Dollar Drops as Dow Tops 10,000

Financial and Economic News and Comments

US & Canada

• US retail sales declined a less-than-expected 1.5% m/m in September after a downwardly revised 2.2% m/m increase in August, data from the Commerce Department showed. The decline in September retail sales was due auto and parts sales which tumbled 10.4% m/m, the biggest drop since August 2005, after a 7.8% m/m gain in August. Retail sales excluding autos advanced a more-than-expected 0.5% m/m in September after a downwardly revised 1.0% m/m increase the previous month. Retail sales fell 5.7% y/y in September but rose at a 2.1% annual rate in the last three months. Excluding autos, retail sales declined 4.9% y/y but grew at a 4.0% annual rate in the past three months. Retail sales excluding autos and gas were up 0.4% m/m in September, a second straight gain.

• US import prices were up as forecast 0.1% m/m in September, the sixth rise in seven months, after a downwardly revised 1.6% m/m advance in August, data released by the Labor Department showed. Excluding petroleum, import prices rose 0.6% m/m in September but declined 4.1% y/y. Export prices slid 0.3% m/m in September after a 0.7% m/m increase in August. Import prices fell 12.0% y/y in September; export prices decreased 5.6% y/y.
• US business inventories fell a more-than-expected 1.5% m/m in August, the largest fall this year, to a seasonally adjusted $1.311 trillion, after a downwardly revised 1.1% m/m decline in July, figures from the Commerce Department showed. Business sales increased 1.0% m/m to $989.6 billion, following July's upwardly 0.3% m/m advance. The inventory-to-sales ratio declined to 1.33 in August from 1.36 in July, higher than August 2008's 1.30. Inventories fell 13.3% y/y in August; sales dropped 15.1% y/y.

Europe

• Eurozone industrial production grew 0.9% m/m in August, a fourth consecutive month-on-month gain, after an upwardly revised 0.2% m/m increase in July, Eurostat reported. August IP fell 15.4% y/y, the slowest year-onyear fall in eight months, following July's 15.9% y/y drop.
• UK jobless claims rose a less-than-expected 20,800 in September, the smallest monthly rise since May 2008, to 1.63 million, the highest level since April 1997, after rising a downwardly revised 23,000 in August, figures from the Office for National Statistics showed. The claimant count rate was 5.0% in September, slightly less than expected. Overall unemployment was 2.47 million in the three months through August, a 1,000 decline from the three months through July. The unemployment rate based on International Labour Organization methods was 7.9% for the three months to August, up 0.3 over the previous quarter and up 2.1 over the year. Average earnings including bonuses increased 1.6% y/y in the three months through August. Average earnings excluding bonuses rose 1.9% y/y, the lowest rate since records began in 2001.

Asia-Pacific

• The Japanese consumer confidence index excluding one-person households increased to 40.5 in September from 40.1 in August, indicating Japan's household sentiment climbed for a ninth consecutive month and reached a 23-month high, according to data from the Cabinet Office. The index has improved every month since December's record-low 26.2, adding to Japanese economic recovery signs; however, a number below 50 means pessimists outnumber optimists. Including one-person households, the consumer confidence index advanced to 40.7 in September from 40.4 a month earlier.
• Japan's domestic corporate goods prices were up 0.1% m/m in September after unchanged m/m in August, according to the Bank of Japan corporate goods price index. September CGPI fell 7.9% y/y, a ninth consecutive year-on year fall, following August's 8.5% y/y decrease.
•  The Westpac-Melbourne Institute consumer sentiment index for Australia increased 1.7% m/m to 121.4 in October after rising 5.2% m/m to 119.3 in September, indicating Australian consumer confidence rose for a fifth consecutive month and reached the highest level in more than two years, according to a Westpac Banking Corp. and Melbourne Institute survey.
• China's exports fell 15.2% y/y in September, the smallest fall in nine months, while imports declined 3.5% y/y, the least in 11 months, the Customs Bureau said. The trade surplus narrowed to $12.93 billion in September from $15.7 billion in August.
• China's new local-currency loans rose to 516.7 billion yuan ($75.7 billion) in September from 410.4 billion yuan in August, the People's Bank of China said.

FX Strategy Update

 
EUR/USD
USD/JPY
GBP/USD
USD/CHF
USD/CAD
AUD/USD
EUR/JPY

Primary Trend
Positive
Negative
Positive
Negative
Negative
Positive
Neutral

Secondary Trend
Positive
Negative
Negative
Negative
Negative
Positive
Neutral

Outlook
Neutral
Neutral
Negative
Neutral
Neutral
Positive
Neutral

Action
Buy
Buy
Sell
Buy
None
Buy
None

Current
1.4575
89.36
1.5996
1.0142
1.0239
0.9153
133.43

Start Position
1.4575
88.58
1.6346
1.0385
1.0891
0.6601
N/A

Objective
N/A
N/A
N/A
N/A
N/A
N/A
N/A

Stop
N/A
86.50
1.6560
N/A
1.0600
0.8570
N/A

Support
1.4700
88.00
1.5750
1.0100
1.0200
0.8800
130.00

1.4400
87.00
1.5500
1.0000
1.0000
0.8600
128.00

Resistance
1.5000
90.00
1.6000
1.0450
1.0500
0.9200
139.00

1.5400
92.50
1.6400
1.0600
1.0600
0.9300
145.00

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