Today, on October 16th, the US Dollar drooped 0,11% during the Asian trading session. This decline was followed by yesterday’s drop against other majors after the USA revealed poor economic figures during the American trading session.
In particular, the US retail sales came out worse than expected while the NY manufacturing index and PPI dropped below their previous levels. The retail sales dropped by 0,3% in September, thereby dropping 0,2% (excluding car sales), the SU Department of Trade reported yesterday. This is the first drop since January. The year-over-year figures decreased from 5% in August to 4,3% in September. The decline was seen almost in every single niche. The only niche to show a boost was computer electronics, which indicated a 3,4% increase thanks to the sales of Apple’s new mobile devices – iPhone 6 and iPhone 6 Plus.
The Fed’s Empire State index dropped down to 6,17 points in October, which is significantly lower than expected by analysts (20,50). The September value of 27.54 was the highest level reached in 5 years. Still, the sharp and unexpected decline may turn out to be a wake-up call. Still, the employment rate has grown a lot. At the same time, the next 6-month employment forecast looks promising as well.
China’s consumer prices increased by 0,5% in September and by 1,6% year-to-date as opposed to 2% seen a month ago. The annual growth is going at one of the slowest rates in 5 years, thereby being far below the government’s target of 3,5%.
The American stock market closed yesterday’s trading session in the red zone and is still going down within the scope of a bearish reaction to the previous rally. Meanwhile, the trading volume on US exchanges – NYSE, Nasdaq – has been growing over the last few days. Nasdaq gained 2,6% after rebounding from 411 – May’s low. S&P500 rebounded from the local low as well but later closed below yesterday's opening price.
Nasdaq is showing some signs of positive dynamics even though the bears are still dominating the market. The thing is that gainers outnumbered losers 14 to 12.
The current retracement in stock markets is probably reflecting investors’ concerns about the future pace of economic growth in the USA, Europe and Asia. At the same time, the Fed is about to finish tapering QE3 this month. The Fed’s FOMC is going to hold another meeting on October 28th-29th. The central bankers are likely to discuss interest rates during the forthcoming meeting.
Today’s major news events:
September’s industrial production figures. Economists expect growth – plus 0,4%.
Business optimism index for October. 59 points expected.
Philadelphia Fed’s reports for October.
USD Index
Yesterday’s weak American figures contributed to the decline of the index from the local high of 86,10. The move reached 84,52. According to the experts, who are members of Masterforex-v Academy, today’s European reports may support the US Dollar if came out poor (as expected). A break above 85,39 will give way to 85,82.
