Forex - US North American Summary and Highlights 9 Oct


 20:05 (GMT) 09 Oct

  [Forex Highlights]

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Overview

US North American Summary and Highlights 9 Oct (0101-PMYY-C03)

Trade optimism corrected on suggestions China was still interested in a partial deal, lifting equities and UST yields. Brexit optimism saw a brief spike and a quick reversal. FOMC minutes had little impact.

News highlights

- FOMC minutes show economic baseline little changed but more concern over risks.

- US Aug wholesale inventories +0.2% vs 0.4% exp, sales 0.0%.

- US Aug job openings 7.051m from 7.174m in Jul and 7.25m exp.

Currencies:

US North American Summary and Highlights 9 Oct (0101-PMYY-C04)

The European morning saw a GBP bounce on a Times story indicating that the EU were ready to allow the Northern Ireland assembly to decide on whether to stay within the backstop provisions, but soon reversed as the DUP indicated the deal was unacceptable and the EU Commission denied they had made any such concession.

EUR/USD advanced to 1.0989 helped by a better European equity performance, and USD/JPY pushed above 107.50 as US equities advanced. There was little response to the FOMC minutes but a modest late dip in USD/JPY came on a Reuters report that China's expectations for progress had been hurt by the blacklisting of their firms. The more positive risk tone saw EUR/CHF reverse Tuesday's losses.

US North American Summary and Highlights 9 Oct (0101-PMYY-C01)

Commodity currencies were softer, oil gains failing to hold despite Turkey's troop incision into Syria.

EUR/SEK moved to new 10 year highs above 10.90 helped by evidence of easing in market expectations of inflation.

Bonds:

US North American Summary and Highlights 9 Oct (0101-PMYY-C02)

USTs retained an early curve steepening lean after Powell flagged up Tbill buying for organic reserves growth on Tues and into long end supply. Sources reports that China still open to a partial deal this week also initially weighed. Late concession into 10yr auction, block T.note sale, adds to long end losses, before decent results secured. FOMC minutes got little reaction, but with the auction results helped to ease steepening pressure. 2s +4.8bps @ 1.47%, 5s +5.2bps @ 1.40%, 10s +5.5bps @ 1.58%, 30s +5.1bps @ 2.08%.

Agency Spreads: Freddie/Fannie 5s +0.5/+0.2 bps, 10s 0.0/-1.2 bps.

Swap Spreads: 2s +0.23bps, 5s +0.55bps, 10s +0.24bps.

Equities

Equities remain sensitive to trade sentiment, reports suggesting China was still open to a partial deal, such as buying more US farm products in return for no fresh tariff hikes bringing a partial reversal of Tuesday's slide. A late correction came on a less positive report on China's expectations.

Still to come -

Data

00:30 GMT - AU: Home Loans (Aug) % m/m (Prev: 4.2)

04:30 GMT - NL: Manufacturing Production (Aug) % m/m (Prev: 0.5)

04:30 GMT - NL: Manufacturing Production (Aug) % y/y (Prev: -0.2)

06:00 GMT - DE: Trade Balance (Aug) EUR bn (Prev: 21.4)

06:00 GMT - DE: Current Account (nsa) (Aug) EUR bn (Prev: 22.1)

06:00 GMT - NO: CPI Core (Sep) % m/m (Prev: -0.6)

06:00 GMT - NO: CPI (Sep) % m/m (Prev: -0.7)

06:00 GMT - NO: CPI (Sep) % y/y (Prev: 1.6)

06:00 GMT - NO: CPI Core (Sep) % y/y (Prev: 2.1)

06:45 GMT - FR: Manufacturing Production (Aug) % m/m (Prev: 0.3)

06:45 GMT - FR: Manufacturing Production (Aug) % y/y (Prev: -0.3)

07:30 GMT - SE: CPI (Sep) % y/y (Prev: 1.4)

07:30 GMT - SE: CPIF (Underlying) (Sep) % y/y (Prev: 1.3)

08:30 GMT - UK: Index of Services (Aug) % 3m/3m (Prev: 0.2)

08:30 GMT - UK: Index of Services (Aug) % m/m (Prev: 0.3)

08:30 GMT - UK: Industrial Production (Aug) % m/m (Prev: 0.1)

08:30 GMT - UK: Manufacturing Production (Aug) % m/m (Prev: 0.3)

08:30 GMT - UK: GDP (Aug) % m/m (Prev: 0.3)

08:30 GMT - UK: Construction Output (sa) (Aug) % m/m (Prev: 0.5)

08:30 GMT - UK: Construction Output (sa) (Aug) % y/y (Prev: 0.3)

08:30 GMT - UK: Industrial Production (Aug) % y/y (Prev: -0.9)

08:30 GMT - UK: Manufacturing Production (Aug) % y/y (Prev: -0.6)

08:30 GMT - UK: Trade Balance (Non-EU) (Aug) GBP bn (Prev: -1.932)

08:30 GMT - UK: Visible Trade Balance (Aug) GBP bn (Prev: -9.144)

09:00 GMT - GR: Unemployment (Jul) % (Prev: 17)

09:00 GMT - GR: HICP (Sep) % y/y (Prev: 0.1)

10:00 GMT - PT: HICP (Sep F) % m/m (Prev: -0.1)

10:00 GMT - PT: HICP (Sep F) % y/y (Prev: -0.3)

12:30 GMT - CA: House Price Index (Aug) % (Mkt -0.1 Prev: -0.1)

12:30 GMT - US: Initial Claims (Oct 5) k (Mkt 220 Prev: 219)

12:30 GMT - US: CPI (ex Food & Energy) (Sep) 4cast: 0.1% m/m (Mkt: 0.2 Prev: 0.3)

12:30 GMT - US: CPI (Sep) 4cast: 0.2% m/m (Mkt: 0.1 Prev: 0.1)

21:30 GMT - NZ: Business NZ Manufacturing PMI (Sep) points (Prev: 48.4)

Events

00:00 GMT - JP: BoJ's Amamiya speaks

11:30 GMT - EU: ECB accounts of September Policy meeting

17:00 GMT - US: 30 year Bonds Reopening (USD 16bn)

21:30 GMT - US: Fed's Mester speaks at John Carroll University


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