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Key Highlights

• Crude oil price started a major downside move from the $77.00 resistance against the US dollar.
• There are two bearish trend lines in place with resistance at $68.50 on the 4-hours chart of XTI/USD.
• The Euro Zone CPI in Oct 2018 (Preliminary) increased 2.2% (YoY), similar to the forecast.
• Today, the US ISM Manufacturing PMI for Oct 2018 will be released, which is forecasted to decline from 59.8 to 59.0.

Crude Oil Price Technical Analysis

After topping around the $76.80 and $77.00 levels, crude oil price started a major downside move against the US Dollar. The price traded below the $74.00 and $70.00 support levels to move into a bearish zone.

Looking at the 4-hours chart of XTI/USD, the price even broke the $68.80 support and settled below the 100 (red) simple moving average (4-hours). It opened the doors for more losses and the price recently traded close to the $65.00 level.

A low was formed at $65.32 and later the price started consolidating losses. An initial resistance is near the 23.6% Fib retracement level of the recent decline from the $72.42 high to $65.32 low.

More importantly, there are two bearish trend lines in place with resistance at $68.50. Besides, the 50% Fib retracement level of the recent decline from the $72.42 high to $65.32 low is around $68.80.

Therefore, if the price corrects higher from the current levels, it is likely to face a strong selling interest near the $67.80 and $68.80 resistance levels. On the downside, a break below the $65.00 support may perhaps push the price towards the $62.00 support.

Fundamentally, the ADP Employment Change for Oct 2018 was released by the Automatic Data Processing, Inc. The market was looking for a change of around 189K in Oct 2018.

However, the actual result was much better as the private sector employment increased by 227K jobs, more than the 189K forecast. It helped the US Dollar in gaining traction, resulting in increase in bearish pressure on pairs like EUR/USD and GBP/USD.

EUR/USD extended declines below the 1.1340 level and GBP/USD seems to be struggling to recover above the 1.2800 level.

Economic Releases to Watch Today

• BoE Interest Rate Decision – Forecast 0.75%, versus 0.75% previous.
• US ISM Manufacturing PMI for Oct 2018 – Forecast 59.0, versus 59.8 previous.
• US Initial Jobless Claims – Forecast 215K, versus 215K previous.

The report from the US Energy Information Administration (EIA) shows that total crude oil and petroleum products stocks declined -6.4 mmb to 1248.6 mmb in the week ended October 26. Crude oil inventory increased +3.22 mmb (consensus: +4.11 mmb) to 426 mmb. Inventories increased in 3 out of of 5 PADDs. Meanwhile, Cushing stock added +1.88 mmb to 31.88 mmb. Utilization rate gained +0.2% to 89.4% and crude production added +0.3M bpd to 11.2M bpd for the week. Concerning refined oil product inventories, gasoline inventory fell -3.16 mmb to 226.17 mmb although demand slipped -0.67% to 9.26M bpd. The market had anticipated a -2.14 decrease in stockpile. Production gained +3.35% to 10.36M bpd while imports rose +9.67% to 0.36M bpd during the week. Distillate inventory declined -4.05 mmb to 126.32 mmb as demand gained jumped +10.48% to 4.43M bpd. The market had anticipated a -1.37 mmb drop in inventory. Production gained +0.46% to 4.98M bpd while imports declined -13.5% to 0.14M bpd during the week.

Released after market close on Wednesday, the industry- sponsored API estimated that crude oil inventory jumped another significant amount of +5.69 mmb during the week. For refined oil products, gasoline stockpile slumped -3.5 mmb while distillate was down -3.1 mmb.

STOCKS

Recovery is seen in global equities and they are likely to move up in the near term before another leg of fall starts.

Dow (25115.76, +0.97%) has broken above the immediate channel resistance on the daily candles and could not head higher to test 25500-26000 levels in the near term from where a rejection could be expected. Immediate view is a rise towards 26000.

Dax (11447.51, +1.42%) is looking bullish just now and could target 11800 in the near to medium term while above 11000-11200.

Nikkei (21794.31, -0.58%) has moved up a bit and is trying to recover back towards 22500 which could be a decent resistance on the weekly candles. A break above 22500 is needed for a fresh medium term rise; else 22500 could produce rejection to push the index back towards 21500.

