I. Yesterday’s News

1. Hillary Clinton's supporters nervously eyed opinion polls showing the Democrat with a tenuous lead over Republican rival Donald Trump on Thursday. Clinton was leading Trump by 6 percentage points, a Reuters/Ipsos poll found on Wednesday. Other polls have shown a far closer race, fuelling Democratic worries about the state of the race just five days before Tuesday's election. Clinton's national lead over Trump eroded to 3 percentage points among likely voters in a New York Times/CBS News poll on Thursday, down from 9 points just two weeks ago. An average of polls compiled by the RealClearPolitics website also showed her lead at 1.7 percentage points on Thursday, well down from the solid advantage she had until late last month.

2. The Bank of England scrapped its plan to cut interest rates, which it said could now move up or down, and raised its forecasts for 2017 growth and inflation sharply due to the slide in sterling since Britain's vote to leave the EU. The BoE's nine policymakers all voted to keep rates on hold, in line with a Reuters poll of economists. There was also unanimous support to stick with August's bond-buying plans. In a set of forecasts on Thursday, it largely reversed its previous prediction of a major hit to growth next year which it now saw at 1.4 percent, up from an estimate of 0.8 percent made in August. That represented its biggest ever growth upgrade. Inflation would jump to 2.7 percent this time next year, nearly triple its current level. But it warned that Britain's access to EU markets could be "materially reduced", which would hurt growth over "a protracted period" and forecast a slower recovery for 2018 and 2019. Sterling rose further and British government bond prices fell after the BoE announcement.

3. A British court ruled on Thursday that the government needs parliamentary approval to start the process of leaving the European Union, potentially delaying Prime Minister Theresa May's Brexit plans. The government said it would appeal against the High Court ruling and Britain's Supreme Court is expected to consider the case early next month. A spokeswoman for May said the prime minister still planned to launch talks on the terms of Brexit by the end of March and added: "We have no intention of letting this derail our timetable." The pound rose after the ruling.

4. The sharpest one-month build-up of inflation pressures in at least 20 years accompanied another growth spurt by British services firms in October, according to a survey. This has dimmed the chance of a Bank of England (BoE) interest rate cut on Thursday. The Markit/CIPS UK Services Purchasing Managers Index (PMI) rose to 54.5 in October, marking its highest level since January and topping all forecasts in a Reuters poll. The PMI's gauge of cost pressures faced by services companies staged its largest jump since the survey started in 1996 and hit its highest level in 5-1/2 years.

5. U.S. services industry activity cooled in October amid a slowdown in new orders and hiring, suggesting a moderation in economic growth early in the fourth quarter. Other data on Thursday showed planned job cuts by U.S.-based employers dropped 31 percent to a five-month low last month. That underscored the labor market's healthy fundamentals, though more Americans filed for unemployment benefits last week. The ISM service index fell more than expected to 54.8 in October from 57.1 a month earlier, according to data from the Institute for Supply Management on Thursday. A reading above 50 indicates expansion in the services sector. The ISM  non-manufacturing index dropped to 54.8, worse than expected. A separate report showed U.S. factory orders rose 0.3 percent in September, better than economists’ forecast of 0.2 percent. The preliminary Services PMI Index came in at 54.8, the highest since November 2015. Nonfarm productivity rose at a 3.1 percent annual rate, compared with market consensus of a 2.0 percent growth. Initial claims for state unemployment benefits increased to a seasonally adjusted 265,000, higher than economists’ estimates of 258,000.

6. The euro zone economy should continue to expand at a moderate and steady pace but this outlook is subject to downside risks, primarily from sluggish global growth and political uncertainty, the European Central Bank said on Thursday. Euro zone unemployment was 10.0 percent in September, in line with expectations.

II. Market Overview
FX

The dollar index, which measures the greenback against a basket of six major rivals, was last down 0.24 percent at 97.163, not far from a more than three-week low of 97.041 also touched Thursday. The euro was last up 0.14 percent against the dollar at $1.1110, hovering near a session high of $1.1126 touched in early trading, which was the highest since Oct. 11. The dollar was last down 0.37 percent against the yen at 102.91 yen, not far from a one-month low of 102.56 yen touched early Thursday. The Mexican peso traded up more than 1 percent at 19.1610 pesos against the U.S. dollar, putting it on course for its best day in more than two weeks.

Precious Metals

Gold edged higher on Thursday in response to a lower dollar and also uncertainty about the outcome of a tight U.S. presidential race. Spot gold closed at $1,303.25 an ounce. U.S. gold futures settled down 0.4 percent at $1,303.30 per ounce. Among other precious metals, silver fell 0.7 percent at $18.32 an ounce. Platinum was up at $992.99 and palladium dropped almost 2 percent at $616.00.

Commodities
1.Crude Oil

Oil prices settled down more than 1 percent on Thursday as investors reeled from a record weekly surge in U.S. crude inventories, and remained skeptical about whether OPEC can actually implement its planned output cap. U.S. crude fell 68 cents, or 1.5 percent, to settle at $44.66 per barrel. Brent crude was down 51 cents, or 1.1 percent, at $46.35 a barrel.

2. Base Metals

Zinc prices climbed to their highest level in more than five years on Thursday, supported by a weaker dollar and buying from computer-driven speculative funds that also helped copper to a three-month high. Benchmark zinc on the London Metal Exchange closed at $2,487 a tonne, up 2.5 percent. Among other metals, LME copper gained 0.8 percent to $4,958 a tonne. Nickel rose 1.5 percent to close at $10,480 while aluminium firmed 0.3 percent to $1,731. Tin finished with a 1.6 percent gain at $21,105. Lead was up 1.8 percent at $2,092.

U.S. Treasuries

Longer-dated U.S. Treasury prices fell on Thursday after the Bank of England indicated that inflation is likely to rise further, while uncertainty over next week's U.S. Presidential election propped up shorter-dated debt. Benchmark 10-year notes ended down 5/32 in price to yield 1.82 percent. The yield curve between five-year notes and 30-year bonds steepened to 134 basis points on Thursday, the steepest since June 27. The curve between two-year notes and 10-year notes also steepened to as much as 101 basis points, the largest yield gap since May 12.

Stock Market
1. U.S. Equities

The S&P 500 fell for an eighth straight session on Thursday, its longest losing streak since the 2008 financial crisis, as Facebook shares weighed and investors grappled with uncertainty over next week's U.S. presidential election. Facebook shares tumbled 5.7 percent as the world's largest online social media network warned that revenue growth would slow this quarter. The stock was the biggest drag on the S&P 500 as well as on the tech-heavy Nasdaq, which also posted its eighth straight day of losses. The S&P 500 lost 9.28 points, or 0.44 percent, to 2,088.66 and the Nasdaq Composite dropped 47.16 points, or 0.92 percent, to 5,058.41. The Dow Jones industrial average fell 28.97 points, or 0.16 percent, to 17,930.67. The CBOE Volatility Index, a gauge of near-term investor anxiety, climbed 14 percent to its highest level in more than four months.

2. Hong Kong Equities

Hong Kong stocks closed at a 2-1/2-month low on Thursday, as worries over the tightening U.S. presidential election race outweighed optimism generated by an upbeat China service sector survey. The Hang Seng index fell 0.6 percent to 22,683.51 points, while the China Enterprises Index lost 0.4 percent to 9,482.01. Hang Seng's close is the lowest since Aug. 11.