- US CPI rises 0.4% in August, core up 0.1%; Headline rate firmer, core as expected
- US current account deficit falls to $98.8 bln; Slightly higher than expected; smallest deficit since 1991 as a percentage of GDP; smallest in dollar terms since 2001
- TIC data: official inflows slow, private outflows accelerate; Figures looks scary, but see this article for how difficult the data is to interpret accurately. What you see is not what you get…
- US industrial production rises 0.8%, capacity use at 69.6
- Medley Global Advisers: Some on FOMC getting anxious to hike
- Japanese FinMin Fujii: Intervention stance unchanged; won’t weaken JPY for exporters
- NAHB builder sentiment survey rises to 19 from 18
- Obama: No budding trade war with Canada
- S&P 500 closes at fresh one-year high of 1068.75, 1.5%
- CRB index rises 1.8%, gold ends at $1018; touches $1020 intraday.
- US 10-year notes rise in yield on Medley report. Close at 3.47% from 3.39% intraday lows.
EUR/USD added modestly to gains made in Europe this morning but recovered from a mid-morning swoon as talk of a Fed hike (that’s right, a hike!) made the rounds this morning and caught the market completely off-guard. EUR/USD dropped to 1.4645 as the talk, spurred by a report from Medley Advisers, first made the rounds. Once things were put in perspective, ( a hike is not imminent even if a few hawks are ready to tighten at the first opportunity), EUR/USD made up its lost ground. As equities forged higher during the afternoon, EUR/USD followed suit and made a new high above the 1.4720 level. Highs of 1.4736 were recorded and the market ends the day near its highs.
AUD was a near-identical image of EUR/USD rising to fresh trend highs of 0.8749 late in the day after an intraday pullback. Barriers are rumored at 0.8750 and 0.8800. 0.8810 is the near-term technical target.
EUR/GBP added to its recent rally amid expectations that the BOE will lower deposit rates next month. It reached 0.8932 while cable rallies were limited to the 1.6510 area during the US afternoon.
USD/JPY bounced from key support at 90.00/10 and set off a short-covering scramble in New York this morning. It reached 91.36, spurred in part bu a big back-up in Treasury yields before comments from Fuji that he maintains there is no reason to weaken the JPY just to boost exports. The dolar traded quietly near 90.90 most of the afternoon.