Shanghai (2628.57, +0.99%) is also slowly moving up and could be headed towards 2700 in the near term which is an immediate resistance on the daily candles.

Nifty (10386.60, +1.85%) also bounced back well yesterday. If the rise sustains, the index could now be headed towards 10600-10800. Else a fall from 10400 could again send it back to 10200-10050 levels in the next few sessions.

COMMODITIES

Potential supply disruption is a worry that still looms till the Iran sanction date of 4th Nov and its impact is seen. Some stability could be seen in the next few sessions before any trigger again initiates some volatile moves next week.

Crude prices have fallen from yesterday's levels. Although the prices seem to have cooled off just now, we need to keep an eye on the important support levels near 65-64 and 74 on WTI and Brent respectively.

Brent (74.75) has come off from immediate resistance at 77-78 as mentioned in the last few editions. But note long term support near 74 which if holds could bring another leg of bounce in the near term. It on a break below 74 would we review chances of further downside.

WTI (65.11) is also trading above long term support near 65-64 levels.

We need to be cautious at current levels as a bounce back in crude prices could be on the cards for the coming week.

Gold (1219.20) has moved below 1220 and while the US Dollar continues to strengthen, gold could well head towards 1210-1200 again in the coming weeks. Important resistance to watch would be 1240 while downside could be capped at 1200.

14 and lower at 13.5 are important near term supports for Silver (14.32) and could be tested before a bounce back is seen next week towards 14.5 or higher. Near term looks bearish towards 13.5.

Copper 2.6595 has dipped further and trades above crucial near term support at 2.65-2.60 region. This needs to hold to push back the prices towards 2.8-2.9 again in the medium term. A break below 2.60 could make it vulnerable for a fall towards 2.55-2.50 levels.

FOREX

Chances of an interim rise in Euro, Pound and Aussie towards 1.138, 1.29 and 0.7175 respectively. Could that keep the upside for USDINR capped near 74.20 in the next few sessions?

Euro (1.1341) tested a low of 1.1302 yesterday (close to its 2018 low of 1.1301) and has risen from there. It has immediate resistance near 1.135, which if broken could lead to a test of higher resistance near 1.138-1.140 in the next couple of sessions. However, there are good chances of an ultimate break below 1.1301 taking place in the next couple of weeks.

Dollar Index (96.88) tested resistance on daily candles near 97.20 yesterday and has dipped from there. It could come off towards 96.70-50 in the next couple of sessions but ultimately looks headed higher in the medium term.

Dollar Yen (112.84) could dip more to test immediate support near 112.40-50 in the next 1-2 sessions. While it stays above 112.40, the bias is tilted towards a re-test of levels near 114 in the next 1-2 weeks.

Euro-Yen (127.97) has crucial channel resistance near 128.5. It could continue being bearish while below this resistance, targeting support near 127 on weekly candles in the next 1-2 sessions.

Pound (1.2845) has bounced from crucial support at 1.27 on daily line chart and could now move up towards resistance near 1.29-1.30 by next week.

Aussie (0.7115) could move up further to test resistance near 0.7150-0.7175 by next week. Meanwhile, the support at 0.705-0.706 continues to stay strong for the Aussie. However while below 0.7175, the possibility of the support breaking in the weeks ahead cannot be ignored. On weekly line chart, this level is seen as a crucial long term support, whose break could lead to sustained bearishness.#

Dollar Rupee (73.955) – Could stay between 73.70-74.20 in the next 2-3 sessions. After that, a rise to 74.50 is likely in the next week. If 74.50 is then breached, it would open up 75+.

INTEREST RATES

The US 10 Year (3.16%), as forecasted yesterday, has moved up towards 3.16%.. It is now testing channel resistance on near term chart and could come off from here back towards 3.10% by next week. However, in case this resistance breaks, it could target 3.20% next week.

Inspite of the BoJ leaving rates and policy unchanged, Japanese 10 year yield (0.14%) has risen from 0.106% on Monday to 0.14%. The Japanese 5 year yield (-0.064%) has also risen from -0.086% at the beginning of the week. However strong resistance for the 5 year yield near -0.052% suggests that the upside might be capped for both 5 year and 10 year yields in the near term.

