02.10 - Catalonia votes, Vegas deals with terror
There are some big headlines at the start of this trading week. The world is shocked to hear about the deadly terror attack that took place in Vegas. Europe is also troubled after Catalonia’s voted to depart from Spain with a 90% of the people said Yes to leave Spain. Elsewhere, the USD continued to rise against other major currencies. These are the big headlines for today.
The Euro started the week on the back foot, as investors monitored the aftermath of an independence vote in Spain's Catalonia over the weekend, which was followed by violent clashes between voters and national police.
Catalonia's regional leader opened the door to a unilateral declaration of independence from Spain on Sunday after voters defied a violent police crackdown and, according to regional officials, voted 90% in favor of breaking away.
Election results will now be passed along to the Catalan parliament, in which separatists have a majority and a declaration of independence could be declared within days.
Investors shunned Spanish stocks, with the IBEX 35 down more than 1% in mid-morning trade. The tensions also had a clear impact in the bond market, with Spanish premiums climbing over comparable German debt.
At least 20 people were killed in a shooting outside the Mandalay Bay Resort and Casino on the Las Vegas Strip during a music festival on Sunday night.
Shots were being fired from the 32nd floor of the resort, according to police.
MGM Resorts International, the owner of Mandalay Bay, dropped 4.5% in premarket trading. Wynn Resorts, another casino operator in Las Vegas, was off by nearly 1%.
"Our thoughts & prayers are with the victims of last night's tragic events. We're grateful for the immediate actions of our first responders," MGM said in a tweet.
The dollar and Treasury yields continued their recent run of gains, underpinned by growing expectations of a Federal Reserve rate hike in December.
Talk of a potentially more hawkish successor to Fed Chair Janet Yellen provided further support.
The dollar index, which measures the greenback against a basket of six major currencies, was up more than 0.5% at 93.45. Meanwhile, U.S. bond yields jumped, with the yield on two-year notes reaching a nine-year high of 1.50%, while the 10-year yield topped 2.37%, their highest since mid-July.
At 14:00 GMT, the ISM will publish its manufacturing survey for September, as investors look for more clues on the strength of the world's largest economy and how it will impact the Fed's view on monetary policy in the months ahead.
Global financial markets started the week on the front foot, as upbeat economic data from Europe and Asia augured well for a sustained pickup in global growth.
Asian-Pacific equities closed mostly higher, though several major markets in the region were shut for holidays.
Meanwhile, European stocks outside of Spain kicked off the week in an upbeat mood, with almost all major bourses in positive territory.
On Wall Street, U.S. stocks pointed to a slightly higher open, with the major benchmarks pointing to gains of around 0.1%.
- by Roger Gain