US dollar rose against practically every G10 currency.
US Dollar (USD) is recovering this week, even turning positive, as markets remain concerned about China. Recent Chinese data on domestic activities over Golden Week revealed that expenditure has been lower than expected. This keeps concerns about China’s economic activity, both local and international, high on the agenda.
The Economic Calendar This Wednesday’s schedule is once again extremely light. Aside from a few minor data indicators, such as Wholesale Inventories for August, the main event will be the release of the Federal Open Market Committee (FOMC) Minutes, which will limit the current Federal Reserve rate decision in September. Markets will learn about the logic behind the 50 basis point rate drop and what it implications for the November rate decision.
Daily Market movers: China fears are depressing markets.US Dollar Index trades above 102.50 and appears to be on its way to 103.00.
Concerns about China continue to stifle market activity. Chinese markets are still falling off, with the Hang Seng Index down over 1.5% at the close. The Shanghai Composite plummeted more than 7%.
At 11:00 GMT, the Mortgage Bankers Association had contracted further this week. , by 5.1%, up from a smaller 1.3% contraction last week.
At 14:00 GMT, August Wholesale Inventories are due. Expect a stable 0.2% growth rate, similar to what occurred in July.
There are two Fed speakers scheduled for this Wednesday:
Around 16:30 GMT, Federal Reserve Vice Chair Phillip Jefferson (a neutral FOMC member according to FXStreet’s Fed Tracker) speaks at an event hosted by the Charlotte Economics Club in Charlotte, North Carolina.
At 22:00 GMT, Federal Reserve Bank of San Francisco President Mary Daly (also neutral according to the Fed Tracker) takes part in a moderated discussion and Q&A session at Boise State University.
The US Treasury will auction a 10-year note at 17:00 GMT.
European stocks are turning green.
European stocks are turning green. with slight gains, while US equities futures continue to struggle with minor losses ahead of the US opening bell.
The CME Fedwatch Tool predicts an 88.6% possibility of a 25 basis point (bps) interest rate drop at the upcoming Fed meeting on November 7, with 11.4% expecting no cut. Chances of a 50 basis point rate drop have already been totally priced out.
The US 10-year benchmark rate is trading at 4.03%, its highest level since mid-August.