The US dollar is higher against most major pairs on Wednesday. The Japanese yen and the British pound were outliers as they both rose in the session. The Bank of Japan (BOJ) kept monetary policy unchanged as expected earlier today, and the Bank of England (BoE) is anticipated to do the same. Positive Brexit comments today boosted sterling ahead of the central bank’s Super Thursday.

• US private payrolls beat expectations with a 227,000 gain
• BoE rate to remain intact, but focus on press conference
• Post-Brexit trade deal deadline set for November 21

Pound Sensitive to Brexit Chatter

The GBP/USD rose 0.60 percent on Wednesday. The currency pair is trading at 1.2778 ahead of Super Thursday. The Bank of England (BoE) will release its Inflation report, monetary policy summary, official bank rate and the votes from MPC members at 8:00 am EDT. BoE Governor Mark Carney will host a press conference at 8:30 am EDT.

Sterling is still 0.40 percent lower than the USD on a weekly basis as Brexit concerns continue putting downward pressure on the pair. The rebound on Wednesday came after a moment from UK Brexit Secretary Dominic Raab said that the exit deal with the EU would be finalized by November 21. With less than a month to go it falls in line with what members of both negotiation teams have said. The deal is mostly agreed to, 95 percent by some measure but the final stretch has proven difficult.

The backstop issue could be close to solved, but details are scarce and with this new line on the sand politicians are put under even further pressure to compromise if a deal is to be reached in time.

The Bank of England (BoE) will keep monitoring the situation as a failure to reach a deal would put the UK economy on the brink of a recession. Standard and Poor’s published a report where the most immediate outcome could be a credit rating downgrade.

Despite the assurances from some politicians that a deal is very close, the probability of a no-deal exit has actually gone up the market remains unconvinced given there have been few details on the actual agreement and a lot of time spent on the backstop.

Governor Carney has been clear on the risks of a no-deal Brexit, and his comments on Thursday might cancel out the optimism based move in the pound.

Dollar Rides Strong Fundamentals to Overcome Euro

The EUR/USD lost 0.22 percent on Wednesday. The single pair is trading at 1.1318 after strong US fundamentals have given a leg up to the US dollar. The ADP private payrolls report exceeded expectations ahead of Friday’s release of the U.S. non farm payrolls (NFP). The US economy is forecasted to have added 200,000 jobs. The September NFP numbers underperformed, but weather disruptions due to Hurricane Florence were a factor.

A recovering stock market and more risk tolerance from investors took the US dollar higher against major pairs. Stronger US spending on Monday, consumer confidence on Tuesday and private payrolls and the employment cost index on Wednesday have given the greenback a strong argument to appreciate. Manufacturing is up next on Thursday and of course the biggest indicator in the market the U.S. non farm payrolls (NFP) will be published on Friday.

The US dollar is on track to a 16 month high with solid fundamentals but also a fine balance of investor appetite for the safety of the big dollar. The data might not be impressive but it is consistent, that is something no other major economy can claim.

Gold Lower but Geopolitics Keep it in Play

Gold prices fell on Thursday. The yellow metal is trading at $1,214 after the US dollar recovered its mojo with strong fundamentals. US indicators this week have been solid, pointing to more monetary policy tightening by the U.S. Federal Reserve. The central bank is heavily anticipated to hike in December with more to come in 2019.

Gold had lost some of its luster as a safe haven as rate differentials pushed investors to seek safety in currencies. The stock market sell-off earlier this month triggered by US rate hike anxiety put the yellow metal back on investor’s radars

Oil Tumbles on Oversupply Concerns Despite Strong Demand

Oil prices dropped on Thursday despite a the expected buildup in US crude inventories matching the forecast, and a larger drawdown in gasoline and distillates. The market is starting to price in a smaller than anticipated drop in crude exports from Iran as its biggest customers remain defiant on following US sanctions.

US oil stocks have risen for sixth consecutive weeks, but with product stocks decline the biggest factor behind the decline in energy prices was on what will happen in November when the US sanctions against Iran kicked in. Originally oil prices pointed to $100 or higher, until Russia and Saudi Arabia pledged to close the gap left. Now with production already rising, the question on how big will the gap be to begin with is making investors reconsider. If Iran and its customers find enough loopholes to avoid US sanctions there could be more supply than originally intended, putting the black stuff on the back foot.

