Dollar Mixed Ahead of FOMC Statement

October 28, 2015

The dollar is down 0.3% against the euro and loonie and 0.1% relative to the yen, but the U.S. currency has also risen by 0.7% against the Aussie dollar, 0.5% vis-a-vis the kiwi and 0.1% against the yuan.  Sterling is steady.

Japan’s Nikkei rose 0.7% but elsewhere in the Pacific Rim stocks dropped by 1.9% in China, 1.4% in Indonesia, 0.8% in India and 1.1% in Hong Kong.  European share prices are higher as Sweden boosted quantitative stimulus.

Gold and oil rose overnight by 0.5% and 0.7%.

The 10-year British gilt yield rose 2 basis points.  German bunds are unchanged.  The Japanese JGB is down 1 bp.

The Swedish Riksbank retained a -0.35% negative repo rate but lifted its intended bond purchases to SEK 200 billion from SEK 135 billion and released a new assessment that envisages a slower upward path in inflation and the repo rate.  The central bank will continue to intervene at times and promises more stimulus if necessary in the future.

Australian CPI inflation slowed last quarter and was lower than forecast.  The CPI rose 0.5% on quarter and 1.5% on year.  Core inflation slowed to 2.1-2.2%.

German import prices fell 0.7% in September and recorded a 12-month drop of 4.0% versus a decline of 3.1% in the year to August.  Non-energy import prices fell 0.6% on month and posted a lower 12-month rise of 0.7%.  Energy plunged 31.9% on year.  Export prices fell 0.3% on month and edged only 0.3% higher on year.

German consumer confidence dipped 0.2 points to 9.4 in November, lowest since January.

Chinese consumer sentiment slumped to 109.7 in October following readings of 118.2 in September and 116.5 in August.

After printing at a 95-month high of 97 in September, French consumer confidence slid a point in October.

Italian consumer confidence rose 0.9 in October to 116.9.  Manufacturing sentiment also improved.

Small business sentiment in Japan fell 0.3 to a 4-month low of 48.7 in October.  It’s been below the 50 threshold all year.

Retail sales slipped 0.3% in Norway between September 2014 and a year later, but such increased 8.6% in that span in Ireland.

Attention now turns to the FOMC statement due at 18:00 GMT.  Reaction may be muted pending Thursday’s release of the first estimate of U.S. third-quarter GDP.  Growth is expected to be less than half as strong in 3Q as the 3.9% pace in 2Q.

Copyright 2015, Larry Greenberg.  All rights reserved.  No secondary distribution without express permission.

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