REUTERS/Maxim ShemetovA riot policeman detains a participant for violation of law and order during a ‘Russian March’ demonstration on National Unity Day in Moscow November 4, 2013. Russia marks National Unity Day on November 4 to celebrate the defeat of Polish invaders in 1612.
Good morning. Here’s what you need to know.
- Markets in Asia were mixed in overnight trading. The Japanese Nikkei 225 rose 0.2%, the Hong Kong Hang Seng fell 0.7%, and the Shanghai Composite rose 0.4%. European markets are in the red across the board, led lower by the Spanish IBEX 35, which is currently trading down 1.2%. In the United States, futures point to a negative open.
- The HSBC/Markit China Services Purchasing Managers Index advanced to 52.6 in October from 52.4 in September, indicating an acceleration in the pace of growth in the Chinese services sector. China’s official services PMI, released Monday, rose to 56.3 from 55.4.
- The Reserve Bank of Australia elected to leave the benchmark policy rate unchanged at 2.5% at its November meeting, as was widely expected by economists. “Sentiment appears to be growing among market participants that the easing cycle which began in November 2011 is now over, and that although a tightening is not ‘around the corner’, the next movement in the cash rate will be upwards,” says BofA Merrill Lynch economist Saul Eslake. “We remain committed to our long-held view that the RBA will need to cut rates again next year — possibly more than once — in the face of persistent weakness in economic activity and rising unemployment.”
- In a speech to business leaders in Osaka, Bank of Japan Governor Haruhiko Kuroda voiced confidence in the economic recoveries in the U.S. and China, two of Japan’s biggest trading partners. He pushed back on the view held by 3 of the 9 board members of the central bank voiced in the latest meeting that it would take much longer than two years to achieve the bank’s 2% inflation target, citing signs of a broad-based rise in prices in the Japanese economy.
- New economic forecasts from the European Commission predict the European Union economy will register no growth in 2013 before expanding 1.4% in 2014. Its latest forecast in May predicted a 0.1% decline in 2013. The forecast also predicts that eurozone unemployment will fall to only 11.8% from its current 12.2% level by 2015.
- Switzerland unexpectedly fell further into deflation in October, with consumer prices down 0.3% from a year earlier. In September, prices were down 0.1% from the previous year, and economists expected an unchanged year-over-year deflation rate.
- Markit’s U.K. Services PMI unexpectedly rose to 62.5 in October from 60.3 in September. Economists had predicted a small decline to 60.0. The number suggests the U.K.’s services sector is on fire, as growth continues to accelerate at a rapid clip.
- The results of ISM’s non-manufacturing survey are released in the U.S. at 10 AM ET. Economists predict the index moderated to 54.0 from September’s 54.4 reading, suggesting a slight slowdown in the pace of growth in the American services sector in October.
- Richmond Fed president Jeffrey Lacker speaks on labour markets at 1:15 PM, with a Q&A to follow. Goldman Sachs economist Jan Hatzius now expects the FOMC to lower its unemployment rate threshold for considering rate hikes to 6.0% from 6.5% at its March meeting.
- AOL reported earnings of $US0.55 per share (ahead of the consensus estimate for $US0.51 EPS) and revenues of $US561 million (above estimates for $US549 million). Shares are slightly higher in pre-market trading.