Euro Pressured by Italian Budget Dispute, USD Continues Post FOMC Growth

Market Reviews

US dollar rises significantly. Japanese yen is trading as the second strongest. Swiss franc and euro remain the weakest. The single currency is pressured by Italian political worries, as Italy's coalition government insists on increasing spending by 2.4% in 2019. European stocks reversed earlier decline and are trading higher now (FTSE up 0.44%, DAX up 0.29%, CAC up 0.19%).

US economic data were mixed today. Q2 GDP was finalized at 4.2% annualized, unrevised. GDP price index was revised up to 3.3%, from 3.0%. Initial jobless rose 12k to 214k in the week ended September 22, above expectation of 208k. Continuing claims rose 16k to 1.611m in the week ended September 15.

US Headline durable goods order jumped sharply by 4.5% in August, above expectation of 1.5%. Ex-transport orders rose only 0.1%, missed expectation of 0.3%. Wholesale inventories rose 0.8% mom in August, above expectation of 0.3% mom. Trade deficit widened to USD -75.8B in August.

German CPI accelerated to 2.3% yoy in September, above expectation of 2.0%. Gfk consumer confidence rose 0.1 to 10.6 in October. Eurozone business climate was unchanged at 1.21 in September below expectation of 1.39. Industrial confidence fell to 4.7, below expectation of 5.2. Services confidence rose to 14.6 but missed expectation of 15.3. Economic confidence fell to 110.9 and missed expectation of 111.5. Consumer confidence was finalized at -2.9. M3 rose 3.5% yoy in August.

World Trade Organization (WTO) predicts world trade growth to be slower than previously thought in 2018 and 2019 amid escalation of the global trade war. According to updated forecasts, world trade in goods would grow by 3.9% in 2018, less than the 4.4% growth forecast in April. In 2019, trade growth is expected to be of 3.7%, down from the WTO's previous forecast of 4.0% gain.