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- Asian stocks fell to six-week lows on Monday and emerging market currencies wilted as investors sought the safety of the greenback in the wake of Friday’s deadly attacks in Paris and downbeat economic data. Stock futures were pointing to another weak start on Wall Street after main indexes shed about 1 percent in light volume in late trading on Friday. News of the attacks by gunmen and bombers that killed 132 people in the French capital came after U.S. markets closed. Data released before the Tokyo market opened showed that Japan’s economy slipped back into recession in the July-September quarter, contracting at a 0.8 percent annualised rate, compared with the median estimate for a 0.2 percent contraction. Recent economic data from China, where stock markets have recovered some of their poise after a summer collapse, has disappointed global investors. Credit activity in China’s financial system dropped to its lowest level in 15 months in October, while data last week showed steel consumption, a key measure of economic activity, slowed further.
- The euro hit a 6 1/2-month low against the yen and edged near 6 1/2-month lows against the dollar in Asia on Monday after the deadly attacks in Paris added to caution on the common currency. Even before the attacks, the euro had been under pressure from expectations the European Central Bank will step up monetary easing next month, possibly cutting interest rates deeper into negative levels. French warplanes pounded Islamic State positions in Syria on Sunday as police launched an international hunt for a man they believe may have helped organise the deadly wave of assaults. In one sign of stability for the euro zone, Greece and its euro zone creditors reached an agreement on many issues in the reform program that Athens is implementing in return for loans, the head of euro zone finance ministers Jeroen Dijsselbloem said on Sunday. French financial markets will be open as usual on Monday, with extra security measures taken for staff, stock and derivatives exchange Euronext said a day after the attacks. Markets in the Middle East, which trade on Sunday, were hit hard, though part of that decline was due to last week’s drop in oil prices.
- In the week ahead, investors will be turning their attention to Wednesday’s minutes of the Fed’s latest policy meeting for fresh indications on the prospects of a December rate hike. Market players will also be looking ahead to U.S. data on inflation, building permits and manufacturing activity for further clues on the strength of the economy. On Monday, the European Central Bank President Mario Draghi is to speak at an event in Madrid. The U.S. is to release data on manufacturing activity in the New York region. Last week, gold prices ended the week near the lowest level since February 2010 on Friday, as investors cut holdings of the precious metal amid expectations the Federal Reserve will raise interest rates for the first time in nearly a decade next month. Market players shrugged off weaker than expected U.S. retail sales and producer price inflation data on Friday, and instead focused on upbeat consumer sentiment figures.
- U.S. Crude oil futures edged up in early trading on Monday following the deadly attacks on Paris, but prices remained near August lows and oil and other commodities are expected to continue under broad pressure in nervous trading. Data on Friday showed the first rise in the U.S. oil rig count in 11 weeks, and the IEA said there was a record 3 bn barrels of crude and oil products in tanks worldwide. In its monthly report for October, the Paris-based International Energy Agency said global crude inventories stood at a record near 3 billion barrels by the end of September, amid record supply in Iraq, Russia and Saudi Arabia. The agency also said global demand growth is forecast to slow to 1.2 mn bpd in 2016 after surging to 1.8 million barrels a day this year. In its own October monthly report released Thursday, OPEC largely maintained its forecasts for oil demand growth and supply for this year and next. The oil cartel said surplus oil inventories are at the highest level in at least a decade because of increased global production.