Daily Observations:

A global equities sell-off deepened in Asian trading amid mounting anxiety ahead of next week’s American presidential election. The yen, Swiss franc and gold gained as investors ramped up demand for safe haven assets. Crude oil declined for a fourth day as data showed American stockpiles grew.


  • The Markit US manufacturing PMI in October rose to the highest level this year of 53.4, from 53. 2 in September and exceeding economists’ median estimate of 53.2. Inflationary pressures were evident as both input and output prices rose at solid rates; the rate of inflation was also the greatest recorded by the survey in the past 2 years.
  • ISM manufacturing last month gained to 51.9, from 51.5 prior, and beating the consensus projection of 51.7.
  • Construction spending unexpectedly slid 0.4% in September, missing the 0.5% gain expected.
  • According to an ABC/Washington Post tracking poll, Trump has pulled ahead of Clinton for the first time since May, leading 46% to 45%. Senior pollsters interviewed by Bloomberg recommend waiting another day before buying into the Trump momentum, with more surveys due by later tonight in the US.
  • The latest poll fuelled risk-off sentiment among investors, as the S&P 500 Index fell 0.7%, sliding for the sixth day to end close to a 4-month low. Investors are also awaiting tonight’s Fed rate decision although, no change is largely expected.
  • The US dollar weakened broadly, as the Bloomberg Dollar Spot Index which tracks the greenback against 10 major peers fell 0.3%. Overnight risk-off sentiment fuelled gains in the Swiss franc as well as the Japanese yen, seen largely as safe haven assets.
  • US Treasuries reversed an early sell-off driven by yesterday’s strong Chinese PMI data, with the benchmark 10yr yield ending little changed in New York at 1.83%.


  • The Canadian government is creating an infrastructure bank backed by billions in new spending to lure investment from global fund giants such as BlackRock Inc. in a bid to breathe new life into Canada’s stagnant economy.
  • In a fiscal update yesterday, Prime Minister Trudeau unveiled a C$81.2 billion in new infrastructure spending over the coming 12 years, including C$8.9 billion before the next scheduled election in 2019.
  • GDP in August gained 0.2% month-on-month and 1.3% year-on-year, matching estimates; prior readings were revised lower to 0.4% and 1.2% respectively.


  • The Markit UK PMI manufacturing PMI fell from 55.5 to 54.3 in October, lower than the 54.5 predicted.

Precious Metals:

  • Spot gold gained following overnight weakness in the US dollar, rising 0.6% to almost a month-high of $1,291.98/Oz. The key resistance level lies at $1,305/Oz.
  • Spot silver rose 2.0% to test its key resistance level of $18.50/Oz, before paring back some of its gains earlier this morning.


  • Crude oil for December delivery ended 0.4% lower in New York and slid 0.9% further earlier today to $46.26/bbl, as speculation that US crude stockpiles increased last week outweighed the impact of a fuel pipeline blast in Alabama.



  • Spot 1.3909
  • USDSGD was 0.2% higher at 1.3912 earlier today, reversing an overnight decline below the 1.3900 handle which was fuelled by broad USD weakness.
  • According to ABN Amro, Trump’s lead in the latest poll is negative for Asian currencies due to worries about potential trade barriers if he becomes the next US president.
  • On a longer-term basis, the currency pair could find decent support at the 1.3850 level and some resistance at the 1.4000 psychological handle. A 1.4200 target remains a realistic possibility over the next 12 months.



  • Spot 0.7621
  • AUDUSD reversed prior day’s gains, falling 0.8% back towards the 0.7600 handle.
  • AUDUSD has made a series of lower highs over the past 2 weeks; the recent low of 0.7558 is worth monitoring closely.



  • Spot 1.3400
  • USDCAD continues to trade around the 1.3400 handle; despite overnight dollar weakness, the currency pair reversed earlier declines and was 0.1% higher at 1.3400 today.
  • In a note to clients the day before, UBS wrote that the 17% chance of a BOC rate cut in January is too low, and forecasts further weakness for the CAD which could be exacerbated by cheaper crude oil prices. The bank revised its year-end forecast for USDCAD to 1.3600 from 1.2500.



  • Spot 6.7737
  • Overnight USD weakness led to yuan gains for a third straight day, as USDCNH declined 0.2% to 6.7701 – the lowest in more than a week.
  • The PBOC strengthened its fixing by 0.25% to 6.7562 to the dollar.



  • Spot 103.82
  • USDJPY declined 1.2% to 103.67, as anxiety over next week’s US presidential election sent investors seeking cover in safe haven assets such as the yen.



  • Spot 1.2238
  • GBPUSD was little changed, maintaining above the 1.2200 level from the previous day.
  • The 1.2100 handle remains a key support level.


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UEN: 201419754M

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