NEWS / Foreign Exchange

USD weakness continues and Crude Oil trading at $89.5/bbl

Overnight News Bullets

• SW Unemployment Rate (Sep) out at 4.2% vs. 4.3% expected. Prior at 4.8%.

• UK Retail Sales MoM/YoY (Sep) out at 0.6%/6.3% vs. 0.1%/5.5% expected. Prior at 0.7%/4.8%

• UK Public Finances (Sep) out at 9.0B vs. 12.5B expected. Prior at 5.1B.

• UK M4 Money Supply MoM/YoY (Sep P) out at 1.0%/12.8% vs. 0.9%/12.5% expected.

• UK M4 Sterling Lending (Sep P) out at 23.0B vs. 18.0B expected. Prior at 26.9B.

• E-Z Trade Balance (Aug) out at 1.3B vs. 0.0B expected. Prior at 5.7B.

• E-Z Construction Output MoM/YoY (Aug) out at 0.4%/2.8% vs. -0.1%/1.4% prior.

• PD PPI MoM/YoY (Sep) out at 0.1%/2.0% vs. 0.2%/2.0% expected. Prior at 0.3%/1.8%.

• US Initial/Cont. Claims (Weekly) out at 337K/2534K vs. 312/2525K expected.

• CA Int??™l Securities Transactions (Aug) out at ??“C$3.830 vs. C$2.250 expected. Prior at ??“C$0.748.

• US Leading Indicators (Sep) out at 0.3% as expected. Prior at -0.8%.

• US Philly Fed (Oct) out at 6.8 vs. 7.0 expected. Prior at 10.9.

• NZ Visitor Arrivals (Sep) out at -3.2% vs. 3.8% prior.

• Japanese All Industry Index MoM (Aug) out at 1.0% vs. 1.1% expected.

• Australian Import/Export Prices QoQ (3Q) out at -0.8%/-3.0% vs. -1.0%/-0.5% expected.

• Australian New Motor Vehicle Sales MoM/YoY (Sep) out at 1.8%/7.8% vs. -1.0%/8.4% expected.

• NZ Credit Card Spending YoY (Sep) out at 9.5% vs. 8.4% prior.

Markets

• FX: USD weakness continues. EURUSD again making new highs and Carry Trades edging towards unwinding.

• Fixed Income: Strength across the board, supported by stock market weakness. STIR Futures about unchanged.

• Stocks: Generally a half to a full percent lower. Nikkei down by more than 2 percent.

• Commodities: Crude Oil testing $89.50/bbl! Gold and silver going higher, but nothing impressive.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• Dollar weakness continues on the back of disappointing earnings report from Bank of America and soft jobless claims data. Euro hit another all-time high against dollar at 1.4319 on Friday morning??™s trading.

• Crude oil broke the $90 a barrel level for the first time with the November delivery reaching $90.2 in after-hours trading on NYMEX as lower dollar continued to add to oil demand levels.

• Yen based carry trades are extending the unwinding action ahead of the G7 meeting that starts in Washington today. European officials are expected to voice their concern over the yen weakness.

• Broad losses in Japanese shares have further fuelled the carry trade unwinding, as Nikkei 225 index suffered biggest drop since September 18th amounting to 1.9%. Losses were led by large financial corporations, such as Mizuho Financial.

FX

EURUSD breaking higher again...