Yen crosses stage a sharp reversal into US session following sharp fall in European and US stock markets. US stock investors are also concerned that surging oil prices above $96 a barrel, as also seen in higher than expected PCE price index released today, will force the Fed to be on hold, after a neutral to slightly hawkish statement from Fed yesterday. Further slide is seen after the disappointing ISM manufacturing report. The momentum of carry trade unwinding has also dragged down Euro and Aussie against the greenback. Though, Sterling is relatively firm as supported by EUR/GBP cross.
The personal income and spending report from US showed that headline inflation accelerated more than expected from 1.8% yoy to 2.4%, comparing to consensus of 2.3%. Though, core PCE deflator, the Fed's preferred gauge of inflation remained steady at 1.8% yoy. Personal spending and spending were mixed. Income growth 0.4%, meeting expectation, with prior month's growth revised up from .3% to 0.4%. However, spending missed expectation of 0.4% and grew 0.3% only, with prior month's growth revised down from 0.6% to 0.5%.
ISM manufacturing index dropped more than expected to 50.9 in Oct, hitting a seven month low. Though, price paid component Rebounded from 59 to 63. Employment component also improved slightly from 51.7 to 52.0. Talking about the job market, jobless claims improved modestly from revised 333k to 327k. Challenger's report showed further drop in layoffs from 71k to 63k in Oct. Markets' focus will turn to tomorrow's Non-Farm Payroll.
The personal income and spending report from US showed that headline inflation accelerated more than expected from 1.8% yoy to 2.4%, comparing to consensus of 2.3%. Though, core PCE deflator, the Fed's preferred gauge of inflation remained steady at 1.8% yoy. Personal spending and spending were mixed. Income growth 0.4%, meeting expectation, with prior month's growth revised up from .3% to 0.4%. However, spending missed expectation of 0.4% and grew 0.3% only, with prior month's growth revised down from 0.6% to 0.5%.
ISM manufacturing index dropped more than expected to 50.9 in Oct, hitting a seven month low. Though, price paid component Rebounded from 59 to 63. Employment component also improved slightly from 51.7 to 52.0. Talking about the job market, jobless claims improved modestly from revised 333k to 327k. Challenger's report showed further drop in layoffs from 71k to 63k in Oct. Markets' focus will turn to tomorrow's Non-Farm Payroll.
