The US dollar is generally weaker compared to the G10 currencies and emerging market currencies. The Reserve Bank of Australia’s hawkish hold has contributed to a nearly 0.5% increase in the Australian dollar, reaching a four-day high above $0.6700. The Japanese yen has increased significantly, even in light of disappointing industrial production and retail sales figures. The likelihood of a US federal government shutdown appears almost certain at this point. The US has implemented a 10% tariff on softwood timber and lumber, alongside a 25% tax on kitchen cabinets, vanities, and upholstered wood products. Certain events are scheduled to occur as early as October 14, while others will not commence until January 1.

Canada faces significant exposure, currently subjected to a 35.2% duty aimed at addressing purported subsidies and inequitable pricing practices. Equities exhibited a generally positive trend across the Asia Pacific regions; however, South Korea, Australia, and Index markets experienced declines. Europe’s Stoxx 600 is experiencing a slight decline, while US index futures are down approximately 0.15%-0.25%. It is important to recognize that one-third of the S&P 500 is currently in a blackout period prior to earnings, during which they are prohibited from repurchasing their own shares. By mid-October, it is projected to increase to approximately 80%-85%. Benchmark 10-year yields in Europe are showing slight variations, whereas the 10-year US Treasury yield has decreased by just over a basis point, now resting slightly below 4.13%.

Gold is experiencing a downward reversal following the establishment of a new record high near $3871. It has now slipped below $3800. November WTI has continued its decline from yesterday, which saw a nearly 3.5% drop, and is down an additional 1% today. The price decreased to $62.45, having concluded the previous week slightly above $65.70. The Dollar Index continued its decline from last Friday, dipping yesterday to just below 97.80 and approaching 97.65 today, which coincides with the 20-day moving average. The level corresponds to the (38.2%) retracement of the rally that followed the Fed’s rate cut on September 17. The upcoming retracement level at 50% is approximately 97.40. The US is observing house prices, JOLTS, and the Conference Board’s survey; however, with a federal government shutdown approaching at midnight, the significance of the date may be diminished. Despite this, FHFA house prices appear to have declined for the fourth consecutive month in July, while the S&P CoreLogic CS index of house prices seems to have recorded its smallest increase in two years.

The Conference Board’s measure of consumer confidence is expected to have decreased slightly. Nonetheless, in light of the labor market’s deceleration, high levels of household debt stress, declining consumer confidence, and reduced wealth accumulation from home ownership, consumption has demonstrated notable resilience. In the recent Q2 GDP revisions, consumption experienced an increase of 2.5% annualized, a notable rise from the initial estimate of 1.6%, and up from 0.6% in Q1. In the three months ending in August, personal consumption expenditures increased at a rate surpassing that of income.