Friday was mostly a fairly rangebound session, with dollar recovering a small amount of its lost ground of the week, while stocks were also steady/mixed, albeit at marginal new all-time highs for a brief period of the session. Bonds were quiet, while the metals fell – but later recovered, and WTI was its usual choppy self but eventually settled higher into the weekend, as traders noted signs of tightening US output. Sentiment was soured in part though by a report suggesting that major oil producers were ready to discuss plans to ramp up output, meaning that WTI finished well off its high of 71.77, at 70.80.
The exception to the rangebound rule in the FX market was Sterling, which collapsed after UK PM Theresa May said that the EU needs to supply an alternative Brexit proposal, after the bloc’s leaders had rejected her plans without explaining why. Negotiations remain at an impasse and Sterling fell over 200 points on the back of the statement.
The coming week will start relatively quietly, with nothing to come from Asia, and then just the German IFO Business Climate/Expectations from the EU and the Dallas Fed Mfg Business Climate from the US.
Looking ahead, Tuesday will kick off with the BOJ Minutes and a speech from the Governor, Kuroda, while Europe will have very little ahead of the US session which will feature the Case Shiller House Price Index, the July House Price Index and the Richmond Fed Mfg Index. Things warm up on Wednesday, beginning with the NZ August Trade Balance, but with the main event of the week coming in the US session with the FOMC Meeting, at which a hike is fully priced in, but the market will be playing closer attention to Jerome Powell’s statement and his take on the likelihood of a December hike. A couple of hours later, early Thursday, the RBNZ Interest Rate Decision will be delivered with no change expected and the focus, once again will be on the Press Conference. Thursday is going to be busy right the way through. The EU Economic Bulletin will be delivered along with the Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, for September. From German we get the Preliminary CPI/HICP for September, while the US will be a big session featuring the Q2 GDP/PCE, Durable Goods Orders, Pending Home Sales, Goods Trade Balance, Jobless Claims, and Wholesale Inventories. and Kansas Fed Mfg Activity for September. Finally, Friday will begin with the plenty from Japan; the Tokyo CPI for September and Unemployment, Retail Trade, Housing Start and Construction Orders, all for August. Australia will have the Private Sector Credit. Europe will be busy too, with the UK Q2 GDP, EU CPI (Sept) and German Unemployment (Sept), while the US will have the PCE Index, Chicago Purchasing Managers Index and Michigan Consumer Sentiment Index. Have a good week.
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