Dollar Weakens Ahead of PPI
The U.S. Dollar is down against most major peers as a selloff in Artificial Intelligence sector debt drives U.S. bond yields lower.
The U.S. 10-year yield slid 9 bps to approximately 5.09%, marking its lowest level in three weeks. Producer Price Index (PPI) numbers for the month of September are due at 8:30am, and Traders are watching closely to see if the figures reflect the higher inflation seen in the Consumer Price Index (CPI) numbers released yesterday morning. A hot print would further reinforce expectations with regard to interest rate hikes from the Federal Reserve and should therefore provide some level of respite for the Dollar. The Month-over-Month PPI Final Demand figure is expected to come in at 0.6%, up from August’s print of 0.4%. Initial Jobless Claims for the week ending October 10th are also due at 8:30 and are expected to come in at 200k.
What to Watch This Week…
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The complete Economic Calendar can be found here.
CHF
The Swiss Franc is the G10’s best performer this morning as Traders flock to safe-haven assets amidst a global equity selloff that has seen the Nikkei and Kospi indices both fall by more than 5%. Swiss Producer Price Index (PPI) numbers did come in below expectations this morning, which caused the Franc to pare some of its gains, but not enough to reverse the performance seen from haven flow.
JPY
The Japanese Yen is up against the Dollar today and benefitting from flight to safety dynamics around the equity sell off. Bank of Japan Board Member Junko Koeda stated this morning that the Japanese economy had shown resilience and that price trends are beginning to stabilize around 2% but that the BoJ needs to hike rates in a ‘timely manner’ to prevent inflation from exceeding their target. While she gave no specific signals regarding the pace of hikes, the comments were generally supportive of the BoJ’s gradual tightening bias and are therefore modestly supportive of the Yen.