Hong Kong shares volatile, Asia markets mixed; China’s PMI shrinks to decline

Top US-China diplomats discuss relationship, Russian war: State Department

US Secretary of State Antony Blinken spoke with Chinese Foreign Minister Wang Yi and discussed “the need to maintain open lines of communication,” according to a State Department readout.

Blinken said he also discussed handling competition between the U.S. and China “responsibly,” without elaborating.

The State Department said Blinken raised the issue of Russia’s war against Ukraine and “the threats it poses to global security and economic stability,”[ads1]; the statement said.

Ji Hye Lee

The US dollar has more room to strengthen on interest rate differentials: Wells Fargo

The American dollar is expected to strengthen further due to interest rate differentials as central banks around the world take a “less hawkish” tone, according to Wells Fargo.

“We’re starting to see some of the foreign central banks … turn a little bit on the less hawkish side,” as the Federal Reserve maintains its hawkish stance, currency strategist Brendan McKenna said on CNBC’s “Squawk Box Asia.”

McKenna said he expects the dollar’s strengthening to continue into the first quarter of next year “at least.”

Ji Hye Lee

Retail sales in Australia rose 0.6% in September

Australia’s retail sales rose 0.6% in September from August, official data showed, in line with expectations in a Reuters poll and at the same pace reported in the previous month’s period.

Sales of clothes, shoes and personal accessories rose 2%, while cafes, restaurants and takeaway food increased by 1.3%.

The nation’s retail sales volume is released on Friday, and ANZ Research expects quarterly growth of 0.4%.

“This would represent the slowest growth since Covid, but still solid for household spending given the shift from retail to services,” ANZ Research said in a tweet.

— Abigail Of

Goldman Sachs expects Fed rates to top out at 5%

Economists at Goldman Sachs expect Federal Reserve rates to peak at 5%, after raising their forecast for the central bank to raise 75 basis points at this week’s upcoming meeting.

Economists led by Jan Hatzius said in a Saturday note that they are adding another 25 basis points to their forecasts – now calling for a 50 bps increase in December, a 25 bps increase in February and another 25 bps in March.

“Inflation is likely to remain uncomfortably high for some time, which could make continuing to move in small increments the path of least resistance,” the note said.

Ji Hye Lee

Macao gaming shares fall after casino lockdown from dealer Covid case

Hong Kong-listed Macao gaming shares fell sharply in early trade after a worker saw MGM China‘s Cotai casino tested positive for Covid, according to an announcement from the authorities.

Several areas related to the case were placed under lockdown, another statement said, with the measures expected to be lifted between November 3 and 5.

MGM China shares fell 2.89%, Wynn Macau fell 2.62%, Galaxy Entertainment the share fell 1.85 percent. Sands China shares also fell 2.29%. SJM Holdings also fell more than 3%.

Factory activity in China shrank in October, missing expectations

China’s factory activity shrank in October compared with September, data from the National Bureau of Statistics showed.

The official manufacturing purchasing managers’ index came in at 49.2, missing expectations for a reading of 50 – the mark that separates monthly growth from contraction.

In September, the PMI reading was 50.1.

China’s official non-manufacturing PMI came in at 48.7, compared with a print of 50.6 in September.

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Japan’s industrial production falls for the first time in four months

Japan’s industrial output fell 1.6% in September from August, government data showed falling more than expectations for a 1% drop in a Reuters poll and ending a three-month rally.

The fall was led by motor vehicles, chemicals and manufacturing machinery, the release said.

A government survey that estimates figures for industrial production predicts a decline in October, while an increase in November.

– Jihye Lee

CNBC Pro: These 12 cheap global stocks are expected to rally — and analysts love them

Stocks around the world have sold off this year amid recession fears and soaring inflation – and now look cheap.

Analysts say there may be buying opportunities in some stocks that they expect to rise.

To find these stocks, CNBC Pro looked for names under the MSCI World index that met a number of criteria.

CNBC Pro subscribers can read more here.

— Weizhen Tan

Currency check: Japanese yen weakens above 148 levels

Japanese Yen weakened above 148 levels against the US dollar in Asian morning trade for the first time since last Wednesday.

The moves come ahead of the Fed’s policy meeting this week, where the central bank is expected to raise interest rates by 75 basis points, further widening the interest rate differential between the US and Japan.

The Japanese yen saw some strengthening to 146 levels last week ahead of the Bank of Japan’s monetary decision to keep interest rates steady, before creeping back towards 148 against the dollar.

It last stood at 148.23 per dollar.

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China’s factory activity for October is estimated to be unchanged from September

China’s official Purchasing Managers’ Index for October is set to be roughly flat from September, according to a Reuters poll.

The reading is forecast to come in at 50, the point that separates growth from contraction. PMI prints compare activity from month to month.

In September, the economy received a PMI reading of 50.1.

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Traders are watching for signs of a Fed tapering

Wall Street will be watching the Federal Reserve statement this week for signs that the central bank will ease rate hikes.

According to the CME FedWatch tool, traders believe there is an 80% chance the Fed will raise interest rates by three quarters on Wednesday.

That would bring the central bank’s target range to 3.75% to 4%.

Beyond that, however, the market looks more uncertain. There is only a 44% chance of another trip of that size in December.

-Jesse Pound

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