What to watch for on Friday, September 30:
The fears remain the same, but the market does not. The dollar ended the day unevenly on the currency board, despite Wall Street resuming its slide and paring all of Wednesday’s gains. Treasury yields were flat, with the 10-year note yielding 3.75% and the 2-year note 4.17%.
Tensions between the Union and Moscow over gas supplies intensified after the suspected sabotage of the Nord Stream gas pipelines. Germany launched a relief package in response to rising gas and electricity prices, while Hungary announced it would not support new energy sanctions on Russia.
Furthermore, the chief economist of the Bank of England, Huw Pill, pointed out that “it is difficult to avoid the conclusion that the announced fiscal easing will provoke a significant and necessary response from monetary policy in November”, after the controversial measures adopted by the Government and the central bank in recent days.
According to preliminary estimates, the German Harmonized Index of Consumer Prices increased at an annual rate of 10.9%. The EU is to release the first estimate of the Consumer Price Index on Friday, while the US is due to release the Consumer Price Index, the Fed’s favorite measure of inflation.
European currencies rose steadily, despite the bad news that continues to come from the old continent. EUR/USD is flirting with 0.9800, while GBP/USD is trading at the 1.1070 price zone. The USD/CHF pair falls to 0.9760.
The USD/JPY pair remains lifeless around 144.30, while commodity-linked currencies give up some ground against their US rival. AUD/USD changes hands at 0.6490, while USD/CAD sits just below 1.3700.
Spot gold is trading near its weekly high in the $1,660 area, while crude oil prices are little changed intraday. A barrel of WTI is currently at $81.50.
Theattention will turn to China early Friday. The country will publish the official September manufacturing PMI and the non-manufacturing index, while Caixin will publish the manufacturing PMI. The sector is expected to remain in contraction territory, while services output is expected to have contracted in the month. Weaker-than-expected numbers could spur risk aversion and weigh on the pair.
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Source: Fx Street