Global equity markets moderated again from yesterday's rally as investors tried to digest the latest data and Federal Reserve (Fed) Chairman Jerome Powell's comments on the prospect of slowing the period of central bank interest rate hikes.
The reading of the ISM survey's manufacturing activity PMI fell to 49.0 points from the previous reading of 50.2 points, marking the first contraction in 2 and a half years, slightly dampening investors' risk appetite.
Coupled with the price index of personal consumption expenditures (PCE) which increased 6% but decreased 6.3% during September, further strengthened the expectation of a slow rate hike by the Fed at its December policy meeting.
Garrett Melson of Natixis Investment Managers Solutions commented that investors are in a 'limbo' phase and are trying to digest and look forward to tomorrow's jobs data.
He added that the market tendency is still bearish with investors expected to be unwilling to take risks and Powell's comments yesterday may just be a 'plaster' to inflation concerns for the time being.
The streak, the Dow Jones Industrial Average fell 0.56% at 34,395.01 while the S&P 500 lost 0.09% at 4,076.57 and the Nasdaq Composite added 0.13% at 11,482.45.
MSCI's gauge of global shares rose 0.79% while developing market shares jumped 0.63%.
In Asia this morning, Japan's Nikkei 225 fell 1.48%, Topix fell 1.6%, South Korea's Kospi fell 0.91% and Australia's S&P/ASX 200 fell 0.67%.
Meanwhile, the dollar index fell to its lowest level since August when Treasuries plunged after Powell's comments yesterday.
The greenback fell 1.002% after hitting its lowest level since Aug. 11 with the Euro up 1.12% at $1.0522 while the Japanese Yen climbed 2.03% at ¥135.29 and Sterling gained 1.56% at $1.2244.
The benchmark 10-year note was down 19.4 points at 3.507% from 3.701%, the 30-year bond was down 21.9 points at 3.6039% from 3.823% and the 2-year note was down 13.2 points at 4.2399% from 4.372%.
