U.S. Session Forex Recap – Nov. 1, 2016

  • U.S. core PCE price index up 0.1% as expected, 0.2% previous
  • U.S. personal spending up 0.5%, personal income up 0.3% as expected
  • Chicago PMI down from 54.2 to 50.6 vs. 50.1 consensus
  • Canadian IPPI up by 0.4%, RMPI down by 0.1% vs. 0.5% estimate

Forex traders booked their profits at the end of the month, forcing the Greenback to retreat slightly against its peers.

Major Events:

U.S. data meets expectations – Economic data from the U.S. hit the mark, except for the Chicago PMI which slipped from 54.2 to 50.6 to show a much slower pace of industry expansion instead of just dipping to the 54.1 consensus.

Meanwhile, the core PCE price index, which is said to be the Fed’s preferred inflation measure, posted a 0.1% uptick as expected, lower than the previous 0.2% gain. Personal spending picked up by 0.5% while personal income showed a 0.3% increase, also in line with estimates.

Crude oil chatter – Crude oil chalked up another day in declines as oversupply concerns were still in play. According to Reuters, OPEC output reportedly jumped by 130,000 barrels per day as member nations presumably pumped out more oil ahead of a potential production freeze, with Iraq, Libya, and Nigeria leading the gains.

Energy-monitoring service Genscape reported that crude oil stockpiles rose by 585,217 barrels in the storage hub and delivery point in Cushing for the week ending October 28, adding to the drag in prices and pushing WTI crude oil to its monthly low at $46.71 per barrel.

BOE Gov Carney to stay until 2019 – On a more positive note, BOE Governor Carney expressed his commitment to serve his full term in the U.K. central bank, quashing fears that he may jump ship once the Brexit negotiations get messy.

Carney officially announced this decision in a letter to the Chancellor of the Exchequer Philip Hammond, assuring that he will assist in the U.K. economy’s transition into a different relationship with the rest of Europe. Hammond praised Carney for being “highly effective” so a bit of confidence was restored among the Brits.

Major Market Movers:

GBP – Sterling could use some good news after its weak performance in the past weeks, and it appears as though Carney’s decision to stay for three more years has provided a lift.

GBP/USD advanced from a low of 1.2144 to a high of 1.2247, GBP/JPY popped up from a low of 127.58 to a high of 128.40, EUR/GBP slipped from .9002 to .8955, and GBP/AUD recovered above the 1.6000 handle.

Watch Out For:

  • 2:00 am GMT: China official manufacturing PMI (50.4 expected, 50.4 previous)
  • 2:00 am GMT: China official non-manu PMI (53.7 previous)
  • 2:45 am GMT: China Caixin manufacturing PMI (50.2 expected, 50.1 previous)
  • 4:30 am GMT: RBA interest rate statement (Read Forex Gump’s guide here!)
  • Tentative: BOJ policy decision and press conference

See also:

London Session Recap

Asian Session Recap

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