The US dollar firmed throughout the NY session ahead of this weekend's G-20 meeting. Economic data released out of the US was relatively mixed. Weekly jobless claims were slightly better than expected at 452K vs. exp. 455K; however the prior week's number was revised higher to 475K from 462K. The 4-week moving average declined to 458.0K from 462.3K the week before. While indicating a decline in jobless claims, the marginal drop shows little improvement. The Philadelphia Fed Index for October, which was forecasted to show a reading of 2.0, disappointed with a print of 1.0 (prior -0.7). September leading indicators were as expected at +0.3% thought the prior month's +0.1% was revised lower from +0.3%. St. Louis Fed President Bullard was on the wires saying that he favors asset purchases in increments of $100B and favors an open-ended amount. We think that this approach would allow the Fed to manage the varying expectations from the market of the amount of so-called ‘QE2'.
Economic data elsewhere included Euro Zone Consumer Confidence which came in line with expectations at -11 (prior -11) and Canada's September leading indicators fell to a disappointing -0.1% (cons. +0.2%, prior +0.6%). EUR/USD slumped after trading as high as around 1.4050, falling to current levels around 1.3920.
U.S. equities gained for a second consecutive day as earnings season continued with positive results. The Dow Jones Industrial Average advanced by about +0.35% and the S&P 500 gained slightly by around +0.18%. Commodities tumbled as the dollar strengthened. Gold broke below an hourly bear flag pattern falling roughly -1.60% and silver dropped by about -3.42%. Oil slid by nearly -2.28% as demand for commodities dampened.
On the calendar for the upcoming Asia/Pacific session is Australia's 3Q import price index and export price index (QoQ).
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