Market Update - 1 November 2012

• It was back to work in the US as the NYSE reopened overnight on generator power and swung between negative and positive territory as the market digested data that business activity in the US contracted again in October as well as the impact of Sandy.

• Oil added 0.7% while gasoline jumped 1.2% on the day, the S&P 500 index closed just 0.1% in the black at 1413.51 as the automobile sector surged on General Motors strong profits release and the utilities and consumer goods sectors also gained.

• USDMYR opens where it closed yesterday at 3.0500. Volumes have remained low but we might see some volatility today and tomorrow ahead of the crucial US NFP numbers to be released on Friday as well as the US presidential election that’s coming next week, baring any rescheduling. Erm…somehow I feel the NFP number will be a good one ahead of the elections…….

• Finance Minister Yiannis Stournaras submitted the 2013 budget to the Greek parliament overnight and has predicted that under such measures, the level of public debt to GDP will hit 189.1% against 179.3% in previous draft, an economic contraction of 4.5% will occur in 2012 against a 3.8% previous estimate and it will achieve a primary surplus of 0.4% of GDP. Following that Stournaras spoke to eurozone finance ministers to discuss ways to fill the financing gap.

• German finance minister Wolfgang Schaeuble said after the phone call that no deal had been done yet and that Greece had to meet conditions before the next tranche of its bailout will be paid.

• Eurozone unemployment was released and it hit a record 11.6% in September from 10.3% a year ago, led by Spain and Greece with 25.8% and 25.1% unemployment respectively, while the inflation data released alongside showed that it eased to 2.5% in October, still 0.5% above the ECB’s target rate of 2.0%.

• As the storm starts to die down the US Bureau of Labor Statistics have confirmed that the October monthly payrolls will still be released on November 2, a crucial figure ahead of the election on November 6.

• UK Prime Minister David Cameron has received a clear message from his constituents as the Conservatives combined with Labour to demand he push for a reduction in the European Union’s budget spending. The European Commission has proposed a spending package of 1.03 trillion euros for 2014-2020, up 6% from the 2007-2013 budget, and the vote has urged him to go into the negotiations in Brussels on November 22-23 to reduce that figure in real-terms, rather than just prevent it increasing.