China’s imports point to weakness in domestic demand
US stocks climbed to fresh all-time highs on Friday as investors cheered upbeat economic data. The official report showed that non-farm payrolls increased by a better-than-expected 531,000 in October, and the unemployment rate fell to 4.6%. Furthermore, Biden said that the country’s economy is recovering from the pandemic faster and stronger than expected. Also on the positive side, Pfizer said that its experimental antiviral pill for COVID-19 cut rates of death by nearly 90% in high-risk adults. Against this backdrop, the Dow Jones and the S&P 500 gained 0.6% and 0.4%, respectively, while the Nasdaq Composite edged up 0.2% ahead of the weekend.
On Monday, Asian stocks were mixed-to-lower as the data released on Sunday showed that China’s imports missed expectations in October, pointing to weakness in domestic demand. Meanwhile, export growth slowed in October but beat forecasts while the trade balance came in at $84.54 billion. On Wednesday, China’s consumer and producer price indexes could set further direction to the regional stocks. As such, Shanghai Composite edged up 0.20%, Hong Kong’s Hang Seng shed 0.43%, and Japan’s Nikkei 225 lost 0.35%. In Australia, the S&P/ASX 200 finished just below the flat line.
In Europe, equities opened little changed at the start of the new trading week, with the pan-European Stoxx 600 flirting with the flat-line in early trade. In part, investors are getting more cautious ahead to fresh inflation readings in the U.S. In the UK, investors will be watching the first readings of third-quarter GDP data. Meanwhile, US stock futures pointed to a lower open on Wall Street.
In currencies, the USD index sticks to modest gains on Monday amid rebounding US bond yields. The safe-haven greenback is also underpinned by the dominating risk-off tone in the global financial markets. EURUSD plunged to fresh mid-2020 lows just above the 1.1500 figure on Friday to bounce to the 1.1570 area today. It looks like the common currency would stay on the defensive in the coming days and may see fresh long-term lows if the US inflation figures exceed expectations.