Market events to watch this week:

Thursday, November 1
5:30am GBP Manufacturing PMI
8:00am GBP BOE Inflation Report
8:00am GBP MPC Official Bank Rate Votes
8:00am GBP Monetary Policy Summary
8:00am GBP Official Bank Rate
8:30am GBP BOE Gov Carney Speaks
10:00am USD ISM Manufacturing PMI
8:00pm NZD ANZ Business Confidence
8:30pm AUD Retail Sales m/m
Friday, November 2
8:30am CAD Employment Change
8:30am CAD Trade Balance
8:30am CAD Unemployment Rate
8:30am USD Average Hourly Earnings m/m
8:30am USD Non-Farm Employment Change
8:30am USD Unemployment Rate

Daily Pivots: (S1) 112.73; (P) 113.05; (R1) 113.31; More..

A temporary top is in place at 113.38 in USD/JPY and intraday bias is turned neutral first. Another rise is expected with 112.56 minor support intact. Above 113.38 will extend the rebound from 111.37 to 114.54/73 key resistance zone. On the downside, break of 112.56 will possibly extend the correction from 114.54 to 38.2% retracement of 104.62 to 114.54 at 110.75 before completion.

In the bigger picture, corrective fall from 118.65 (2016 high) should have completed with three waves down to 104.62. Decisive break of 114.73 resistance will likely resume whole rally from 98.97 (2016 low) to 100% projection of 98.97 to 118.65 from 104.62 at 124.30, which is reasonably close to 125.85 (2015 high). This will stay as the preferred case as long as 109.76 support holds. However, decisive break of 109.76 will dampen this bullish view and turns outlook mixed again.

Daily Pivots: (S1) 1.0045; (P) 1.0072; (R1) 1.0112; More...

Intraday bias in USD/CHF remains on the upside for the moment, with focus on 1.0067 key resistance. Sustained break of 1.0067 will confirm resumption of larger rise from 0.9186 and should target 1.0342 key resistance next. However, break of 1.0007 minor support will be the first sign of near term topping. Intraday bias will be turned back to the downside for 0.9848/9954 support zone.

In the bigger picture, the pullback from 1.0067 has completed at 0.9541 already. And rise from 0.9186 is likely resuming. Firm break of 1.0067 will pave the way to retest 1.0342 key resistance. We'd be cautious on strong resistance from there to limit upside to bring another medium term fall to extend long term range trading.

Daily Pivots: (S1) 1.1289; (P) 1.1325; (R1) 1.1350; More....

At this point, further decline is expected in EUR/USD as long as 1.1421 minor resistance holds. Decisive break of 1.1300 key support will resume whole down trend from 1.2555 and target 1.1186 fibonacci level next. On the upside, however, break of 1.1421 resistance will indicate short term bottoming, with bullish convergence condition in 4 hour MACD. Intraday bias will be turned back to the upside for 1.1621 resistance instead.

In the bigger picture, corrective pattern from 1.1300 could have completed at 1.1814 after hitting 38.2% retracement of 1.2555 to 1.1300 at 1.1779. Decisive break of 1.1300 will resume the down trend from 1.2555 to 61.8% retracement of 1.0339 (2017 low) to 1.2555 at 1.1186 next. Sustained break there will pave the way to retest 1.0339. On the upside, break of 1.1814 will delay the bearish case and extend the correction from 1.1300 with another rise before completion.

Daily Pivots: (S1) 1.2698; (P) 1.2765; (R1) 1.2833; More...

GBP/USD's rebound from 1.2692 extends higher today but it's limited below 1.2921 support turned resistance. Intraday bias stays neutral first. As long as 1.2921 holds, near term outlook stays cautiously bearish and another decline is in favor. On the downside, break of 1.2692 will target 1.2661 low first. Decisive break there will resume larger down trend from 1.4376. Next target is 61.8% projection of 1.4376 to 1.2661 from 1.3297 at 1.2237. However, break of 1.2921 should extend the consolidation pattern from 1.2661 with another rise towards 1.3297 resistance before completion.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.

Sterling surged overnight on Brexit optimism and is boosted further in Asia with more Brexit-positive news. Though, for today, it's overwhelmed by Australian and New Zealand Dollar on strong risk appetite. The Pound will need to look into BoE economic projections for more inspirations. Dollar, on the other hand, is losing ground broadly again, reversing some of yesterday's socks and yield supported gains. The greenback is followed by Canadian Dollar and Yen as the second and third weakest.

