The market seems reluctant to push the greenback above JPY145, thinking it risks another round of intervention. The US dollar is slightly more than a quarter-yen range around JPY144.50. It has spent most of the last three sessions in this range as well. That is the most since it began disclosing the intervention in 2019. Lastly, we also note that South Korea sold $15.4 bln in Q2 to support the won. This is seen reflecting a slowing of world demand. Separately, but related, chip inventories swelled (67.3%), while factory shipments fell for the second consecutive month. The reason this is particularly noteworthy is that for the first-time semiconductor output fell on a year-over-year basis (-1.7%) for the first time in four years. South Korea reported a larger than expected drop in industrial output. The median forecast in Bloomberg's survey called for a 0.8% decline in August after the 1.3% decline in July. ![]() The strength of today's retail sales report likely reflects an overall rise in household spending, while case earnings probably slowed. The headline rate may ease slightly from the 2.9% seen in August, while the core rate, which excludes fresh food, by have risen a little. Tokyo' CPI (October 4) is a good indicator of the national reading. Next week begins with the Tankan Survey, in which large businesses are seen doing better than small businesses. The unemployment rate slipped to 2.5% from 2.6%, as expected, while the job-to-applicant ratio rose more than anticipated to 1.32 from 1.29. On a year-over-year basis, housing starts were expected to fall 4.0% in August. The median projection was also for a 0.2% gain. August retail sales rose 1.4%. The median forecast in Bloomberg's survey was for a 0.2% gain. Japan's data mostly surprised on the upside. Note that China's mainland markets are closed next week the national holiday. The Caixin manufacturing PMI slumped to 48.1 from 49.5. This resulted in the composite reading easing to 50.9 from 51.7. The non-manufacturing PMI disappointed, slipping to 50.6 from 52.6. ![]() It is up about 3.1% this week, which would be the fourth week in the past five that prices have risen.Ĭhina's PMI was mixed, but shows the economy continues to struggle. The improvement unexpected came from the manufacturing PMI, which edged back above the 50 boom/bust level to 50.1 from 49.4. December wheat is also up almost 1.4% today. It is up 1.4% today after climbing nearly 4% over the past two sessions. This is the third consecutive week of falling prices. Iron ore slipped 0.2% after rising 0.6% yesterday. It has been a volatile week, but it is down almost 4% this week, which is the fifth week Europe’s natgas benchmark has fallen. US natgas is up 1.3% after rising about 3.3% over the past two sessions. ![]() December WTI is holding mostly above $80 today but is below yesterday’s high near $82. It reached nearly $1675, a new high for the week today. Gold reversed higher in the middle of the week and has continued to recovery. The Chinese yuan rose for a second session. Among emerging market currencies, central Europe is underperforming. The dollar is mixed, though mostly a little firmer. Europe’s Stoxx 600 is recouping around half of yesterday 1.65% fall, while US futures are trading higher. Hong Kong and India were notable exceptions. Equities in Asia Pacific suffered after the losses in the US yesterday. The panic seen at the start of the week in the UK has subsided considerably, as sterling recovered to almost where it was a week ago, while BOE’s hand has help steady the Gilt market. Benchmark 10-year yields are off 6-8 basis points in Europe and the United States.
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