The US ISM manufacturing index hit a five-month high in October, rising from 54.4 to 56.9. Economists had tipped a weaker reading of 54.0. US construction spending rose by 0.5pct in September, above forecasts centred on a 0.5pct fall. US personal income fell 0.1pct in September while spending rose by 0.2pct. Both results were slightly weaker than expectations. The core price index was 1.2pct up on a year ago, the slowest growth in nine years.

European shares posted modest gains on Monday with investors encouraged by stronger manufacturing activity in China and the US. But investors kept their powder dry ahead of the US mid-term elections and Federal Reserve meeting. The FTSEurofirst index rose by 0.1pct, with the UK FTSE up 0.3pct and the German Dax edged 0.1pct higher.

US sharemarkets ended flat on Monday as traders squared positions ahead of key events over the week. The earnings season is drawing to a close and so far 70pct of firms have reported their latest results. To date, 77pct of earnings results have beaten forecasts, with aggregate earnings 30pct higher than a year ago. General Motors is also rumoured to release terms of its initial public offering on Tuesday. The Dow Jones rose by 6pts or 0.1pct with the S&P 500 up 0.1pct and the Nasdaq was lower by 2.5pts or 0.1pct.

US treasuries were little-changed on Monday. Longer-term yields lifted modestly in response to better-than-expected manufacturing data. US 2yr yields were steady at 0.34pct and US 10yr yields rose by 2pts to 2.63pct.

The US dollar clawed back some of Friday´s losses in the European and US sessions on Monday. The Euro eased from highs of US$1.4010 to US$1.3865, ending US trade near US$1.3885. The Aussie dollar eased from US99.10c to US98.35c before ending US trade at US98.55c. And the Japanese yen eased from its strongest levels around 80.30 yen per US dollar to JPY80.75, ending US trade near JPY80.60.

US crude oil prices rose on Monday after the Saudi Arabian oil minister said that an oil price between US$70-90 a barrel was comfortable for consumers: ´´Consumers are looking for oil prices around $70, but hopefully less than $90.´´ The Nymex crude oil contract rose by US$1.52 or 1.9pct to US$82.95. Oil traded between US$81.32 to US$83.86 a barrel.

Base metal prices posted modest gains on the London Metal Exchange on Monday with metals up between 0.7-1.2pct. But the gold price eased, reversing some of Friday´s solid gains. The Comex gold futures price fell by US$7.00 an ounce to US$1,350.60, after trading from US$1,349.10 to US$1,366.40.

Ahead: In Australia, the Reserve Bank Board meets. The CBA-ACCI Business Expectations survey is released. The MAP group and Western Australian Newspapers release quarterly results. In the US mid-term elections are held. The Federal Reserve begins a two-day meeting.

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