Market wrap: Trump sounding relatively composed at the UN General Assembly - ANZ

In a market wrap, analysts at ANZ Bank New Zealand Limited explained that the trading direction lacked conviction overnight with US President Trump sounding relatively composed at the UN General Assembly. 

Key Quotes:

"US equities were slightly weaker (Dow -0.2%, S&P 500 down 0.1%) with EU shares generally higher (FTSE 100 +0.7%). Energy shares rose with the continued push higher in oil, while consumer discretionary climbed on strong consumer confidence. Utilities and telcos declined, however. US treasury yields rose 1-2bps across the curve with 10-year yields touching year-highs at 3.111%. European yields also rose with 10-year bunds up 3.3bps. The USD was mixed in the G10, but moves were mild. Oil contracts continued to climb higher with Brent nearing USD82/bbl and WTI above USD72/bbl (+0.3%). India said they would not be importing any Iranian oil from November. Gold lifted 0.2% to USD1201.6/oz."

The Fed is universally expected to hike 25bp, while the RBNZ is universally expected to stand pat. But in both cases the words they choose could impact markets. The Bank of Japan will be closely watched regarding whether it will again reduce its purchases at an auction of 40-year bonds tomorrow. Bond yields are rising globally for a range of reasons, but the lift in Japan’s long rates since the BoJ tweaked its buying program has arguably played a part. Meanwhile, ECB Board member Peter Praet said he didn’t think Draghi actually gave any new signal on inflation yesterday.

DATA/EVENT PULSE

US consumer feeling bulletproof:

US consumer confidence printed another 18-year high in September. The Conference Board measure lifted to 138.4 (mkt: 132.1; last: 134.7) in September with both current and expectations on the rise. The labour differential is at an eye-watering 32.5 (last: 30.2), quickly approaching the all-time high in the early 2000s. The inflation average was steady at 4.7%. All up the data suggests consumption should remain a key pillar for GDP growth in Q4.

US manufacturers also pretty upbeat:

The Richmond Fed manufacturing index was at 29 (mkt: 20; last: 24). Both shipments and new orders rose solidly. Backlogs and capital expenditure also increased. On the downside, employment dipped, but remains in positive territory. Pricing pressures increased with prices paid and received both higher.

Trade deal signed:

US President Trump signed a refreshed trade deal with South Korea, despite reportedly planning to withdraw from the deal last year. Meanwhile there is no sign of a thaw in US-China trade relations, but Trump said nothing new in his address to the UN General Assembly."