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U.S. consumer confidence surged to its highest level since the year 2000 yet dollar bulls seem to be treading carefully ahead of the FOMC decision. Sterling was able to hold on to most of its gains from the earlier session.

  • U.S. house price index up 0.2% as expected, 0.3% previous
  • U.S. CB consumer confidence index jumped to 138.4 vs. 132.2 forecast in Sept
  • Aug CB consumer confidence index upgraded to 134.7 in Aug
  • Richmond manufacturing index up from 24 to 29 vs. 22 forecast
  • U.S. official: Canada not making dairy concessions needed for NAFTA deal
  • Italy’s Di Maio threatened not to back 2019 budget
  • New Zealand trade deficit widened from 196M NZD to 1484M NZD

Major Events/Reports:

Mostly upbeat U.S. data

Uncle Sam printed impressive figures a day ahead of the highly-anticipated September FOMC decision, with consumer confidence surging close to its highest levels since Y2K was still a thing.

The consumer confidence index as measured by the Conference Board (CB) for the current month jumped to 138.4 versus expectations of a dip to 132.2. To top it off, the August figure also enjoyed an upgrade to 134.7.

Components of the report revealed that the gains were mostly from a jump in the expectations index from 109.3 to 115.3. Optimism for business conditions in the near term also improved, along with expectations for labor market conditions.

Now this leading indicator is a pretty big deal since stronger consumer confidence usually buoys spending, which then accounts for a huge chunk of overall economic growth. This also suggests that Americans are shrugging off potential repercussions from trade tensions and might be gearing up for a shopping spree in the upcoming holiday season instead.

NAFTA hitting a wall?

The clock is winding down for a NAFTA deal to be reached, but it looks like negotiations aren’t making much progress. According to a top U.S. official, Canada is refusing to make the necessary concessions to strike an agreement.

However, Canadian Foreign Minister Freeland’s spokesperson dismissed these allegations, adding:

“Our focus is the substance, not timelines. We will continue to negotiate with a view to getting a deal that is in Canada’s national interest.”

Lighthizer suggested that they might first move forward with Mexico then just add Canada in the deal later on.

Stocks wobble, oil keeps rising

U.S. equities appear to be prepping for a widely expected Fed interest rate hike in this week’s statement and also reacting to Trump’s tough talk on how the U.S. “will not tolerate such abuse” on trade.

  • Dow 30 index fell 69.84 points to 26,492.21 (-0.26%)
  • S&P 500 index is down 3.81 points to 2,915.56 (-0.13%)
  • Nasdaq is up 14.22 points to 8,007.47 (+0.18%)

The POTUS also made a few jabs to the OPEC for not acting to rein in higher oil prices, but Black Crack still managed to squeeze out a few more gains.

  • WTI crude oil rose to $72.29 per barrel (+0.28%)
  • Brent crude oil rose to $81.87 per barrel (+0.83%)

Major Market Mover(s):

GBP

Pound pairs were able to add to their gains from the earlier trading session as Brexit optimism peeked back in the markets. Word through the forex grapevine is that the EU might be open to free trade but with a customs border.

GBP/USD climbed from 1.3163 to a high of 1.3194; GBP/JPY advanced from 148.50 to a high of 149.02; EUR/GBP dipped to .8926, and GBP/AUD is up to 1.8180.

Watch Out For:

  • 1:00 am GMT: New Zealand ANZ business confidence index (-50.3 previous)
  • 5:00 am GMT: BOJ core CPI y/y (uptick from 0.5% to 0.6% expected)