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 and give pharmaceuticals a five-year protection period and allow flexibility on longer drug monopolies, (Guardian)
China's crude steel output fell 3.5% Y/Y to 66.94mln tonnes during August vs. Prev. 1% rise a year ago, according to the NDRC. The state planner also announced that activity in the building materials sector also fell with cement production down 4.2% Y/Y and flat glass down 12.1% Y/Y. (China Economic Net)
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)
Taiwan finance minister Chang Sheng-ford sees a Y/Y decline in the country's exports during September, citing the prolonged Mid-Autumn Festival holiday and effects of Typhoon Dujuan. (Want China Times)
S&P raises 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 is seen to be re-elected and win the most seats in the parliamentary election over the weekend, according to exit polls. (BBC) However, there were separate reports that the ruling coalition may fail to obtain a majority. (WSJ)
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)
China's Yuanba gas field in Sichuan Province which is the country's deepest gas field with deposits as deep as 6,700 meters and a total explored reserves of 219.4bln cubic meters will be operational by year end and will produce 3.4bln cubic meters of natural gas annually. (China Economic Net)
Fed's Bullard (Non-Voter, Soft Hawk) reiterated 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)
US Change in Nonfarm Payrolls (Sep) M/M 142K vs. Exp. 201K (Prev. 173K, Rev. 136K)
- Unemployment Rate (Sep) M/M 5.1% vs. Exp. 5.1% (Prev. 5.1%)
- Average Hourly Earnings (Sep) M/M 0.0% vs. Exp. 0.2% (Prev. 0.3%, Rev. 0.4%)
US equities were initially weighed by the large miss on the NFP headline figure coupled with unfavourable revisions. Subsequently casting doubts over the strength of the US economy with FFR futures now only pricing in an 8% chance of a rate hike in October. However, US equities did grind higher to pare the entirety of the losses underpinned by the energy complex amid the gains seen in crude prices which had been bolstered by the US Baker Hughes rig count falling to the lowest level since May’02. The DJIA finished up 1.23% at 16472.51, S&P 500 finished up 1.43% at 1951.30 and the NASDAQ-100 finished up 1.78% at 4267.44.
UST’s were supported in the wake of the lower than expected NFP release combined with the negative revision to the August NFP reading. However, this move was pared in sympathy with the reversal seen in US equities throughout the remainder of the North America session and at the pit close T-notes finished at 129.11, up 19 ticks.