- UMich September US prelim consumer sentiment 59.5 vs 60.0 expected
- Putin says main goal is to liberate Donbas region and 'we are not in a hurry'
- CNN: China's Xi has told military he wants China to have capability to take Taiwan by 2027
- UK planning to cut business energy rates in half
- The Bakers Hughes oil rigs move up 8 in the current week
- Canadian July wholesale trade -0.6% vs -0.6% expected
- Saudi Arabia and Russia see $100 as a fair price for oil - report
- Canada August housing starts 267.4K vs 265.0K expected
- Eurozone Core CPI Final MoM (Aug) Act: 0.7% Prev: 0.2% Fcst: 0.6%
- U.K. Retail Sales U.K. Retail Sales MoM (Aug) Act: -1.6% Prev: 0.3% Fcst: -0.5%
Markets:
- WTI crude oil up $0.21 to $85.30
- US 10-year yields down 1 bps to 3.45%
- Gold up $10 to $1673
- S&P 500 down 28 points to 3873, or 0.7% -- down 4.8% on the week
- NZD leads, GBP lags
It could have been worse.
The FedEx warning late yesterday boosted the dollar and weighed heavily on equity futures. In the end, the decline in the S&P 500 was only about half of the worst levels. The commodity currencies in particular showed some late life and that ensured AUD/USD closed above some critical levels after touching a two-year low in early European trade.
The euro caught a bid into the London fix. It later gave about half of that move back but ultimately finished 10 pips higher with some late-day bids on improving equities.
The simmering catalyst was a dip in inflation expectations in the UMich survey. Both 1 year and 5-10 year inflation moved lower month-to-month and led to a small bid in bonds. It also led to a drift lower in 100 bps Fed hike odds from 25% to 17%.
Cable ended the day as the worst peformer but it made up some ground in US trade as it rose to 1.1423 from a low of 1.1351. The catalyst was a soft retail sales report. Late in the day we also learned the businesses will be getting their power bills cut in half. The question is: Was the market expecting more help on energy?
USD/JPY remains a focus with the threat of intervention looming. The pair formed something of a double top at 143.75 today and drifted lower to finish near the lows at 142.94. That's still a gain on the week but the 145.00 level is looking like a tough one to crack and that's five straight weeks of gains.
Have a wonderful weekend. Next week is Fed week.
