Treasuries showed a lack of direction in morning trading on Friday but saw modest weakness throughout the afternoon.Bond prices lingered below the unchanged line going into the close of trading. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, inched up by 1.3 basis points to 0.744 percent.The modestly lower close by treasuries came following the release of a report from the Commerce Department showing much stronger than expected U.S. retail sales growth in the month of September.A report from the Commerce Department said retail sales spiked by 1.9 percent in September after rising by 0.6 percent in August. Economists had expected retail sales to climb by 0.7 percent.Excluding a jump in sales by motor vehicles and parts dealers, retail sales still surged up by 1.5 percent in September after climbing by a downwardly revised 0.5 percent in August. Ex-auto sales were expected to rise by 0.5 percent compared to the 0.7 percent increase originally reported for the previous month.Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.4 percent in September after dipping by 0.3 percent in August.Michael Pearce, Senior U.S. Economist at Capital Economics, said the strong retail sales growth "suggests the economy was carrying more momentum into the fourth quarter than anticipated, defying fears that the expiry of enhanced unemployment benefits in the summer would harm the economy."Further reducing the appeal of safe havens like bonds, the University of Michigan released a report showing a bigger than expected improvement in consumer sentiment in the month of October.The preliminary report said the consumer sentiment index rose to 81.2 in October from the final September reading of 80.4. Economists had expected the index to inch up to 80.5.However, a report from the Federal Reserve showing an unexpected decrease in industrial production in the month of September helped limit the downside for treasuries.The Fed said industrial production fell by 0.6 percent in September after rising by 0.4 percent in August. The drop surprised economists, who had expected production to increase by 0.5 percent.Looking ahead to next week, traders are likely to keep an eye on the latest developments in Washington as well as reports on homebuilder confidence, housing starts, and existing home sales.The material has been provided by InstaForex Company - www.instaforex.com
The U.S. dollar turned in a sluggish performance on Friday with updates on the stimulus front, retail sales data, surging coronavirus cases and cautious moves by traders ahead of the upcoming elections all playing a role in its movements.A report from the Commerce Department said retail sales spiked by 1.9% in September after rising by 0.6% in August. Economists had expected retail sales to climb by 0.7%.Closely watched core retail sales, which exclude automobiles, gasoline, building materials and food services, jumped by 1.4% in September after dipping by 0.3% in August.The University of Michigan released a report showing a bigger than expected improvement in consumer sentiment in the month of October. The report said the consumer sentiment index rose to 81.2 in October from the final September reading of 80.4. Economists had expected the index to inch up to 80.5.On the stimulus front, U.S. Senate Majority Leader Mitch McConnell rejected the push for a larger coronavirus stimulus deal, hours after President Trump told FOX Business he was willing to raise his spending offer above the White House's current $1.8 trillion proposal.The dollar index, which fell to 93.53 in early U.S. session, recovered to 93.72, but was still down by about 0.15% from previous close.Against the Euro, the dollar was down marginally at 1.1720Against Pound Sterling, it was down slightly at 1.2913The Yen, which moved in a tight band between 1015.19 and 105.49 a dollar, was last seen at 105.40, compared to Thursday's close of 105.45 a dollar.The Aussie was down 0.23% with the AUD/USD pair trading at 0.7078The Swiss franc was little changed at 0.9150 a dollar, while the Loonie was at 1.3189 a dollar, down 0.25% from 1.3221 on Thursday.On the Covid-19 front, new coronavirus infections are surging rapidly in Europe, with several countries seeing steep spikes in new cases.London will enter a tighter Covid-19 lockdown beginning at midnight today, while a nighttime curfew will take effect in some French cities starting Saturday.The daily rise in infections surged past 7,000 for the first time ever in Germany, smashing the previous record set just the day before.The material has been provided by InstaForex Company - www.instaforex.com
The National Bureau of Statistics of China recently reported Chinese gross domestic product grew by 4.9 percent in the third quarter (year-to-year), worse than the expectations of the surveyed analysts, who foresaw it to be at 5.2 percent, but better than the previous quarter growth, which stood at 3.2 percent.
Central Bankers Express Global Economy Fears at G-30, Chinese GDP Lower at 4.9%; Nikkei 225 Up By 1.19%
The NZ dollar drifted higher against its major trading partners in the Asian session on Monday, as a historic victory for New Zealand's Labour Party in this weekend's election underscored the government's success in battling the coronavirus.Prime Minister Jacinda Ardern has secured a second term in office, defeating the National Party in the general election on Saturday.According to the Electoral Commission, the Labour Party has won 49 percent of the vote, which would give it 64 seats in the 120-member parliament.The score was the highest for the Labour party since the introduction of a voting system known as Mixed Member Proportional representation in 1996.Ardern's re-election was supported by her success in handling the country's COVID-19 outbreak.Ardern said that the government would focus on tackling COVID, raise funding for disadvantaged schools and enhance income taxes on wealthy people.Sentiment was underpinned by China data showing an economic recovery from the Covid-19 pandemic.The National Bureau of Statistics said China's gross domestic product was up 4.9 percent on year in the third quarter of 2020, missing forecasts for a gain of 5.2 percent but still up from 3.2 percent in the three months prior.The currency held steady against its key counterparts on Friday, excepting the aussie.The kiwi appreciated 0.4 percent against the greenback, approaching a 4-day peak of 0.6630. The NZD/USD pair had ended Friday's trading session at 0.6601. Immediate resistance for the kiwi is likely seen around the 0.68 level. The kiwi added 0.5 percent to touch a 4-day high of 69.91 against the yen. The pair was valued at 69.59 at last week's close. Further rally in the currency may face resistance around the 72.5 level.Data from the Ministry of Finance showed that Japan recorded a merchandise trade surplus of 674.978 billion yen in September. That was shy of expectations for a surplus of 989.8 billion yen, but still up from the 248.3 billion yen surplus in August.The NZ currency was up by 0.3 percent against the euro, at a 4-day high of 1.7680. The kiwi was worth 1.7731 per euro at Friday's New York session close. Should the currency rallies further, it is likely to test resistance near the 1.70 region.Although the kiwi firmed to near a 3-month high of 1.0700 versus the aussie, it pulled back in subsequent deals. The kiwi was trading at 1.0710 versus the aussie when it finished deals on Friday. The kiwi may challenge support near the 1.08 mark. Looking ahead, Canada wholesale sales for August and U.S. NAHB housing market index for October will be out in the New York session.The material has been provided by InstaForex Company - www.instaforex.com