Overnight World Market Headlines and the Day Ahead

Overnight headlines U.S. investors should pay attention to, according to Nomura market strategists, include:

• Germany: Factory orders declined by a greater-than-expected 5.7% m-o-m (Consensus: -2.5%; Nomura: -2.0%) in August, but July figures were revised upwards from 4.6% to 4.9%.
• Eurozone: Sentix investor confidence came at -13.7 (Consensus: -11.0; Previous: -9.8) in October.
• Brazil: Aecio Neves pulled off a surprise election result, forcing a second round with incumbent President Dilma Rousseff.
• China: The PBoC's MPC has stressed that difficulties faced in “the complicated economic and financial situation” cannot be underestimated – the key difference in wording between its Q2 and Q3 statements.

European equities posted gains, with most regional indices 0.2-1.0% higher. Spanish and German indices are leading the gains. In core bonds, Bunds and Gilts caught up with the USTs post-NFP rally and 10yr yields are 1-2bp lower. The semi-core and peripheral bond markets underperformed Bunds, and yields spreads are mostly wider across the curves: Spain is about 2bp wider in the 5-10yr sector. In FX, USD held on to broad gains, with EURUSD around 1.2540, and USDJPY above 109 despite a report over the weekend that Japan‟s GPIF may delay its portfolio reform to November or later.

Looking to the day ahead, Nomura points to:

• European Union: ESM's MD Regling attends open hearing of Lower House's Budget Committee on Banking Union, in Berlin.
• Germany Chancellor Merkel speaks at event in Berlin on scaling back bureaucracy.

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