It has been a busy session on Thursday, led off by the Kiwi in early Europe, which tanked after the announcement of a Labour led coalition. The Kiwi is closing the NY day on its lows and looks as though there will be plenty of downside potential in the days to come. Elsewhere, the Yen and Swiss Franc rebounded strongly, with traders seeking a safe-haven after the Spanish Prime Minister, Rajoy, announced the intention to invoke the so called Article 155 of Constitution to suspend the autonomy of Catalonia. This announcement came after Catalan leader, Puigdemont, refused to withdraw the declaration of independence. The Euro initially spiked lower against all major currencies after the news but then quickly recovered against all but the Yen and Swiss Franc. The US$ has been generally under pressure due to softer US Treasury yields and is closing the day towards the bottom end of its range against most pairs, Kiwi and Cable excepted. In other markets, US stocks have taken a breather from their recent run higher but have recovered from a brief , sharp sell-off to end up trading sideways just below the all-time highs. The metals are a firm, and WTI a bit lower after data showed a larger than expected build-up of product inventories which continued to weigh on sentiment. Iron Ore was down around 3.5%, which may weigh on the Aud$ today. In terms of US data, the Philadelphia Fed said that its manufacturing index rose to 27.9 this month up from 23.8 in September, beating economists forecast of a reading of 22, while the initial jobless claims decreased 22,000 to a seasonally adjusted 222,000 for the week ended Oct. 13, beating forecasts of a 4,000 decrease.
Friday may see a quiet end to the week, with little data to trade off although Donald Trump will be meeting Janet Yellen at some stage to discuss the upcoming vacancy at the Fed. The NZ Visitor Arrivals will be the only point of focus in Asia, while Europe will be equally thin the just the German PPI, EU Current Account and the UK PSNBR in focus. The US will not add much to the equation either, with just the Existing Home Sales and a speech from the Fed’s Mester on the cards. After the close of play though, Janet Yellen will be speaking which may set up for an interesting open on Monday.
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