Single Currency Subdued by Catalonian Referendum

Market Reviews

The single currency has declined due to the Catalonian referendum. Preliminary results marked 90% votes for independence. Spanish government tried to inhibit the peaceful campaign, there were violent attacks by the Spanish national police and some say this made so many people to vote for independence. Carles Puigdemont (Catalan President) said that the government will follow the referendum law and Catalonia might announce its independence within two days after informing the regional parliament about the voting results. Spanish PM, however, claimed the referendum to be illicit. Catalonia is striking.

Japanese large manufacturers index rose from 17 to the 10-year maximum of 22 in the third quarter. Large manufacturers outlook increased from 15 to 19. Non-manufacturing index stayed at 23. Non-manufacturing outlook lifted to 19. All industrial capex was up only 7.7%. Bank of China announced that cuts for the RRR (reserve requirement ratio) will extend from 0.5% to 1.5%. Official manufacturing PMI boosted 0.7 pts to the 5-year maximum of 52.4. The new orders index increased 1.7 pts to 54.8. The new export orders index rose 0.9 pts to 51.3. The input prices index was up 3.1 pts to the yearly maximum of 68.4. The Caixin manufacturing PMI dropped 0.6 points to 51. Official non-manufacturing PMI improved 2 pts to the 3-year maximum of 55.4.

This week, the US will release ISM indices and non-farm payroll, Britain will announce PMI indices, Canada will show job figures, Australia will feature retail sales and trade balance. Reserve Bank of Australia and European Central Bank activities will have their meeting. Fed members, such as Janet Yellen, Robert Kaplan, Jerome Powell, John Williams, Patrick Harker, Esther George, Raphael Bostic, William Dudley, James Bullard and Eric Rosengren will deliver their speeches.