The U.S. Dollar remained steady today, with the Bloomberg Dollar Spot Index (BBDXY) showing slight depreciation while Mexican Peso continues to swing more wildly as we get closer to elections in the U.S
Overview
This stability for the Buck comes as U.S. equity futures edged higher, supported by positive earnings reports from Netflix Inc. and other major tech companies. Netflix jumped 7.0% in U.S. premarket trading after surpassing Additionally, Apple saw a significant increase in China sales of its latest iPhone compared to the 2023 model.
This is all helping form a narrative of more optimism over the global growth narrative. Nevertheless, the MSCI Emerging Market Currency Index has dwindled by 1.4% thus far in October. Treasuries steadied from their heavy selling after strong U.S. economic data on Thursday recast expectations for interest-rate cuts. The robust retail sales underscored strong consumer spending, lessening the urgency for the Federal Reserve to unwind restrictive rate policy.
We will hear commentary on it from Neel Kashkari as he gives macroeconomic remarks starting at 9:50AM while Waller and Bostic will have events and speak around noon. Mid-point through this month, the Buck has managed to recover over 2.0% of its value per the BBDXY.
What to Watch This Week…
- WEBINAR: Navigation Election Uncertainty – Oct 24 @ 2pm EST
- Monex USA Online is always open
EUR ⇑
The Euro experienced a slight decline following the European Central Bank’s decision to deliver another 25 basis point rate cut on Thursday, but the shared currency has already covered the loss overnight. This decision was accompanied by weaker inflation prints and lackluster economic data in the Eurozone. UBS expects the ECB to continue easing at every meeting until mid-2025, which could lead to further volatility in the Euro. However, other banks such as UBS share our optimism in also believing that positive surprises in the European economy could lift the Euro more than negative surprises would put it under pressure. Looking ahead, markets will be closely monitoring Germany’s ability to spark growth while also assessing the effects to come from a determination in the continent for countries to arm themselves and spend drastically more in the Defense sector
MXN ⇑
The Mexican Peso is mounting a bit of a recovery, up by almost 1.0% this trading session. Our neighbor’s tender dropped by 1.6% on Wednesday following comments from Republican presidential candidate Donald Trump, who singled out Mexico as a challenge for the U.S. and suggested tariffs to protect U.S. companies. This has heightened investor concerns about potential trade disruptions. Despite this, nearshoring continues to show positive effects on Mexico’s economy, attracting investment and generating skilled jobs. We will get more gauges on economic activity starting Tuesday with Retail sales as well as inflation coming out next week.
