U.S. Treasury debt yields rose on Friday after data showed the world's largest economy grew at a faster rate than expected in the third quarter, suggesting the U.S. Federal Reserve was on track to raise interest rates at its December meeting.
Reassuring results from some of Europe's biggest banks gave the region's beaten-down financials a boost on Thursday and helped offset weakness in industrial and tech stocks, while higher bond yields continued to underpin the dollar.
New orders for U.S. manufactured capital goods unexpectedly fell in September amid weak demand for computers and electronic products, which could temper expectations for an acceleration in business spending in the fourth quarter.
The dollar hit its highest level in nearly eight months against the euro and a roughly three-month high against the yen on Tuesday on growing expectations that the Federal Reserve would raise interest rates in December, while the offshore yuan hit a record low.
Looking at the Euro/U.S. Dollar currency pair we see price trapped in a big consolidation pattern, a triangle that seems to be over as of recent bearish price movement. It's a five-wave correction, a continuation pattern that can after its completion push price lower into a strong decline.
Global stocks were resilient last week Friday with major arenas clawing back gains following the upbeat corporate earnings and stabilising oil prices which revived risk appetite. Asian shares floated into gains on Monday as the improving Japanese trade data propelled the Nikkei +0.29% higher. European markets have already commenced this week on a solid footing by borrowing Asia’s bullish momentum and this could influence Wall Street later today.
It has been a very good week for the U.S. dollar and a really bad one for the euro and Canadian dollar, among others. The rally has lifted the Dollar Index to its highest level since early February and possibly on course to 100.
Stock markets were erratic on Thursday with most major arenas violently swinging between losses and gains as the messy combination of depressed oil prices, a resurgent U.S. Dollar and rising European Central Bank stimulus hopes kept investors on edge.
The U.S. dollar advanced against most majors with the Canadian and Australian dollars the outliers as commodity prices continue to rally after the OPEC production cut deal was announced. Chinese data is once again in the spotlight with the release of its real gross domestic product (GDP) and industrial production on Tuesday, Oct. 18 at 10:00 pm EDT.