\n\tBy Greg Peel<\/p>\n
\n\tThere was one whole lotta nothin' going on on Wall Street on Friday night as the stock market looked towards Tuesday night's mid-term elections and Wednesday night's Fed announcement on QE2. Volume was above the 1bn mark on the big board but considering it was end of month, that was pretty poor. The Dow traded in a tight range before closing up 4 points while the S&P was flat at 1183.<\/p>\n
\n\tThere was potential for volatility on the release of the first estimate of third quarter GDP (data for July is extrapolated across the three months) but the result came in at growth of 2.0% when expectations were in the range of 1.9-2.1%. That's up from 1.7% in the second quarter, but closer inspection of the breakdown revealed inventory building was significant and there was a lump of sporadic defense spending. Last year inventory build was considered healthy but this year it's considered dangerous given that stock could well sit on shelves and gather dust.<\/p>\n
\n\tThe fortnightly Michigan Uni consumer sentiment reading was also disturbing, coming in at 67.7 when economists had estimated 68.5. That's down from 67.9 in the previous survey and 68.2 in the last October survey.<\/p>\n
\n\tWhile the stock market largely ignored the data, currency markets took the weak confidence reading and GDP as enough reason to sell the US dollar, which was down 0.3% on its index to 77.07. Any weakness is more fuel for the fire of QE2, so the US ten-year bond yield fell back another five basis points to 2.61% and gold jumped another US$16.40 to US$1359.80\/oz. The Aussie added half a cent to US$0.9835.<\/p>\n
\n\tDespite the US dollar's fall, commodities also saw the weakness in the US data and were also likely squaring up ahead of Wednesday. Oil fell US75c to US$81.43\/bbl while base metals were mostly weaker, with tin and zinc down 2%.<\/p>\n
\n\tThe SPI Overnight, on the other hand, rose 17 points or 0.4%.<\/p>\n
\n\tSo begins what may well be a tumultuous week, but not before Wednesday. It is likely markets will not be overly volatile ahead of the Fed announcement unless anything is leaked by the central bank prior to that time or unless something out of left field occurs. This week features the global round of PMI data beginning with manufacturing numbers today and continuing throughout the week with services and construction sector equivalents. It's also an unemployment week in the US, culminating in the non-farm payroll release on Friday.<\/p>\n
\n\tAnd it's a monetary policy decision week across the globe, with the RBA making its decision tomorrow, the Fed on Wednesday, the ECB and Bank of England on Thursday, and the Bank of Japan on Friday. The BoJ meeting has been brought forward from later in the month in order to make a rapid response where necessary to the Fed announcement. Which way will the Currency War turn this week?<\/p>\n
\n\tIn the US tonight it's the manufacturing PMI along with personal income and expenditure and construction spending. Tuesday it's vehicle sales and the election, which will likely not be determined immediately. Wednesday it's the services PMI, factory orders and the ADP private sector unemployment number ahead of the Fed announcement, while Thursday sees chain store sales and third quarter productivity. Friday it's pending home sales, consumer credit and the official jobs numbers.<\/p>\n
\n\tIt's a busy week in Australia beginning today with the manufacturing PMI, TD Securities monthly inflation gauge and third quarter house prices. Tuesday is Melbourne Cup day which means a holiday in Victoria but nowhere else, but it will effectively be a holiday for most from lunch time. The RBA will nevertheless make its decision at 2.30pm ahead of the jump.<\/p>\n
\n\tWednesday sees hangovers, the services PMI and building approvals, with retail sales and the trade balance on Thursday and the construction PMI on Friday. Friday also brings the RBA's quarterly statement on monetary policy which may provide insight into a December rate rise if no November rate rise is forthcoming, as the odds are favouring.<\/p>\n
\n\tIt's a quieter week this week on the AGM front before it all hots up again through the rest of November. This week also sees Westpac's ((WBC)) full-year result on Wednesday, News Corp's ((NWS)) quarterly on Thursday and CSR's ((CSR)) half-year and Telstra's ((TLS)) quarterly on Friday.<\/p>\n
\n\tNote also that today sees the release of China's manufacturing PMI.<\/p>\n