October Market Overview
$Us Dollar: October started with improved ISM Manufacturing and Non-Manufacturing PMI, and Unemployment Claims. Average Hourly Earnings m/m came as expected. ADP Non-Farm Employment Change and Non-Farm Employment Change came well below expectations as did Unemployment Rate. Most FOMC officials agreed to keep interest rates on hold, but general direction appears to be towards hiking next month. Mid-Month saw improved Unemployment Claims, Core Retail Sales m/m and PPI m/m, while Retail Sales m/m came as expected. Better than expected Crude Oil Inventories were followed by disappointing Preliminary UoM Consumer Sentiment. CPI m/m came as expected, Core CPI m/m came below expectations. Building Permits and Filly Fed Manufacturing Index were very much in positive territory while Unemployment Claims was disappointing. End of the month saw disappointing CB Consumer Confidence; Core Durable Goods Orders m/m came as expected while Unemployment Claims improved. Advanced GDP q/q came above expectations.
CNY: The month started with slightly reduced Manufacturing PMI. Trade Balance was well below expectations as was Industrial Production y/y. GDP q/y came as expected.
EurUsd: ECB kept interest rates at 0% in line with expectations. German’s Ifo Business Climate came much improved. President Draghi reiterated that ECB monetary policy had maintained price stability and stressed the need for structural reforms.
EurUsd descended some 390 Pips to 8 month low of 1.0849 ending the month on the re-bounce.
GbpUsd: The month started with improved Manufacturing PMI, Construction PMI, and Services PMI, followed by disappointing Manufacturing Production m/m. Mid-month saw CPI at 1.0% which was above expectations, as was Claimant Count Change. Average Earnings Index 3m/y came unchanged while Retail Sales were disappointing. The month ended with Preliminary GDP q/q well above expectations.
GDPUSD descended some 1028 Pips to a new all-time low of 1.1953. Now dancing on 1.2100 level.
AudUsd: The month started with disappointing Private Capital Expenditure, Retail Sales and GDP q/q. RBA kept Cash Rate at 1.5% as expected. Retail Sales came above expectations as did Trade Balance. The second half of the month saw Employment Change well below expectations while Unemployment Rate reduced to 5.6%.
AudUsd continues it’s choppy ride bouncing off 0.7727 monthly horizontal and the weekly trendline
Week ahead in the News
USD: FOMC Statement and Federal Reserve Rate, ADP Non-Farm Employment Change and Non-Farm Employment Change, ISM Manufacturing and Non-Manufacturing PMI, Unemployment Claims and Unemployment Rate, Average Hourly Earnings m/m, Crude Oil Inventories.
CNY: Manufacturing PMI, Caixin Manufacturing PMI; GBP: Manufacturing, Construction and Services PMI,BOE Inflation Report, MPC Official Bank Rate Votes, Monetary Policy Summary and Official Bank Rate; AUD: Building Approvals, Cash Rate, Retail sales m/m and Trade Balance; CAD: Unemployment Rate, GDP m/m, BOC Rate Statement. JPY: BOJ Outlook Report, BOJ Policy Rate, BOJ Monetary Policy Statement.