US Dollar Index gained for the 11th week in a row, with Monday maintaining the pattern.
The US Dollar (USD) did not have much time to celebrate its eleventh consecutive week of gains. Last week was a nail-biter, with the US Dollar Index (DXY) only able to lock in its gains in the final few trading hours. Although the US government shutdown appears to be ended for the time being, with the US Congress delaying the budget showdown until November, For the past six weeks, the can has simply been kicked down the road.
On the statistics front, the Personal Consumption Expenditures (PCE) index reaffirmed the US Federal Reserve’s current attitude. Although energy contributed to inflation in the headline PCE, the Core data indicated continuing deflation. The key question for Monday will be how the Purchasing Managers Index (PMI) behaves, since a further drop into contraction might start to damage.
The US Dollar is in for a rough week, according to the daily digest.
The week begins with the S&P Global Manufacturing Purchase Managers Index for September, which is released at 13:45 GMT. The figure should stay stable, albeit in contraction, about 48.9.
The Institute of Supply Management (ISM) will meet at 14:00 GMT. Is set to release its monthly figures for September: Employment is predicted to fall from 48.5 to 48.3 percent. New Orders reached 46.8, but no prediction is provided at this moment. The Purchasing Managers Index (PMI) is predicted to fall from 47.6 to 47.7. Prices Paid are predicted to rise slightly from 48.4 to 48.6.
Markets are expected to hear from Federal Reserve Chairman Jerome Powell and Philadelphia Fed President Patrick Harker at 15:00 GMT.
The US Treasury will auction a 3-month and 6-month bill at 15:00 and 15:30 GMT, respectively.
More Fed speakers follow, with John Williams from New York speaking at 17:30 GMT and Loretta Mester from Cleveland speaking at 23:30 GMT.
Equities are down marginally. Japan is in the red, with both the Topix and the Nikkei 225 falling by less than 0.50%. European shares are rising, while US futures indicate a strong green opening later this Monday.
According to the CME Group FedWatch Tool, markets are pricing in a 69.2% possibility that the Federal Reserve will hold interest rates steady at its November meeting. The unexpected decline from 81.7% comes with the PCE print, when a few variables showed inflation going up again.
The benchmark 10-year US Treasury yield is lower at 4.60%, putting it in the center of last week’s range of 4.50% to 4.68%.
