The dollar index (DXY00) Friday fell by -0.08%. The dollar was under pressure Friday after the University of Michigan Sep consumer sentiment and inflation expectations reports fell more than expected, which is dovish for Fed policy. Also, hawkish ECB comments Friday boosted EUR/USD at the dollar’s expense. Higher T-note yields on Friday and a slump in stock limited losses in the dollar.
The U.S. import price index ex-petroleum was unchanged m/m for a second month, right on expectations.
The U.S. Sep Empire manufacturing survey general business conditions rose +20.9 to 1.9, stronger than expectations of -10.0.
U.S. Aug manufacturing production rose +0.1% m/m, right on expectations. Aug industrial production rose +0.4% m/m, stronger than expectations of +0.1% m/m.
The University of Michigan U.S. Sep consumer sentiment fell -1.8 to 67.7, weaker than expectations of 69.0.
The University of Michigan U.S. Sep 1-year inflation expectations unexpectedly eased to a 2-1/2 year low of 3.1%, better than expectations of no change at 3.5%. Also, the Sep 5-10-year inflation expectations eased to a year low of 2.7%, better than expectations of no change at 3.0%.
EUR/USD (^EURUSD) Friday rose by +0.18%. Hawkish ECB commentary Friday gave the euro a boost. ECB President Lagarde said the ECB is not discussing interest rate cuts, and ECB Governing Council member Vasle said he wouldn’t exclude further ECB interest rate hikes.
Eurozone Q2 labor costs eased to +4.5% y/y from +5.2% y/y in Q1.
ECB President Lagarde said the level of borrowing costs and the length of time they stay elevated "will matter significantly" and that the ECB is not discussing interest rate cuts.
ECB Governing Council member Vasle said core inflation is still "relatively high" and "I wouldn't exclude that further interest rate hikes might be necessary."
USD/JPY (^USDJPY) Friday rose +0.26%%. The yen Friday fell to a 10-1/4 month low against the dollar. Friday’s rally in the Nikkei Stock index to a 1-1/4 month high reduced the safe-haven demand for the yen. Also, higher T-note yields on Friday weighed on the yen. In addition, the yen fell on a report that said the BOJ sees a discrepancy between BOJ Governor Ueda’s recent comments and how traders interpreted the remarks, saying Ueda’s reference to a potential to end negative rates was a general statement rate rather than a policy signal.
The Japan Jul tertiary industry index rose +0.9% m/m, stronger than expectations of +0.3% m/m.
October gold (GCV3) Friday closed +13.50 (+0.71%), and December silver (SIZ23) closed +0.392 (+1.70%). Precious metals prices on Friday posted moderate gains, with silver climbing to a 1-week high. Weakness in the dollar Friday was supportive for metals. Also, stock weakness on Friday boosted the safe-haven demand for precious metals. In addition, silver garnered support after reports on China Aug industrial production and U.S. Aug industrial production were stronger than expected, a bullish factor for industrial metals demand. Bearish factors included higher global bond yields and the continued liquidation of gold holdings by funds after long gold holdings in ETFs fell to a 3-1/3 year low Thursday.
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