Technically, Euro is an interesting one to watch today. EUR/USD appears to be supported by 1.1300 key level for now and recovers. However, the selloff in EUR/GBP and EUR/AUD is limiting Euro's rebound. EUR/GBP's break of 0.8868 minor support yesterday already suggests near term reversal and could bring deeper fall back to 0.8722 support. The break of 1.5984 support in EUR/AUD is even more important as it's an early indication of medium term reversal. It remains to be see, after all the movements offset each other, whether EUR/USD could defend this key 1.1300 level successfully.

In other markets, DOW closed up 241.12 pts or 0.97% at 25115.76. S&P 500 gained 1.09% to 2711.74. NASDAQ added 2.01% to 7305.90. There are tentative signs of near term reversal in US stocks. Treasury yields also rose broadly after gapping up. 10-year yield rose 0.049 to 3.159. 30 year yield rose 0.046 to 3.402. In particular, 30-year yield has prospect of breaking 3.424 near term resistance to resume recent up trend, before weekly close. Asian markets are mixed though. Nikkei is currently down -0.7%. But Hong Kong HSI is up 1.84%, China Shanghai SSE is up 1.13% and Singapore Strait Times is up 1.16%. Japan 10 year JGB yield is up another 0.0051 at 0.134.

Sterling extends rally on Brexit optimism, BoE Inflation Report eyed

Pound rallies further today on more positive Brexit news. The Times reported that a tentative deal is agreed between UK and the EU on all aspects of a future partnership on services. Most importantly, that would grant access of EU markets to for British financial services companies. Prime Minister Theresa May's senior advisor Oliver Robbins is handling the negotiations in Brussels and is expected to complete it within three weeks.

The news came on top of reports that Brexit Minister Dominic Raab told MPs in a letter dated October 24 that November 21 is the date to conclude the Brexit negotiation. There he said "I would be happy to give evidence to the committee when a deal is finalized, and currently expect 21 November to be suitable." The letter was published on the Commons Brexit committee yesterday. But three hours after that, Raab's office,  Department for Exiting the European Union, backtracked and said there was "There is no set date for the negotiations to conclude. The 21st November was the date offered by the Chair of the Select Committee for the Secretary of State to give evidence."

BoE is widely expected to keep monetary policies unchanged today. Updated forecasts in the quarterly inflation report are the main focuses. Recent economic data from the UK haven't been too encouraging. August GDP growth slowed to 0.0%. PMIs showed a mixed picture, with rebound in manufacturing but slowdown in services and construction. CPI also slowed to 2.4%. But after all, BoE's projections should be based on the main scenario of smooth Brexit, which is still uncertain. For now, there is little chance of seeing when BoE will move interest rate next, until the Brexit dusts settle.

As a recap, this is BoE's August forecast summary.

White House Kudlow: Additional tariffs on China not set in stone

White House economic adviser Larry Kudlow said the additional tariffs on China are not "set in stone right now". He added, "if some kind of amicable deal with China were to happen, then a lot of tariffs might be pulled back." Also, "The policy talks determine this, not an arbitrary timetable. If the policy talks go well, then we'll have a much better situation. If the policy talks don't, it may deteriorate."

Kudlow also said Trump mentioned in a recent interview that if there are "promising policy discussions, I don't know about a full fledged deal, but if things go well, maybe some tariffs get withdrawn and maybe not." However, Kudlow didn't specify which interview he referred to. Instead, the only know one is with Fox News Channel's "The Ingraham Angle" which Trump said he expects a "great deal" with China, without mentioning withdrawing tariffs.

SNB Jordan: Swiss among hardest hit in full-scale trade war

SNB Chair Thomas Jordan warned yesterday that Switzerland  could be heavily hit if full-scale trade war broke out. He said "All countries would feel the detrimental effect of a global trade war, but small, open economies such as Switzerland would be among those hardest hit."

Additionally, the current trade tensions have already made it more difficult to conduct monetary policy. He noted, "a wave of protectionism would create a lot of uncertainty, be it with regard to the short-term development of the real economy and prices, or with regard to the longer-term macroeconomic context." And, "the risk of monetary policy mistakes would increase, at least while the economy is in the process of adapting to the changed market conditions."

Jordan also asked the question that the Swiss Franc could be "sought as a safe haven in the event of a trade war", and Swiss could "face particularly strong exposure to a severe contraction in world trade".

