EQUITY TECHS: E-MINI S&P: (Z5) Holding On To Its Recent Gains

Canadian Manufacturing PMI rose in October to the highest since January, at 49.6 vs 47.7 prior (no consensus available).

• This comes after last week's GDP data release showing manufacturing remaining in deep contraction in August (-0.5% M/M for the 4th contraction
   in the last 6 months, now running at -5.6% 3M/3M SAAR) amid the US-Canada trade conflict.
• The S&P Global report notes that the latest PMI reading still marks a deterioration in manufacturing operating conditions, albeit at a slightly less-worse pace, reflecting "noticeably slower falls in both production and new orders compared to September. Production fell fractionally, whilst new orders were down to the weakest extent since January and only modestly. That said, panellists continued to report that market conditions were challenging, especially in relation to international trade and notably the neighbouring United States. Export sales subsequently fell again in October, albeit only modestly and to the weakest degree in nine months."
• Sentiment rose to the best since January though remained below-trend, while "uncertainty in the outlook led to a continued circumspect approach to staffing and purchasing decisions. Employment fell slightly as firms noted not replacing leavers, especially against a backdrop of excess plant capacity (backlogs of work again declined steeply over the month), whilst buying activity was cut to the steepest degree for three months. Instead, manufacturers signalled a preference for utilising input inventories, which in line with the trend since the start of the year, declined again in October."
• Input price inflation showed a "considerable increase" with manufacturers seeking to pass on higher costs to clients, with output price inflation picking up "noticeably" vs September's 11-month low.

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EXECUTIVE SUMMARY: 

• The Riksbank is almost certain to remain on hold at 1.75% on Wednesday, while reiterating that the policy rate “is expected to remain at this level for some time to come”.
• Since September, there have been several datapoints suggesting an economic recovery is underway, supported by accommodative monetary policy, an anticipated expansion of fiscal policy and declining trade policy uncertainty.
• However, we don't think these developments are enough to shift the Board from its clearly signalled path, particularly at an interim meeting with no updated MPR and rate path projection (only a concise Monetary Policy Update document will be presented).
• Soft signals from the Riksbank's Business Survey and a lack of improvement in hard labour market data should guard against the Board sending too hawkish a signal in November. 

• RES 4: 7000.00 Psychological round number 
• RES 3: 6993.12 3.500 proj of the Aug 20 - 28 - Sep 2 price swing
• RES 2: 6974.04 3.382 proj of the Aug 20 - 28 - Sep 2 price swing 
• RES 1: 6953.75 High Oct 30 
• PRICE: 6904.75 @ 14:27 GMT Nov 3
• SUP 1: 6812.25/6795.74 High Oct 9 / 20-day EMA
• SUP 2: 6690.58 50-day EMA 
• SUP 3: 6540.25 Low Oct 10 and a key short-term support 
• SUP 4: 6506.50 Low Sep 5

The trend condition in S&P E-Minis is unchanged, it remains bullish and the latest pullback appears corrective. The fresh cycle high last week confirms a resumption of the primary uptrend and maintains the bullish price sequence of higher highs and higher lows. Sights are on 6974.04 next, a Fibonacci projection point. Initial firm support to watch lies at 6795.74, the 20-day EMA. Key pivot support lies at 6690.58, the 50-day EMA.