Dollar at its strongest in two months 💲📈 Lack of U.S. data is suppressing the bearish trend

The Bureau of Labor Statistics said it will publish the September consumer price index on Oct. 24, marking a rare exception to release data during the government shutdown.

The report will come out that day at 8:30 a.m. in Washington, compared to the original publication date of Oct. 15, the agency said Friday.

“No other releases will be rescheduled or produced until the resumption of regular government services,” BLS said in a statement. “This release allows the Social Security Administration to meet statutory deadlines necessary to ensure the accurate and timely payment of benefits.”

Source: Bloomberg Europe

Honda, BYD, and Chery dealerships in Mexico City, Mexico.

Mexican lawmakers will pause until late November the discussion of a government proposal to impose tariffs of as much as 50% on cars, steel and other products imported from China and several Asian nations that don’t have a trade deal with the country, according to a top congressman.Ricardo Monreal, leader of the ruling Morena party in the lower house of Congress, said that lawmakers must be careful with the proposal and review it “very seriously.”“We’re going to put it on hold,” Monreal told journalists. “We can address it by the end of November.”

The Economy Ministry didn’t immediately reply to a request for comment.

President Claudia Sheinbaum’s administration sent the plan to Congress last month, seeking to raise levies on more than 1,400 categories of products coming from countries with which Mexico has no trade agreement. Economy Minister Marcelo Ebrard said the proposal seeks to protect the Mexican industry from unfair competition.While the plan to Congress was initially made as part of the government’s proposed 2026 budget, lawmakers are now seeking to debate it separately from the spending plan.China, South Korea and India are among the exporters that would be hit under the proposed levies, which requires Congress approval. The import taxes would also affect items such as auto parts, toys and furniture, with rates of 10% to 50% depending on the category.

The proposal caused unease in China, which launched a trade barrier investigation aimed at safeguarding the interests of its industry, according to a statement from the Chinese Ministry of Commerce. The ministry reiterated that if Mexico goes ahead with the unilateral tariff hike, it will harm the interests of China and other trading partners, seriously undermine the predictability of Mexico’s business environment, and weaken investor confidence.“We have to be more careful, given that tariffs are being imposed on countries that, without being trading partners, engage in intense, and sometimes unfair trade with our products in Mexico,” Monreal added Thursday.

As part of the North American trade pact that includes the US, Canada and Mexico known as the USMCA, those trading partners would be unaffected by the tariffs. Sheinbaum’s proposal could favor trade negotiations between Mexico and the US ahead of the review of that trade agreement, which is scheduled for next year.Trump imposed a tariff of 25% on Mexican goods earlier this year, though most are exempted because they comply with the US-Mexico-Canada trade pact. Certain sectors including steel and autos have been affected by the levies.In late July, Trump agreed to continue talks with Mexico for a 90-day period, instead of further hiking tariffs as he did to other countries at the time.

Source: Yahoo Finance

​Analyst expectations point to strong results

​What's driving the optimism?

​Key themes to watch in bank earnings

​Market sentiment and investor positioning

Source: ig

ECB is Not Gearing Up for Monetary Policy Changes

Expectations indicate no prospects for interest rate cuts in the near term

Does France Remain a Problem for the Euro?

The yield spread indicates excessive overselling in the EURUSD pair.

Technical Analysis (EURUSD)

Source: xtb

US consumer sentiment was little changed in early October as Americans expect scant improvement in the job market or inflation.

The preliminary October sentiment index edged down to 55 from 55.1 in September, according to the University of Michigan. While the latest figure was the lowest in five months, it was firmer than the median projection in a Bloomberg survey of economists.

Consumers expect prices to rise at an annual rate of 4.6% over the next year, compared with 4.7% a month earlier, according to the data released Friday. They saw costs rising at an annual rate of 3.7% over the next five to 10 years, unchanged from September.

“Pocketbook issues like high prices and weakening job prospects remain at the forefront of consumers’ minds,” Joanne Hsu, director of the survey, said in a statement. “At this time, consumers do not expect meaningful improvement in these factors.’’

The absence of official data releases because of the government shutdown has reduced visibility into an economy characterized by resilient consumer spending. Still, private-sector economic indicators and surveys indicate the labor market remains soft, while manufacturing and services activity struggle for momentum.

About 63% of respondents said they expect unemployment to rise in the next year, down a touch from the prior month but nearly twice as high as last year. More than two-thirds see inflation exceeding their income growth in the coming year, the report showed.

Buying conditions for durable goods dropped to the lowest level since 2022 on concerns about tariffs.

The survey showed the current conditions gauge rose to 61 this month from 60.4 in September, while the expectations index eased to a five-month low.

A gauge of sentiment among Republicans rose to the highest level since Donald Trump's first presidential term. It also improved among political independents but fell among Democrats.

The survey was conducted Sep. 23 to Oct. 6.

Source: Bloomberg Europe

Key points:

The number of Americans filing new applications for unemployment benefits increased again last week, economists estimated on Thursday, hinting at some early layoffs of contractors related to the U.S. government shutdown.Initial claims for state unemployment benefits rose to a seasonally adjusted 235,000 for the week ending October 4 from 224,000 the prior week, economists at JPMorgan and Goldman Sachs calculated. They made assumptions for Hawaii and Massachusetts, whose data was unavailable.

Citigroup estimated 234,000 claims last week.

Official economic data collection and publication has been suspended because of the government shutdown, now in its second week.States have continued to collect unemployment claims data and submit it to the Labor Department's database, which remains accessible. The shutdown following a lapse in funding has delayed the release of the closely watched employment report for September, crucial for decision-making by the Federal Reserve, businesses and households.

"The increase could be due to government contractors filing for unemployment benefits while temporarily laid off as the government is shut down," said Gisela Young, an economist at Citigroup. "Initial claims also increased during October 2013, the last full government shutdown. We would expect claims to either increase further or stay elevated next week too."

The shutdown has sent hundreds of thousands of U.S. federal workers home, with spillover effects to contractors, thousands of whom have been furloughed. Economists also expected a separate unemployment claims program for federal workers to show a rise in applications. Despite last week's increase, initial claims remained within their recent range.

CLAIMS ARE STILL "REASONABLY" LOW

"Excluding any shutdown noise, claims still look reasonably low," said Abiel Reinhart, an economist at JPMorgan. "Once the government re-opens, claims should quickly reverse any shutdown-related increase."The labor market has been stuck in a "no firing" and "no hiring" mode, with economists saying U.S.tradeand immigration policies, and the growing popularity of artificial intelligence, have reduced demand and labor supply.

Minutes of the U.S. central bank's September 16-17 policy meeting published on Wednesday showed Fed officials described their outlook for the labor market as "uncertain and viewed downside risks to employment as having increased over the intermeeting period." The Fed resumed cutting interest rates last month to support the labor market.

Lackluster hiring has left many people who lose their jobs experiencing long bouts of unemployment and drawing unemployment checks for some time.The number of people receiving benefits after an initial week of aid, a proxy for hiring, increased to a seasonally adjusted 1.927 million during the week ending September 27, from 1.919 million in the prior week, JPMorgan estimated.

Goldman Sachs calculated the so-called continuing claims rose to 1.924 million in the last week of September.

Source: TradingView