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Minutes of the Sep 19-20 FOMC meeting released last night showed that Fed policymakers agree with policy remaining restrictive for some time. The minutes showed that the committee was more cautious in its outlook than the Summary of Economic Projection suggested. In the FOMC’s upward revisions, the committee was confident that the US economy could achieve a soft landing, whereas the minutes reveal that the Fed is cautious with abroad range of risks that can arise. - All eyes on US CPI due today. Economists expect it to show further easing and if that’s consistent it can support the case for the Fed to be done with rate hikes, lifting US Treasuries, pulling US yields lower along with the USD. But prepare for the upside too as we have seen a few data surprises last week, and as seen on yesterday’s PPI reports, gasoline prices have crept up.
- The US Dollar is weaker across the board as investors wait for the print later today.
ECB minutes are due today and investors will lookout for any clues on the future of the central bank’s monetary policy, and if any tightening is expected ahead.- EUR/USD has picked up the last two days and I can’t help to think this move will be short-lived, specially as we reach an area with a few options strikes from 1.0625 to 1.0635, which will likely be defended.
The UK economy has expanded by 0.2% in August but when revised alongside past months, it will be hard for the economy not to contract in the third quarte- Cable is higher today, touching 1.2330 on GDP data but it will likely trade in a narrow range until we get the US print out later today.
USD/JPY trades around 149 and it is little changed since yesterday.
A state wealth fund in China stepped in to support the stock market, boosting sentiment and driving China’s Government Bond yields to their highest level since May. USD/CNH is muted at 7.2984 and USD/CNY at 7.2993.
Oil prices fell for a third- consecutive day, correcting most of the surge related to the Israel – Hamas conflict.
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