- US stock markets ended flat on the first day of trading after hurricane Sandy.
- Obama and Romney are still neck-and-neck in opinion polls.
- Chinese PMI rose in October - this has lifted Asian stock markets this morning.
- The yen continues to weaken.
The US stock markets ended yesterday’s trading basically flat on the day. Yesterday was the first day of trading this week as the markets have been closed because of hurricane Sandy.
Despite large damage in the wake of Sandy the US markets’ reaction has been muted. The hurricane is not expected to have had a major negative impact on the US economy but it is another uncertainty ahead of Tuesday’s presidential elections. The latest opinion polls show that it will be a very close race between President Obama and Republican presidential candidate Mitt Romney.
Despite the fact that we are still some time away from the end of the year it very much seems like the markets are "on hold" for the remainder of the year. Uncertainty about the outcome of the US elections and particularly the so-called "fiscal cliff" seem to have locked the markets in a wait-and-see mode. See our preview on the US presidential elections here.
The slight increase in financial and economic uncertainty on the back of Sandy has pushed down US bond yields, which remain at historically low levels.
October’s Chinese PMI data rose to 50.2 from 49.8 in September – more or less in line with the consensus expectation. The data point to a beginning recovery in the Chinese economy, which is obviously good news for the global economy. Asian stock markets rose on the back of the positive Chinese data.
This morning the yen has continued to weaken – for the third day in a row. The weaker yen seems very much driven by Bank of Japan’s decision earlier this week to step up quantitative easing.
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