· The dollar gained against the euro and the yen on Monday as investors took a bullish view of the U.S. economy, and as the single currency was hurt by a violence-marred independence vote in Spain’s Catalonia region.
In the currency market, the dollar index, which measures the greenback against a basket of currencies, last traded at 93.663, rising from levels below 92.500 in the prior week.
The greenback was boosted by data showing that U.S. factory activity surged to a more than 13-year high in September amid strong gains in new orders and raw material prices.
Proposed U.S. tax code changes and the likelihood of a further interest rate hike in December have lifted the greenback in the past week.
· The dollar was last up 0.57 percent against the euro at $1.1746 and up 0.12 percent against the yen at112.61.
· A violence-marred Catalonia vote fuelled anxiety over political risk in the euro zone, weighing on the euro. More than 800 people were injured during clashes with the police, which tried to prevent people from voting.
Spanish Prime Minister Mariano Rajoy faces the country’s biggest constitutional crisis in decades after the ballot, in which Catalan officials said 90 percent of voters had chosen to leave Spain.
· U.S. factory activity surged to a more than 13-year high in September amid strong gains in new orders and raw material prices, pointing to underlying strength in the economy even as Hurricanes Harvey and Irma are expected to dent growth in the third quarter.
The Institute for Supply Management (ISM) said its index of national factory activity surged to a reading of 60.8 last month, the highest reading since May 2004, from 58.8 in August.
· In separate report on Monday, the Commerce Department said construction spending rose 0.5 percent to $1.21 trillion. July's construction outlays were revised sharply down to show a 1.2 percent plunge instead of the previously reported 0.6 percent drop. Construction spending increased 2.5 percent on a year-on-year basis.
· The U.S. economy is on track to grow at a 2.7 percent annualized pace in the third quarter, based on the stronger-than-forecast rise on construction spending in August and a surprise acceleration in factory activity in September, the Atlanta Federal Reserve’s GDP Now forecast model showed on Monday.
The latest estimate for third-quarter gross domestic product was faster than the 2.3 percent growth rate calculated on Sept. 29, the Atlanta Fed said.
· The Federal Reserve will need to "look hard" at whether it should raise rates in December, but there is no need to wait for inflation to actually get to, or even begin to rise back to, the Fed's 2-percent target before doing so, a Fed policymaker said Monday.
"I need to see some evidence that I think the cyclical forces are picking up enough that eventually it's likely that inflation will start to build in the future, even if I can't see it yet," Dallas Fed President Robert Kaplan, a voting member this year on the Fed's policy committee, told reporters in El Paso.
· Oil fell more than $1 a barrel on Monday as a rise in U.S. drilling and higher OPEC output put the brakes on a rally that helped prices notch their biggest third-quarter gain in 13 years.
Brent crude, the global benchmark, settled down 67 cents or 1.2 percent to $56.12 a barrel. It had notched a third-quarter gain of about 20 percent, the biggest increase for that quarter since 2004, and traded as high as $59.49 last week.
U.S. crude closed down $1.09 or 2.1 percent to $50.58. The U.S. benchmark posted its strongest quarterly gain since the second quarter of 2016.
· Iraq announced its exports rose slightly in September while a Reuters survey showed OPEC overall boosted output. [OPEC/M]
· U.S. drillers added six oil rigs in the week to Sept. 29, bringing the total count to 750, data from General Electric Co’s Baker Hughes energy services firm showed on Friday.
· A retiree armed with multiple assault rifles strafed an outdoor country music festival in Las Vegas from a high-rise hotel window on Sunday, slaughtering at least 59 people in the deadliest mass shooting in modern U.S. history before killing himself.
More than 525 people were injured - some by gunfire or shrapnel, some trampled - in the pandemonium adjacent to the Las Vegas Strip as police scrambled to locate the assailant.
Police identified the gunman as Stephen Paddock, 64, who lived in a retirement community in Mesquite, Nevada. They said they believed he acted alone and did not know why he attacked the crowd.
The Islamic State militant group claimed responsibility for the massacre, but U.S. officials said there was no evidence of that.
Reference: Reuters, CNBC, Bloomberg
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