We don’t have a specific trade idea coming into the session, however we will be watching the German, French and EZ GDP prints for a possible opportunity if they all come out negative which will likely pressure the EUR and continue to build on the sentiment for additional ECB easing.
Current Market Sentiment:
Yesterday during NY U.S. Initial jobless claims held unchanged at 276K for the highest 2-week run in two months. The movement higher of initial claims the last two weeks could become a concern if they fail to show improvement in next week’s report, one that will be very closely watched.
Jolts Job openings had a strong showing printing at 5.53m vs the consensus 5.39m, which is a positive sign for labor demand. Job openings peaked in July at 5.67 m. High job demand will absorb slack from the supply of available labor, in what could precede wage inflation and become a concern for Fed policy makers.
Fed Chair Yellen stuck to the script and did not address the near term outlook for the U.S. economy or monetary policy in her brief opening remarks at the Conference on Monetary Policy Implementation in the Post-Crisis Period. However we did hear comments from Fed members Evans, Lacker, and Bullard, however they had no significant impact on the direction of the USD. Fed Fund Futures are still showing a 70% probability of a 25 bps hike at the December meeting.
During Asia Japanese data came in mixed with the Revised Industrial Production slightly better than expected at 1.1% vs the expected 1.0%, and Tertiary Industry Activity contracting 0.4% vs the expectation of a 0.2% increase. The JPY was not effected by the data.