Overnight News Bullets
SW PMI (Oct) out at 59.4 vs. 57.2 expected. Prior at 58.2.
NO Unemployment Rate (Oct) out at 1.7% as expected. Prior at 1.8%.
UK PMI Manufacturing (Oct) out at 52.9 vs. 54.5 expected. Prior at 54.7.
IC Sedlabanki Interest Rate out at 13.75% vs. 13.3% expected. Prior at 13.3%
US Challenger Job Cuts YoY (Oct) out at -8.8% vs. -28.5% prior.
US Personal Income (Sep) out at 0.4% as expected. Prior at 0.4% (revised from 0.3%)
US Personal Spending (Sep) out at 0.3% vs. 0.4% expected. Prior at 0.5% (revised from 0.6%)
US PCE Core MoM/YoY (Sep) out at 0.2%/1.8% as expected. Prior at 0.1%/1.8%.
US PCE Deflator YoY (Sep) out at 2.4% as expected. Prior at 1.8%.
US Initial/Cont. Claims out at 327K/2588K vs. 330K/2534K expected.
US ISM Manufacturing (Oct) out at 50.9 vs. 51.5 expected. Prior at 52.0. ISM Prices Paid at 63 as expected. Prior at 59.0.
US EIA Nat. Gas Storage Change out at 66 vs. 59 expected. Prior at 68.
JN Monetary Base YoY (Oct) out at 0.5% vs. 0.6% expected.
Swiss CPI MoM/YoY (Oct) out at 0.9%/1.3% vs. 0.8%/1.2% expected.
Markets
FX: USD moderately higher. JPY strengthening significantly.
Fixed Income: Very strong day in 10-year contracts. STIR Futures also somewhat higher.
Stocks: Blood in the streets. More to follow on renewed subprime writedowns and worries.
Commodities: Gold and Crude Oil holding up, but silver looking weak.
O/N Data Heat map:
Calendar
Today's Highlights:
| Time (GMT) | Region | Release | Consensus |
| 9:00 | E-Z | PMI Manufacturing (Oct) | 51.5 |
| 9:30 | UK | PMI Construction (Oct) | 59.5 |
| 11:00 | CA | Unemployment Rate (Oct) | 5.90% |
| 11:00 | CA | Net Change in Unemployment (Oct) | 13.5 |
| 12:30 | US | Change in Nonfarm Payrolls (Oct) | 83K |
| 12:30 | US | Change in Manufacturing Payrolls (Oct) | -15K |
| 12:30 | US | Unemployment Rate (Oct) | 4.70% |
| 12:30 | US | Average Hourly Earnings MoM/YoY (Oct) | 0.3%/4.0% |
| 12:30 | US | Average Weekly Hours | 33.8 |
| 14:00 | US | Factory Orders (Sep) | -0.70% |
| 18:00 | IT | Budget Balance (Oct) |
This and Next Week??™s Highlights:
| Date | Region | Release |
| 4-Nov | NZ | Tax Receipts, Labor Cost All Wages, Labor Cost Private Sector |
| 4-Nov | AU | AiG Performance of Service Index, TD Securities Inflation |
| 5-Nov | AU | ANZ Job Advertisments |
| 5-Nov | UK | Official Reserves, Industrial Production, Manufacturing Production, |
| 5-Nov | US | ISM Non-Manufacturing |
| 6-Nov | JN | Leading Economic Index, Coincident Index |
| 6-Nov | E-Z | PPI, Retail Sales |
| 6-Nov | GE | Factory Orders |
| 6-Nov | CA | Building Permits |
| 6-Nov | AU | RBA Cash Target Rate (exp +25bp to 6.75%) |
What's going on?
Citigroup, the largest U.S. bank by assets, tumbled the most since 2002 after CIBC World Group Markets said its dividend may be cut and Credit Suisse lowered its rating. Citigroup may need to sell assets or raise cash to strengthen its capital base.
Asian stocks were broadly lower on Friday??™s trading after Citigroup downgrade stoked fears of continued credit market problems. Losses were led by large financials, such as Mitsubishi Financial.
Worries of continued credit crunch helped yen higher against 16 major currencies and limited carry trade formation. Dollar weakness continued as speculation prevailed that no-farm payrolls to be announced later today would show slower employment growth.
Median expectation for the change in non-farm payrolls is 85K for October and unemployment rate 4.7%. Should the U.S. jobs data disappoint expectations to a high degree, speculation on a possible December rate cut can expected to be reheated.
FX
USDCHF to break strong support
FX Trading Strategies
| Pair | Supp. | Resis. | Comments |
| USDCHF | 1.1554 | 1.1635 | We have a signal to go short at 1.15531, so we placed an order to sell the break of 1.1554 offer, targeting 1.15. Stop bid at 1.1574. The stronger then expected CPI this morning should keep the SNB on the hawkish side, supporting an appreciating Swiss Franc. |