- SNB buys USD/CHF, EUR/CHF, second month-end in a row
- PBOC’s Zhou: China has adopted “special Yuan policy” to deal with crisis; reforms to continue
- US consumer spending falls 0.5%; income flat; savings rate rises to 3.3%
- Canadian GDP falls 0.1% in August
- ECB’s Noyer: Currency fluctuations a concern for G7
- Chicago PMI rises to 54.2 in October from 46.1 in September
- Milwaukee PMI falls to 502 from 58; New York falls to 60.8 from 72.9
- University of Michigan consumer sentiment 70.6 in October from 73.5 in September
- Goldman Sachs forecasts nonfarm payrolls to fall 200,000 in October, more than consensus
- Citi may need to write-down $10 bln in tax-deferred assets
- Lisbon Treaty looks set for approval; Czechs won’t block
- S&P 500 falls 2.8%, Oil slides $2.90 to $77.00, Gold holds firm, at $1045
The dollar began to rebound late in the European morning after reports of SNB buying in USD/CHF helped give the dollar a lift, undermining the rebound in EUR/USD seen yesterday. The inability of the risk trade to rally in sustained fashion after a strong Chicago PMI figure helped undermine confidence and soon traders began to pick apart yesterday’s GDP data and pointed to the weak state of the consumer in today’s income and spending reports.Fears of further bank write downs helped send equities spiraling lower during the afternoon, keeping EUR/USD under pressure throughout the afternoon. Prices end the session close to 1.4698 uptrend support, the uptrend in place since last March.
JPY crosses were blasted at midday as risk appetites were severely trimmed via an uptick in volatility and fresh unwinding of risk trades, some just put back on during yesterday’s risk rebound. USD/JPY slumped to 89.93 while the crosses were even more heavily hit. EUR/JPY fell over 5.5 JPY on the day, AUD/JPY was obliterated, more than 2 JPY top to bottom, closing near 87.70. GBP/JPY fell to 147.70 from 151.70, dragging cable down to 1.6420 from above 1.6600 Thursday afternoon.
AUD/USD slumped below 0.9000 in New York afternoon with cross sales a major factor. USD/CAD rebounded to 1.0838.
Month-end illiquidity exacerbated moves today but risk appetites will likely remain subdued come Monday after very whippy price action in recent sessions. As noted earlier, markets are said to be the choppiest at tops and bottoms. so we may be seeing dollar bottom and equity top forming for the medium-term.
Have a great Halloween, all. More treats than tricks, I hope.
