- US Q2 2023 final GDP +2.1% vs +2.1% expected
- US initial jobless claims 204K vs 214K estimate
- US pending home sales for August -7.1% versus -0.8% expected
- Fed's Barkin: Lost data due to government shutdown would complicate understanding econ
- No comments on monetary policy in Powell's initial remarks
- US sells 7-year notes at 4.673% vs 4.670% WI
- Feds Goolsbee: Fed will return inflation to target, and can do it without a recession
- More Goolsbee:If the Fed sees lack of progress on the price side, it will have to tighten
- KC Fed manufacturing index -8 vs -2 prior
- EIA weekly US natural gas storage bcf+90 bcf vs +88 bcf expected
- Biden administration 5-year off shore oil plan does not include any lease sales for 2024
- Germany September preliminary CPI +4.5% vs +4.6% y/y expected
Markets:
- Gold down $8 to $1866
- WTI crude oil down $1.96 to $91.72
- US 10-year yields down 4.9 bps to 4.58%
- S&P 500 up 0.6%
- AUD leads, USD lags
Thursday was a reversal of the recent price action in markets but there wasn't a particular catalyst. To be sure, the consumer spending data in Q2 GDP and pending homes were weak but my suspicions are on the looming turn of the calendar as the driver of price action on Thursday.
Bonds finally caught a bid after Europe went offline and that turned everything around. Stocks rose and the US dollar sold off. Even oil reversed its recent bulletproof record with a $2 decline.
The moves were largely uniform with the dollar falling around 0.6% but AUD/USD was particularly strong as it got some torque from risk appetite and perhaps some short covering. The loonie slide broadly alongside the US dollar as oil faded.
Yesterday was the T+2 deadline for Q3 books and so that might have been a culprit for the price action, or it could be some bottom fishing. As for the US dollar, it will have bigger issues to deal with in the day ahead with the looming PCE report and the rising probability of a government shutdown (and data blackout).
