U.S. Review
Staying the Course
- The FOMC announced an end to its most recent round of asset purchases this week. The move comes as economic growth remained strong in the third quarter, advancing at a 3.5 percent annualized rate.
- Consumer confidence rose 5.5 points to the highest level in seven years in October, but households remain cautious in spending. Consumer spending fell 0.2 percent in September, while incomes registered the smallest monthly gain in nearly a year.
- Durable goods orders unexpectedly fell in September, but purchasing managers’ indices remain at fairly high levels.
Global Review
BoJ Eases Again Despite Positive Growth in Q3
- Monthly economic data through September indicate that real GDP growth in Japan rebounded into positive territory in the third quarter following its tax-hike-induced swoon in Q2. The Japanese economy should continue to grow in coming quarters.
- The Bank of Japan agrees with this assessment, but it surprised market participants this week by announcing an increase in the size of its qualitative and quantitative easing (QQE) program. The BoJ is effectively taking out “insurance” that deflationary expectations do not set in again.
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Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.