In a market wrap, analysts at ANZ Bank New Zealand Limited explained that equities remained under selling pressure overnight.
DATA/EVENT PULSE
PMIS mixed:
“Weakness in European PMIs was led by softness in manufacturing new orders (49.8) and new export orders (48.9). Uncertainty over Italy, Brexit, recent stock market weakness and trade are weighing on business confidence and making new orders growth more hesitant. In contrast, the Markit October preliminary US PMI beat expectations, with new orders and employment up, but output down.”
US housing on the skids?
“US September new home sales fell 5.5% m/m, following a downwardly revised 3.0% drop in August (a lift of 3.5% was originally reported). They are at their lowest level in nearly two years. The data will fan concerns that interest rate-sensitive sectors of the economy are beginning to suffer under the rise in mortgage rates.”
Bank of Canada hikes:
“As expected, the BoC raised rates 25bps to 1.75% and signalled rates may have to rise to neutral. “Bank staff estimate that the Canadian neutral nominal policy rate lies between 2.5 and 3.5 per cent, the same range reported in the April 2017 Monetary Policy Report.” That implies more than the two additional hikes currently priced in for next year.”
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