Asia

China’s Factory Activity Picks Up. China’s manufacturing sector unexpectedly picked up some momentum this month even as factory employment slumped to a 5½-year low, a potential source of worry for Communist leaders who prize social stability above all else. Signs of a weakening labour market reinforced expectations that China would further relax financing conditions in the coming weeks, but stop short of cutting interest rates or loosening the reserve requirement for all banks to support the economy. The HSBC/Markit Flash China Purchasing Managers’ Index (PMI) rose to 50.5 this month from Augusts’ final reading of 50.2, slightly above the 50-mark separating expansion from contraction, which had been expected by economists in a Reuters poll. (Reuters)

China's Trade Minister Concerned About Falling Japanese Investment: Business Delegates. China's trade minister is worried about Japan's falling levels of direct investment in his country, Japanese business officials who met him said on Tuesday, against a backdrop of strained ties between the world's second- and third-biggest economies. Japan's direct investment in China fell nearly a fifth in 2013, and dropped another 40% to 300.8b yen ($2.8b) during the first half of 2014 from a year earlier. The delegates, who spoke to reporters after meeting Trade Minister Gao Hucheng, were among some 200 Japanese business association officials led by Toyota Motor Corp.'s honorary chairman, Fujio Cho. (Reuters)

Americas

Sturdy U.S. Factory, Services Data Bolster Growth Picture. U.S. manufacturing activity hovered at a near 4-1/2-year high in September and factory employment surged, supporting views of sturdy economic growth this quarter. Financial data firm Markit said its preliminary or "flash" factory purchasing managers index came in at 57.9, unchanged from August when it touched its highest level since April 2010. Any reading above 50 signals expansion in manufacturing, which accounts for about 12% of U.S. economic activity. Factory jobs rose for a second straight month, Markit said, with a gauge of labor market conditions touching its highest level since March 2012. A measure of new orders held steady above the 60 level for the third time in the past four months, indicating persistent demand for manufactured goods. (Reuters)

U.S. Business Borrowing For Equipment Rises In August: ELFA. U.S. companies' borrowing to spend on capital investment rose in August, the Equipment Leasing and Finance Association (ELFA) said. Companies signed up for $7.2b in new loans, leases and lines of credit last month, up 13% from a year earlier. Borrowing fell 9% from July. "Continued strength in new business volume reflects the uptick in overall economic activity most economists forecast for the second half of 2014," ELFA Chief Executive William Sutton said in a statement. (Reuters)

Argentina's August Trade Surplus Jumps; Masks Export Slump. Argentina's trade surplus leapt 145% in August from the same month a year earlier to $899 million, though a 12% fall in exports highlighted the ailing health of Latin America's third biggest economy which is in recession. Imports fell 20% to $5.7b as the government tightened trade controls to defend its dwindling hard currency reserves after it defaulted on its debt again in late July and consumer demand weakened. The surplus exceeded market expectations. The median forecast of 10 analysts polled by Reuters was for a surplus of $575 million. Projections ranged from $331 million to $850 million. (Reuters)

Europe

Eurozone Business Growth Slows In September, PMI Survey Finds. Eurozone business growth cooled in September for a second consecutive month, dropping to its slowest pace since December, a survey suggests. The latest Markit Composite Purchasing Managers' Index (PMI) fell to 52.3 from August's 52.5. A reading above 50 indicates growth. Modest growth in Europe's biggest economy, Germany, provided some cheer, but the eurozone was brought down by stagnation elsewhere, particularly in France, where PMI fell to 49.1. Manufacturing across the eurozone fared worse than the service sector, with the PMI reading falling to 50.5, the lowest measure since July of last year. (BBC)

German Private Sector Expands In September, Points To Moderate Third Quarter Growth – PMI. Germany's private sector grew for the 17th month running in September, a survey showed on Tuesday, suggesting Europe's largest economy has expanded in the third quarter after a surprise contraction in the second. Markit's flash composite Purchasing Managers' Index (PMI), which tracks the manufacturing and service sectors that make up more than two-thirds of the economy, rose to 54.0 from 53.7 in August, moving further above the 50 mark denoting growth. (Reuters)

UK Public Borrowing At £11.6bn In August. Government borrowing remained high in August, hampering the chancellor's efforts to reduce the public deficit, official figures show. The Office for National Statistics (ONS) said public sector net borrowing stood at £11.6bn last month. Total borrowing for this year stands at £45.4bn, some 6.2% higher than at the same time a year earlier. However, comparisons are difficult because of changes to the methodology this month. The latest figures are designed to meet EU standards and include financial sector interventions that were left out in the old figures. On the old basis, the figure would have been £12.5bn, up from £11.5bn in August 2013. (BBC)

Currencies

Euro Gets Lift From German Prospects; Dollar Dips. The battered euro rose on Tuesday, pulling away from a 14-month trough against the dollar, as the greenback eased against other major currencies on profit-taking after a 10-week streak of gains. The common currency rose to $1.2885, recovering from Monday's 14-month low of $1.2816 and prompting some traders to suspect it might correct higher. The euro's rise stung the dollar index, which shed 0.33%. The index last traded at 84.472, having peaked at 84.861 on Monday, a high not seen since July 2010. The dollar also eased 0.2% to 108.62 yen, down from a six-year high of 109.46 set on Friday. (Reuters)

Commodities

Brent Oil Falls As Glut Outweighs Mideast Turmoil; US Oil Up. Brent crude oil inched lower on Tuesday as ample global supplies outweighed tensions in the Middle East, while U.S. oil bounced higher after four sessions of losses. Brent for November delivery fell 12 cents to settle at $96.85 a barrel after climbing as high as $97.59 a barrel in early trading. It hit a two-year low of $96.21 last week. U.S. crude rose 69 cents to settle at $91.56 a barrel, rebounding from a session low of $90.58, which was its weakest since Sept. 11. Its discount to Brent narrowed to around $5.25 a barrel. (Reuters)

Gold Rally Fades After U.S. Strikes In Syria Spur Rise. Gold rose on Tuesday after the first U.S.-led airstrikes against Islamic State and other militants inside Syria, but early gains evaporated amid a lack of follow through buying. Spot gold was up 0.6% at $1,222.31 an ounce by 2:02 p.m. Silver rose 0.3% to $17.76 an ounce after slipping to a four-year low of $17.30 on Monday. Platinum was up 0.8% to $1,328.74 an ounce, and palladium gained 1.9% to $812.47 an ounce. (Reuters)