Market wrap: equities sink, lead by Asia; New risk-off, same old risks - ANZ

In a market wrap, analysts at ANZ Bank New Zealand explained that US equities continued to sink, following weakness through the Asian session, as markets continue to digest the combination of higher US rates, ongoing trade tensions, and Chinese growth concerns. 

Key Quotes:

"At the time of writing the S&P 500 was off 1.9%."

"GBP remained under pressure as a result of prolonged Brexit uncertainty, while Italy’s political dramas continue to affect European markets."

"The DAX fell 1.1%, the CAC fell 0.6% And FTSE was off 0.4%."

"Fixed income markets were generally firmer, with the yield on the US 10-year note falling 4bps to 3.16%."

"Italian BTP yields rose 14bps."

"Commodity markets were generally under pressure."

"Oil fell 1.4% to USD69.3/bbl and gold was up 0.4%.

Data event pulse:

Strong:

Philadelphia Fed business outlook was broadly stable in October at 22.2, compared with 22.9 in September and expectations of 20.0. This release follows Empire manufacturing and points to ongoing strength in manufacturing output into the start of Q4. Employment was a touch firmer at 19.5, up from 17.6; new orders eased a touch to 19.3 from 21.4.

Hitting capacity:

The US leading index rose 0.5% m/m in September, up from 0.4% m/m in August. It points to a healthy pace of growth, although its acceleration is slowing, which may be a symptom of capacity constraints.

Trend intact:

UK September retail sales fell 0.8% m/m excluding auto fuels, but the August print was revised up to 0.5% m/m from 0.3%. The main weakness in the September month was in sales from food stores, which fell 1.5%. Still, the underlying uptrend remains intact with the 3-month average at 0.4% m/m. Growth in online sales remains strong, up 11% y/y.