Day of the dollar as data returns

<p>The ‘buy dollars wear diamonds’ theme has returned, despite the collapse of risk and oil. GBP leads the ugly currency contest with cable retreating sub […]</p>

The ‘buy dollars wear diamonds’ theme has returned, despite the collapse of risk and oil. GBP leads the ugly currency contest with cable retreating sub 1.59 following disappointing CPI data that has the market pushing out rate hikes by a further two months. The realism around an EU referendum in the UK also weighs on the proud pound, adding to the woes of a market long sterling. The pound’s fortunes this morning are likely to be dominated by the UK jobs report along with a potential negative M&A deal. AbbVie looks to reconsider the purchase of Shire following the change in rules with regards to corporate inversions.

Risk has stabilised a little in Asia, adding to the slightly better outcome seen in the US session as the S&P 500 closed up 0.16%. Global growth and disinflation concerns were absent for the day, although China inflation data overnight reminded us of the issues. CPI for September came in at 1.6% versus the 1.7% consensus forecast and the 2% outcome for August as the PPI outcome also disappointed.

The FX markets will take the direction from equity and oil markets ahead of the return of US data this week in the form of retail sales, PPI, business inventories and the Fed’s Beige Book. We also have corporate reporting from Bank of America (before the open) and American Express (after the close). In New Zealand we get the latest dairy product auction.



Supports 1.2600-1.2575-1.2500   | Resistance 1.2690-1.2715-1.2765



Supports 107.00-106.55-105.55      Resistance 107.80-108.55-109.15



Supports 1.5885-1.5855-1.5785  Resistance 1.5945-1.6000-1.6030



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