Headlines:
- Another day where both gold and the dollar are standing out
- USD/JPY ramps higher as the upside breakout continues this week
- Gold continues to print record highs: US government shutdown keeps bearish risks away
- EU reportedly sees fresh US demands on trade as undercutting current agreement
- ECB's Nagel: Current monetary policy is appropriate
- ECB's Rehn: Current situation is good but medium-term downside risks visible
- ECB's Escrivá: We are at appropriate level of interest rates, no need for further guidance
- ECB's Muller: Inflation is where we want it to be
- Germany August industrial production -4.3% vs -1.0% m/m expected
- US MBA mortgage applications w.e. 3 October -4.7% vs -12.7% prior
- UK stats office deals with another blunder, this time in public finances data
Markets:
- USD and CAD lead, JPY lags on the day
- European equities higher; S&P 500 futures up 0.1%
- US 10-year yields down 2.5 bps to 4.101%
- Gold up 1.3% to $4,035.99
- WTI crude up 1.4% to $62.58
- Bitcoin up 0.7% to $122,918
The US government shutdown drags on and that continues to give market players very little to work with in trading this week.
But amid political developments in Japan and France, the dollar continues to find bids alongside gold once again. USD/JPY is seen ramping higher to 152.70, up 0.5% on the day as Sanae Takaichi fails to seek a coalition agreement with the Komeito party. Meanwhile, EUR/USD is down 0.2% to 1.1630 with the low earlier touching 1.1605 as the pair threatens a break under its 100-day moving average for the first time since March.
Besides that, USD/CHF is up 0.2% to hover near 0.8000 again while NZD/USD is among the laggards and down 0.4% to 0.5775 on the day. The RBNZ surprised earlier with a 50 bps rate cut, prompting a sharp drop in the kiwi but it is at least off the lows now.
In other markets, stocks are seen finding back some renewed vigour after a bit of a pause yesterday. European indices were more pensive amid political risks in France but with French bond yields dropping back, we're seeing a notable rebound today. The DAX is up 0.6% with the CAC 40 up 0.9% on the session currently.
This comes as US futures are also nudging back a little higher, with S&P 500 futures up 0.2% after tech shares led declines in the day before.
In the commodities space, gold remains one of the major standouts once more as it cruises past the $4,000 mark without any hiccups - at least for now. The precious metal is up over 1% to $4,035 and is looking to firm up a move above the key level while silver is also up over 2% to briefly clip the $49 mark for the first time since April 2011. Up, up, and away!
