PMI) for Chinese manufacturing came in at 53.6 for October, higher than the 53.0 reading forecast by analysts in a  poll.

October's final manufacturing PMI data for the euro zone came in at 54.8, up from 53.7 in September and outstripping expectations. The upside surprise was driven in part by resurgent factory activity in Germany.

US Factory Orders for September will be released today.