- Market sentiment is bullish and weighs on US Treasury yields and the dollar.
- Eurozone inflation rose 3.4%, above the ECB’s target.
- The US ISM Manufacturing PMI shows an expansion in the overall economy, according to the ISM.
The EUR/USD it is cutting losses, trading at 1.1596, just up 0.13% for the day at the time of writing. As the New York session progresses, market sentiment has improved. The four major US stock indices post gains between 0.68% and 1.72%. On the other hand, renewed optimism at the end of the US session hit US Treasury yields, with the benchmark 10-year note coupon shedding more than half a percent, standing at 1,472%, for the first time since Monday.
The US dollar index, which tracks the performance of the US dollar against six pairs, is posting losses for the second day in a row, is down 0.23%, clinging to 94.04, putting upward pressure on the EUR / USD pair.
The euro zone consumer price index rose above 3.4%
In the economic agenda of the Eurozone, the readings of the Consumer Price Index for September were published. The Basic Consumer Price Index rose 1.9% as expected, while the Consumer Price Index jumped above the 3.3%, predicted by economists, reaching 3.4%.
US ISM manufacturing PMI expanded the most in four months
Across the pond, the Institute for Supply Management released the PMI for September. The reading rose to 61.1, better than the 59.6 expected by analysts. According to the report, the reading indicates “expansion of the overall economy for the 16th consecutive month after the contraction of April 2020.”
Meanwhile, the University of Michigan consumer confidence rose slightly to 72.8 more than expected. The report shows that Americans are somewhat more optimistic about current economic conditions.
The Fed’s favorite reading for inflation, the Personal Consumption Spending Index for August, rose 3.6% annually, one tenth more than expectations.
For next week, the European economic agenda will count on Wednesday with Retail Sales on an annual and monthly basis, expected at 0.4% and 0.8%, respectively.
On the other hand, investors will be looking for the US ISM services PMI for September to be released on Tuesday. Also, on Wednesday, ADP employment for September could be a prelude to what nonfarm payroll reading might look like once it is released on Friday.
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