This trading week was less saturated with critical events, but the few that occurred significantly impacted the market. Oil data, the US government shutdown, and Donald Trump's speech became the defining factors for traders this week.
United States:
● US President Trump's Speech. Donald Trump once again proposed implementing a 100% tariff on films produced abroad. Following the statement, shares of media companies Paramount Skydance and Warner Bros. Discovery dropped by 2.1% and 1.3%, respectively, while streaming platform Netflix's stock fell by 1.5%.
China:
● Manufacturing Purchasing Managers' Index (PMI) (Sept). (Actual: 49.8; Forecast: 49.6; Previous: 49.4). This indicator of the health of China's industrial sector came in better than forecast, sending a positive signal for the yuan.
Australia:
● Interest Rate Decision (Sept). (Actual: 3.6%; Forecast: 3.60%; Previous: 3.60%). The central bank management stated they would continue to adhere to a cautious monetary policy.
United Kingdom:
● GDP (QoQ) (Q2). (Actual: 0.3%; Forecast: 0.3%; Previous: 0.3%).
● GDP (YoY) (Q2). (Actual: 1.4%; Forecast: 1.2%; Previous: 1.2%). The overall annual growth of the UK economy exceeded forecasts, which could have supported the pound, but the USD/GBP pair showed no significant movement.
United States:
●CB Consumer Confidence Index (Sept). (Actual: 94.2%; Forecast: 95.3; Previous: 97.4). Consumer sentiment was weaker than predicted.
● JOLTS Job Openings (Aug). (Actual: 7.227M; Forecast: 7.150M; Previous: 7.181M). The labor market situation improved, but this did not provide strong support for the dollar.
Eurozone:
●Harmonized Consumer Price Index (HICP) (YoY) (Sept). (Actual: 2.2%; Forecast: 2.2%; Previous: 2.0%). Inflation aligned with the forecast, and the euro showed no reaction.
United States:
●Key event of the day was the US government shutdown announcement. The US government partially suspended operations after Republicans and Democrats failed to reach an agreement on the budget. However, there was no panic in the markets, as traders had already priced in the risks of such a development.
●ADP Non-Farm Employment Change (Sept). (Actual: -32K; Forecast: 53K; Previous: 54K). This leading indicator pointed to weakness in the US labor market and put pressure on the dollar.
● Manufacturing PMI (Sept). (Actual: 52.0%; Forecast: 52.0; Previous: 52.0).
● Crude Oil Inventories. (Actual: 1.792M; Forecast: -0.607M). The rise in inventories was one factor in the decline of oil prices. Additional pressure came from expectations of an OPEC+ meeting, which might decide to increase production. As a result, Brent crude dropped to $64.11 per barrel on Thursday, its lowest level since June 2.
Switzerland:
● Swiss CPI (MoM) (Sept). (Actual: 0.2%; Forecast: -0.2%; Previous: -0.1%). Inflation data came in as expected and did not affect the franc's exchange rate.
Eurozone:
● S&P Global Composite PMI (Sept). (Actual: 51.2%; Forecast: 51.2; Previous: 51.2).
● Services PMI (Sept). (Actual: 51.3%; Forecast: 51.4; Previous: 51.4). The data had little to no impact on the euro.
US labor market data (including NFP) was not released on Friday due to the shutdown. However, this proved to be a positive factor for the dollar, as Fed representatives Goolsbee and Logan stated on Thursday that the US economy was sound.
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