Greenback Mildly Stronger, Australian Dollar Muted

Greenback has reinforced but the recovery impulse is weak. Australian dollar is subdued by negative retail sales. Still, Aussie remains the firmest. Single currency remains soft. Pound has slightly improved. Janet Yellen delivered a speech. The Chair stated that Fed is trying to loosen restrictions on smaller banks. Shinzo Abe talked with Donald Trump via telephone. The leaders discussed North Korea, they acknowledged that more radical methods are required. The Presidents are going to meet in November.

Yesterday, King Felipe VI called referendum in Catalonia illegal and today Carles Puigdemont (Catalonia leader) said that many Catalans were upset and insulted by his words. The leader will soon declare independence. King Felipe’s view was supported by Frans Timmermans (European Commission Vice President), Guy Verhofstadt (Belgian member of the European Parliament) and Manfred Weber (German politician). Still, there were some who understood Catalans. Ska Keller (Greens group leader) claimed that it was a police, who acted illegally.

Australian retail sales fell -0.6% mom in August, the biggest fall in more than 4 years. Wage growth is weak. Household debt is high. Trade surplus rose to 0.99 billion of Australian dollars. Exports increased 1% to 32.2 billion of Australian dollars and imports indicated 31.2 billion of Australian dollars. Domestic demand growth is disappointing. 10 year bond yield is near 2.6%, the cash rate is at 1.5%. The long-term average premium marks 0.8%. Today, Swiss will publish Consumer Price Index. Eurozone will announce retail PMI. The United States will show Challenger job cuts, jobless claims, trade balance and factory orders. Canada will feature trade balance.