Australian manufacturing PMI dropped to 58.3, expansion to continue into 2019

Australia AiG Performance of Manufacturing index dropped to 58.3, seasonally adjusted, in October, down from 59.0. The Australian Industry Group noted in the release that the PMI now indicated twenty-five months of uninterrupted recovery and expansion, "longest run of recovery or expansion in this data series since 2005". The broad based expansion was led by the wood and paper and the food & beverages sectors. And, the details suggested that manufacturing will "continue to expand for the rest of 2018 and into 2019."

Also from Australia, trade surplus widened to AUD 3.02B in September.

China Caixin PMI manufacturing: Economy has not seen obvious improvement

China Caixin PMI manufacturing rose 0.1 to 50.1 in October, matched expectations. Markit noted there was only "marginal increase in total new work amid further drop in export sales". Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said, "Overall, expansion across the manufacturing sector was still weak. Production and business confidence continued to cool despite stable demand. The pressure on production costs didn't ease. China's economy has not seen obvious improvement."

Looking ahead

BoE rate decision will be the main focus for today. UK will also release PMI manufacturing. Swiss will release SECO consumer confidence, CPI and PMI manufacturing in European session too. Later in the day, US data will take center stage with ISM manufacturing, construction spending, non-farm productivity and jobless claims featured.

GBP/USD Daily Outlook

Daily Pivots: (S1) 1.2698; (P) 1.2765; (R1) 1.2833; More...

GBP/USD's rebound from 1.2692 extends higher today but it's limited below 1.2921 support turned resistance. Intraday bias stays neutral first. As long as 1.2921 holds, near term outlook stays cautiously bearish and another decline is in favor. On the downside, break of 1.2692 will target 1.2661 low first. Decisive break there will resume larger down trend from 1.4376. Next target is 61.8% projection of 1.4376 to 1.2661 from 1.3297 at 1.2237. However, break of 1.2921 should extend the consolidation pattern from 1.2661 with another rise towards 1.3297 resistance before completion.

In the bigger picture, whole medium term rebound from 1.1946 (2016 low) should have completed at 1.4376 already, after rejection from 55 month EMA. The structure and momentum of the fall from 1.4376 argues that it's resuming long term down trend. And this will be the preferred case as long as 38.2% retracement of 1.4376 to 1.2661 at 1.3316 holds. However, firm break of 1.3316 would bring stronger rebound to 61.8% retracement at 1.3721. And, the eventual depth of the fall from 1.4376, and the chance of hitting 1.1946 low, will depend on the strength of the interim corrective rebound from 1.2661.

Economic Indicators Update

China Caixin PMI manufacturing rose 0.1 to 50.1 in October, matched expectations. Markit noted there was only "marginal increase in total new work amid further drop in export sales".

Commenting on the China General Manufacturing PMI™ data, Dr. Zhengsheng Zhong, Director of Macroeconomic Analysis at CEBM Group said:

"The Caixin China General Manufacturing PMI edged up to 50.1 in October from the month before. The subindexes for new orders and employment both edged higher, with the former remaining in expansionary territory and the latter in contractionary territory. The subindex for new export orders also recovered despite staying in negative territory, just off a more than two-year low in September.

"However, the output subindex dropped for the second straight month despite remaining in positive territory, which was in line with the recent significant drop in value-added industrial output despite the rise in manufacturing investment. This may indicate that investment was largely driven by demand related to environmental protection or technological transformation instead of capacity expansion. The subindex for future output, which reflects manufacturers' production outlook over the next 12 months, stayed in positive territory but dipped further, suggesting ongoing low business confidence.

"The subindexes for output charges and input costs both stayed in positive territory, with the former falling and the latter climbing, indicating that upward pressure on the prices of industrial products remained. The subindexes for stocks of finished items and those of purchased items both rose marginally, with the former in negative territory and the latter in positive territory, pointing to a stable demand for manufactured goods. The subindex for suppliers' delivery times fell in October following a rise in the previous month and stayed in negative territory, implying ongoing pressure on capital turnover among goods producers.

"Overall, expansion across the manufacturing sector was still weak. Production and business confidence continued to cool despite stable demand. The pressure on production costs didn't ease. China's economy has not seen obvious improvement."

Full release here.