Market Comment – Better-than-expected US PMIs help the dollar rebound
PMIs suggest the US economy entered Q4 on solid footing
The divergence between US/Eurozone outlooks weighs on euro/dollar
Aussie rallies on stickier inflation, yen pinned near 150-per-dollar mark
Wall Street pays attention to corporate earnings
![](https://www.xm.com/wp-content/uploads/2023/10/perf_Oct25.png)
Although the 10-year US Treasury yield held steady comfortably below the psychological zone of 5%, the US dollar was able to stage a comeback against most of its major counterparts as the flash US PMIs for October suggested that the world’s largest economy fared better than expected during the first month of the fourth quarter, with the manufacturing index escaping a contraction for the first time since April, and the composite index rising to 51.0 from 50.2.
This came in huge contrast to the Euro-area PMIs for the month that were released earlier in the day and painted an even uglier picture than they did in September. The divergence allowed euro/dollar bears to jump into the action from near the crossroads of the pair's 50-day moving average and the key resistance barrier of 1.0665, suggesting the latest recovery may have been just a corrective wave within the broader downtrend.
Dollar traders turn gaze to Q3 GDPThe slide may extend, and the pair could soon retest this month’s lows if Thursday’s data reveal astounding performance of the US economy in Q3. Expectations are for a solid 4.2% annualized growth rate, with the risks perhaps tilted to the upside as the Atlanta Fed GDPNow model estimates that the US economy may have grown 5.4% during that period.
The fact that Treasury yields did not track the dollar’s rebound may be an indication that investors were still reluctant to add to bets of another hike by the Fed after the better PMIs. Indeed, according to Fed funds futures, there is only a 40% chance for one final 25bps increase by January, while there are still around 80bps worth of rate reductions penciled in for next year. That said, the implied path could well be lifted, and rate cuts could be scaled back if upcoming data continues to point to a resilient US economy.
Aussie extends gains after CPIs, dollar/yen pinned near 150The aussie was among the currencies that outperformed the dollar yesterday, spiking even higher today after data showed that Australia’s inflation slowed by less than expected in Q3 and that the monthly y/y rate for September rose to 5.6% from 5.2%. This prompted investors to add to their bets of more hikes by the RBA, with the probability of another quarter-point increase at the November gathering rising to around 42%.
The yen attempted a recovery at some point yesterday, but the rebound in the dollar pinned the dollar/yen pair back near the highly monitored 150 territory, with traders biting their nails in anticipation of any signs of intervention by Japanese authorities. What could reveal whether officials are ready to act now or whether the level at which they feel comfortable intervening has shifted higher, may be a stellar US GDP print tomorrow that could force the pair to pierce through that psychological ceiling.
Wall Street ekes out gains, driven by upbeat earningsWall Street closed Tuesday in the green after upbeat forecasts from Verizon, Coca-Cola and other firms sparked optimism regarding the health of US businesses, encouraging investors to increase their risk exposure. The fact that the Fed’s implied rate path was not lifted after the better PMIs may have also helped Wall Street, which seems to be slowly shifting its attention away from the Middle East conflict.
After the closing bell, both Microsoft and Alphabet reported better-than-expected results, but the performance of their cloud services diverged. Microsoft’s Azure took off during the third quarter, but Alphabet’s cloud business saw its slowest growth in at least 11 quarters. After today’s close, it will be the turn of Meta Platforms to announce results.
In another sign that the financial world is turning its focus away from geopolitics, oil prices fell for the third straight day yesterday, perhaps as weak business surveys from the Eurozone and the UK weighed on the demand outlook.
![](https://www.xm.com/wp-content/uploads/2023/10/calendar_Oct25.png)
관련 자산
최신 뉴스
면책조항: XM Group 회사는 체결 전용 서비스와 온라인 거래 플랫폼에 대한 접근을 제공하여, 개인이 웹사이트에서 또는 웹사이트를 통해 이용 가능한 콘텐츠를 보거나 사용할 수 있도록 허용합니다. 이에 대해 변경하거나 확장할 의도는 없습니다. 이러한 접근 및 사용에는 다음 사항이 항상 적용됩니다: (i) 이용 약관, (ii) 위험 경고, (iii) 완전 면책조항. 따라서, 이러한 콘텐츠는 일반적인 정보에 불과합니다. 특히, 온라인 거래 플랫폼의 콘텐츠는 금융 시장에서의 거래에 대한 권유나 제안이 아닙니다. 금융 시장에서의 거래는 자본에 상당한 위험을 수반합니다.
온라인 거래 플랫폼에 공개된 모든 자료는 교육/정보 목적으로만 제공되며, 금융, 투자세 또는 거래 조언 및 권고, 거래 가격 기록, 금융 상품 또는 원치 않는 금융 프로모션의 거래 제안 또는 권유를 포함하지 않으며, 포함해서도 안됩니다.
이 웹사이트에 포함된 모든 의견, 뉴스, 리서치, 분석, 가격, 기타 정보 또는 제3자 사이트에 대한 링크와 같이 XM이 준비하는 콘텐츠 뿐만 아니라, 제3자 콘텐츠는 일반 시장 논평으로서 "현재" 기준으로 제공되며, 투자 조언으로 여겨지지 않습니다. 모든 콘텐츠가 투자 리서치로 해석되는 경우, 투자 리서치의 독립성을 촉진하기 위해 고안된 법적 요건에 따라 콘텐츠가 의도되지 않았으며, 준비되지 않았다는 점을 인지하고 동의해야 합니다. 따라서, 관련 법률 및 규정에 따른 마케팅 커뮤니케이션이라고 간주됩니다. 여기에서 접근할 수 있는 앞서 언급한 정보에 대한 비독립 투자 리서치 및 위험 경고 알림을 읽고, 이해하시기 바랍니다.