From Marc to Market:
Overview: The US dollar is trading softer but most inside yesterday's ranges. An unexpected jump in Japanese unemployment has weighed on the yen, which is the only G10 currency that is not gaining on the dollar today. The soft greenback means the Canadian dollar is likely under-performing and it is barely firmer on the day. Sterling is the next to weakest following the final September composite PMI reading that lowered to slightly above the 50 boom/bust levels. Most emerging market currencies are also firmer. The JP Morgan and MSCI emerging market currency indices are up 0.2%-0.3% this week.....MUCH MORE
Equities are pushing higher. In the Asia Pacific region only Hong Kong among the large bourses fell. Japan's major indices were up over 1%. Taiwan is pushing against US pressure to bring half of its chip making capacity to the US, but stocks rallied 1.45% today, about half of this week's gains. South Korea's Kospi rallied 2.7% today and was up 2.25% on the week. Europe's Stoxx 600 is up for the sixth consecutive session. It nearly 2.8% rally this week is the most in five months. US index futures are trading higher. Benchmark 10-year yields are narrowly mixed in Europe, except for the 10-year Gilt, where the yield is off a couple basis points. The 10-year US Treasury yield is up one basis point to 4.09%, roughly the middle of the recent range. Gold is firm but off record high set yesterday near $3897. It is up for the seventh consecutive week. November WTI has stabilized after tumbling more than 2% yesterday to approach a four-month low near $60.
USD: The Dollar Index snapped a four-day slide yesterday, after retracing almost half of the post-Fed rally. It reached almost 98.15 yesterday, a three-day high. Monday's high was closer to 98.20. There has been no follow-through buying today. It has held below 98.00 and recorded the session low near 97.70 in Europe. The September employment report should be the highlight of the day, but the government shutdown is continuing to disrupt the release of economic reports. Still, it seems an exaggeration to claim the Fed (and investors) are "flying blind". The use of private sector data has grown from looking at corrugated cardboard orders, train car loadings, and holiday wrapping paper sales. The PMI/ISM, ADP, Boeing orders, auto sales, Challenger job cuts, and house prices are examples of private sector generated data. The University of Michigan and Conference Board surveys have moved markets. There are numerous regional Federal Reserve surveys that are also tracked by policymakers and investors, which should not be disrupted by the political impasse in Washington. On tap today is the final services and composite PMI and ISM services. The preliminary PMI showed slower growth in services and composite output and at 53.9 and 53.6, both are at three-month lows. The ISM services index is seen softening to 51.7 from 52.0. The employment sub-index has been 50 since June....
