【True Zoom Finance】US unemployment claims data returns to pre-hurricane levels; China asks automakers to pause expansion in Europe

Initial jobless claims in the U.S. fell by 15,000 to 227,000, returning to pre-hurricane levels in the southeastern states and below the median forecast of economists surveyed by Bloomberg.

Overnight Highlights

· The Nasdaq and S&P 500 rose on Thursday as Tesla's positive earnings forecast and a retreat in U.S. Treasury yields from three-month highs boosted market sentiment, despite some companies' weaker earnings. The euro and yen strengthened, while the dollar paused its rally after hitting a near three-month high. The benchmark 10-year U.S. Treasury yield retreated from a three-month peak, having reached levels attractive to buyers, but markets are expected to remain under pressure ahead of next week's October jobs report and the U.S. election. Oil prices fell about 1% in volatile trading amid reports that the U.S. and Israel would attempt to restart Gaza ceasefire talks. Gold rose nearly 1%, nearing record highs, as safe-haven demand from ongoing geopolitical concerns lifted prices.

International News

· G-20 finance ministers and central bank governors expect a favorable global "soft landing" outlook but warn of increasing divergence in economic trajectories.

· The U.S. October PMI preliminary reading rose 0.3 points to 54.3, with strong services sector activity driving steady expansion in U.S. business activity for most of October.

· Initial jobless claims fell by 15,000 to 227,000, returning to pre-hurricane levels in the southeastern states and below the median forecast of economists surveyed by Bloomberg.

· Cleveland Fed President Hammack stated that while progress has resumed in reducing inflation in recent months, officials are not yet ready to declare victory.

· Bank of Japan Governor Ueda indicated the central bank has time to consider its next policy move, suggesting no rate hike next week and little change in policy stance despite the yen hitting a near three-month low this week. See: 【Market Review】How to View the Yen's Depreciation Since Early October?

· ECB Governing Council member Kazaks emphasized the need to ensure interest rates do not restrict the economy excessively, as inflation may sustainably hit the 2% target earlier than expected next year. See: 【Market Review】ECB Cuts Rates as Expected—What’s Next for the Euro?

· U.K. private sector activity growth slowed to an 11-month low as businesses grew anxious ahead of next week’s government budget announcement.

· U.S. money market fund assets hit a record $6.51 trillion as investors flocked to higher-yielding assets amid Fed rate cuts.

Greater China News

· IMF Asia-Pacific Department Chief Srinivasan noted that while recent policies could lift China’s 2024 growth forecast to 4.8%, the central government needs increased spending to address the property crisis and price pressures.

· China’s 6 trillion yuan local government financing vehicle (LGFV) non-standard debt defaults surged 20% YoY in the first nine months, hitting the highest level since at least 2019.

· According to the CPCA, China’s October passenger vehicle retail sales reached around 2.2 million units, up 8.2% YoY.

· Bloomberg: China reportedly asked domestic automakers to pause European expansion and maintain a low profile during tariff negotiations. Dongfeng Motor Group halted plans for potential car production in Italy.

· Hong Kong issued 1 billion yuan ($140 million) in three-year government agency bonds under its infrastructure bond program, part of efforts to boost offshore yuan liquidity.

Commodities & Forex

· The Bloomberg Dollar Index and U.S. Treasury yields fell Thursday, partially reversing gains from the prior three sessions. The euro extended gains after mixed PMI data, while the yen led gains among G-10 currencies.

· WTI crude futures fell nearly 1% to settle around $70/barrel as oversupply concerns outweighed risks of Israeli retaliation against Iran.

· Teck Resources cut zinc output targets due to a smelter fire, exacerbating supply concerns and pushing zinc prices to a 20-month high.

Earnings & Data Watch

U.S. October UoM Consumer Sentiment Final (Forecast: 69, Prior: 68.9)

Author: Terry Chow

Proofreader: Penny Yang