NEWS / Foreign Exchange

USD weakness continues. Gold at 28-year highs

Overnight News Bullets

• GE Import Price Index MoM/YoY (Sep) out at 0.6%/1.3% vs. 0.4%/1.2% expected. Prior at -0.7%/-0.6%.

• SW Trade Balance (Sep) out at 8.2B vs. 7.5B expected. Prior at 3.3B (revised from 0.6B)

• SW PPI MoM/YoY (Sep) out at 0.6%/5.0% vs. 0.4%/4.8% expected. Prior at -0.4%/4.2%.

• GE IFO (Oct) Business Climate out at 103.9 vs. 103.7 expected, Current Assessment at 109.6 vs. 109.3 exp, Expectations at 98.6 vs. 98.3.

• UK BBA Loans for House Purchase (Sep) out at 52685 vs. 61051 prior.

• CZ Central Bank leaves Repo Rates unchanged at 3.25% unchanged as expected. * US Durable Goods Orders (Sep) out at -1.7% vs. 1.5% expected. Durables ex transportation out at 0.3% vs. 0.7% expected.

• US Initial/Cont. Claims out at 331K/2530K vs. 320K/2528K expected. Prior at 339K/2523K.

• US New Home Sales (Sep) MoM out at 4.8% vs. -3.1% expected. Prior at -7.9% (revised from -8.3%).

• US Help Wanted Index (Sep) out at 24 vs. 23 expected. Prior at 23.

• JN Tokyo CPI YoY (Oct) out at 0.1% vs. 0.0% expected. Prior at -0.1% (revised from -0.2%). Tokyo Core CPI out at 0.0% as expected.

• JN National CPI YoY (Sep) out at -0.2% vs. -0.1% expected. Prior at -0.2%. Core CPI out at -0.3% as expected. Prior at -0.2%.

• JN Industrial Production MoM/YoY (Sep P) out at -1.4%/0.8% vs. -1.2%/1.2% expected. Prior at 3.5%/4.4%.

Markets

• FX: Range bound Asian market despite JN CPI figures, with USD contining weaker across the board.

• Fixed Income: Both Treasuries and Bunds remain with a bullish bias ahead of Wednesday's Fed rate decision.

• Stocks: US Stocks closing little changed with large shadows the last three days...Market awaits direction.

• Commodities: Crude oil breaks above $90 per barrel again. Gold and silver rallying on weaker dollar.

O/N Data Heat map:

Calendar

Today's Highlights:

This and Next Week??™s Highlights:

What's going on?

• The dollar weakness continued overnight with USD headed for a third weekly decline against euro after reports of unexpected drop in US durable good orders.

• Crude oil prices are in a new record high territory with December WTI contract hitting $91.40 a barrel. Unexpected drop in US stockpiles have added to on-going concern that supply from Middle East may be disrupted.

• Gold rose to 28-yr high as continued dollar weakness and record high oil prices spurred demand for gold as alternative investment. Spot gold has hit a high of $776.91 on Friday??™s trading.

• Asian equities were broadly higher with Hang Seng breaching 30,000 to reach another all-time high. Both strong earnings from the likes of Sony Corp and increasing expectations of further US interest rate cuts helped Asian equities higher.

FX

USDCAD to test the lows

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