USD and Global Stocks Recover, Euro Pares Gains

Market Reviews

US dollar recovers along with the global stocks. But for today, Canadian dollar and Australian dollar are the strongest one so far, while US dollar is the third strongest. Meanwhile, the British pound is the weakest one, followed by the euro.

The EUR/USD pair retreated from 2-week highs at $1.1611 and is now trading just below the key level of $1.1600. Earlier, the pair recovered from 7-week lows, but a moderate recovery in the dollar did not allow it to grow further.

European shares rose today. FTSE gained 0.74%, DAX increased by 0.74% and CAC grew by 0.81%. Earlier today, all major Asian indices closed with gains. Nikkei rose 0.46%, Singapore Strait Times was up 0.71%. Hong Kong HSI added 2.21%. China Shanghai SSE gained 0.91%. German-Italian spread stays above 300. Italian 10 year yield is down -0.025 at 3.545. German 10 year yield is down -0.008 at 0.512.

Today’s data showed, that US import prices rose 0.5% in September and showed the largest increase since May. Economists had forecast import prices rising 0.2% in September. On annual basis, import prices rose 3.5% in September after a 3.8% in August. Core import prices rose 1% in the 12 months through August.

Germany's consumer price inflation rose to its highest level in nearly seven years in September. The German consumer prices advanced 2.3% yoy, the fastest since November 2011, when inflation was 2.4%. Prices had advanced only 2% in August. On a monthly basis, inflation rose to 0.4% from 0.1% in August. Both annual and monthly rates matched initial estimate published on September 27.

US Treasury Secretary Steven Mnuchin met with China PBOC Governor Yi Gang. The US treasury secretary says China needs to identify concrete ‘action items’ to rebalance the two countries' trade relationship before talks to resolve their disputes can resume. He told China’s central bank chief that currency issues needed to be part of any further US-China trade talks, and expressed his concern about the yuan's recent weakness. Mnuchin said after the meeting that “I expressed my concern about the weakness in the (yuan) currency and that as part of any trade discussions, currency has to be part of the discussion.“