Morning Call For Friday, Nov. 3

OVERNIGHT MARKETS AND NEWS

Dec E-mini S&Ps (ESZ17 +0.07%) this morning are up +0.10% before U.S. data on Oct payrolls and the Sep trade balance. The markets are expecting a surge in hiring last month of +300,000 in non-farm payrolls following September’s hurricane-induced job losses of -33,000. European stocks are down -0.02%, led by losses in bank stocks, after Societe Generale and Este Group reported weaker-than-expected quarterly revenue. Strength in European automakers limited the downside in the overall market after Renault SA jumped 5% as the French government sold its stake in the company. Asian stocks settled mostly higher: Japan closed for holiday, Hong Kong +0.30%, China-0.34%, Taiwan +0.11%, Australia +0.47%, Singapore +0.05%, South Korea +0.39%, India +0.33%. China’s Shanghai Composite tumbled to a 5-week low as brokerage and technology stocks declined due to deleveraging concerns. A commentary in the PBOC-backed Financial News said that regulators should step up efforts to clean up all kinds of “financial mess” in order to reduce financial risks. India’s Sensex Stock Index posted a new record high on better-than-expected quarterly earnings results with 21 of the 32 companies in the Sensex index that have announced earnings results thus far beating market expectations.

The dollar index (DXY00 +0.10%) is up +0.11%. EUR/USD (^EURUSD) is down -0.11%. USD/JPY (^USDJPY) is down -0.01%.

Dec 10-year T-note prices (ZNZ17 -0.01%) are little changed, down -0.5 of a tick.

ECB Governing Council member Nowotny said “we see the economy improving substantially but we’re not yet there” and that “at some time there will be of course a reducing and some kind of end date to stimulus but it’s too early to have this discussion.”

The UK Oct Markit/CIPS services PMI unexpectedly rose +2.0 to 55.6, stronger than expectations of -0.3 to 53.3 and the fastest pace of expansion in 6 months.

U.S. STOCK PREVIEW

Key U.S. news today includes: (1) Oct non-farm payrolls (expected +310,000, Sep -33,000) and Oct unemployment rate (expected unch at 4.2%, Sep -0.2 to 4.2%), (2) Oct average hourly earnings (expected +0.2% m/m and +2.7% y/y, Sep +0.5% m/m and +2.9% y/y), (3) Sep trade balance (expected -$43.2 billion, Aug -$42.4 billion), (4) Oct ISM non-manufacturing index (expected -1.3 to 58.5, Sep +4.5 to 59.8), (5) Sep factory orders (expected +1.2%, Aug +1.2% and +0.4% ex-transportation), (6) revised Oct Markit services PMI (expected unch at 55.9, prelim-Oct +0.6 to 55.9), (7) Minneapolis Fed President Neel Kashkari (voter) speaks in a moderated Q&A on Women in Housing and Finance.