The euro trade stable at $1.2650 level against the U.S

Good Morning,

- The euro trade stable at $1.2650 level against the U.S. dollar, after dipping to a two-week low of $1.2614 yesterday.

- U.S. stock futures tumbled while safe-haven assets such as the yen and U.S. bonds gained on Friday after a doctor who returned to New York City from West Africa tested positive for Ebola. Japan's Nikkei 1.01%, Hong Kong's Hang Seng -0.38% (07:16 GMT), Korea's Kospi -0.31%, Australia's ASX 200 0.55% and China's Shanghai 0.01%.

- As U.S. bond prices gained, the 10-year U.S. yield fell back to 2.250 percent from Thursday's two-week high of 2.300 percent.

- German GFK: The mood of German consumers improved again slightly in October. The downward trend in the consumer climate has therefore come to an end. Following a revised value of 8.4 points in October, the overall indicator is forecasting 8.5 points for November. Income expectations and willingness to buy have increased slightly, while almost no change was recorded in economic expectations. In October, German consumers were evidently less affected by the continued problematic geopolitical situation and the resultant economic slowdown than they had been in the previous month.

- For the ECB, success as the euro area’s financial supervisor may begin this weekend with a few failures. At noon in Frankfurt on Oct. 26, investors will learn which of the currency bloc’s 130 biggest banks fell short in the ECB’s year-long examination of their asset strength and ability to withstand economic turbulence. After two previous stress tests run by the European Banking Authority didn’t reveal problems at lenders that later failed, the ECB has staked its reputation on getting this exercise right.

- The Japanese yen was under pressure after a Wall Street Journal report sparked talk of more easing from the Bank of Japan. The article, citing people familiar with the central bank's thinking, said the BOJ now saw "a much bigger possibility of inflation slipping below 1 percent" due to falling oil prices.

- SocGen on EUR/USD: Portfolio outflows have pressured EUR/USD sharply lower from both private and public investors, notes SocGen. "EUR/USD should be around 1.31/1.32 in a normal trading environment as bullish Fed rate hike expectations were pulled back. We are anything but under normal circumstances. The ECB’s negative deposit facility has effectively forced reserves to stop diversifying into EUR, and as core European curves are crushed, reserves are forced out of the EUR," SocGen argues. The emergency selling of EUR reserves is partly over. "BIS data suggest that foreign reserves have increased their USD deposits at the expense of EUR deposits by selling EUR treasury equivalents. These USD deposits are just above USD600bn," SocGen notes.

- The Conference Board Leading Economic Index® (LEI) for China increased 0.9 percent in September to 302.6 (2004 = 100), following a 0.7 percent increase in August and a 1.3 percent increase in July. Five of the six components contributed positively to the index in September. “The six-month growth rate of the Leading Economic Index has eased steadily throughout the third quarter, indicating increased downside risks to economic growth in the months ahead,’’

- A physician with Doctors Without Borders who had returned to New York City from West Africa has tested positive for Ebola, according to media reports.

- Sunday will also see presidential election in Brazil, where stocks and the currency have suffered on expectations that the current President Dilma Rousseff is likely to beat her rival, Aecio Neves, who is seen as more market-friendly.

- Watch today: German consumer angst, UK growth, US home.

Have a nice Weekend !