Market Watch: Poor Flash PMI for Japan and Eurozone

Financial and commodity markets analytics

The dollar is mixed today. Bonds and stocks are higher. The euro was weighed down by a weak PMI, but the market ignored the weak Australian PMI. Yesterday's North American session demonstrated a preference for foreign currencies. With some intraday momentum stretching to the downside, today could be a repeat. 
Gold is hovering around yesterday's low. Gold held below the high of yesterday as well. 
December WTI reached a new five-day low of $85, but now has stabilized.

Asia Pacific
The flash October PMI for Japan has declined. For the first time in this year, the composite PMI fell below 50. The composite PMI is now 49.9, down 51.2 from September. 
In early Asia Pacific trading on Monday, the dollar briefly climbed above JPY150. The US 10-year yield was above 5.0%, and it looked as if the dollar would try again during North American activity. 

Australia's flash pmi was disappointing. The composite dropped to 47.7 from 51.5. This is the lowest since January 2022. The market believes the Reserve Bank of Australia will maintain its hawkish stance at their November 7 meeting. 
The Australian dollar had a bullish day outside of the range on Friday, trading both sides and closing above its high. The disappointing PMI was not enough to stop the follow-through purchases that lifted the Aussie up to $0.6380. Yesterday, it had fallen below $0.6300. Next, the high of last week near $0.6395 is the target.

The economy of the Eurozone has yet to bottom out. The flash PMI revealed further weakness. The highlight of this week will be the ECB's meeting on Thursday. The market believes that the ECB will continue to hike this week, despite September's hike. 

Today, there are two sets of UK data. The first is the labor markets. The report released today showed that employment dropped by 82k during the three-month period ending August, after falling by 133k in the same time frame. This would have meant a loss of 207k under the old methodology. In September, the number of jobless claims increased by 20.44k. The UK's preliminary PMI for October was essentially unchanged from the final September reading. 

In the morning European time, the Euro is back at almost $1.0635. It will be disappointing if the Euro falls below $1.0600-20. 
Yesterday, the pound rose for a third time, to reach its highest level in nearly two weeks, at about $1.2260. Before selling pressure returned, the gains reached almost $1.2290. In the European morning, it has returned to its session lows.

Later this week, it is likely that the expectations of a strong US GDP Q3 will be confirmed. Bloomberg's median forecast has risen to 4.5% - more than double the pace of Q2. Investors and business are eagerly anticipating Q4. 

Yesterday, the US dollar reached a new low of three days against the Canadian Dollar. Today's range is extended to around CAD1.3660. The greenback has to fall below the low of last week in order for something significant to happen technically.