By Publishing Editors USD near flat after US PPI follows CPI higher; yen soft, EUR and GBP slightly bid Market Briefs • US producer prices flat; higher monthly core inflation expected in September • US Sep PPI Machine Manuf'ing 184.8, 185.1 prev, 185.0 r'vsd • US Sep PPI Final Demand YY 1.8%, 1.6% f'cast, 1.7% prev, 1.9% r'vsd; MM 0.0%, 0.1% f'cast, 0.2% prev • US Sep PPI exFood/Energy YY 2.8%, 2.7% f'cast, 2.4% prev, 2.6% r'vsd; MM 0.2%, 0.2% f'cast, 0.3% prev • US Sep PPI ex Food/Energy/Tr YY 3.2%, 3.3% prev; MM 0.1%, 0.3% prev, 0.2% r'vsd • U.S. Treasury's Shambaugh: would like to see IMF pay more attention to China's external imbalances and industrial policies • Shambaugh says has been encouraged by China’s statements about domestic stimulus plans • US Treasury calls for new IMF, World Bank steps on liquidity pressures • Traders keep bets on 25 basis point Fed rate cuts in November, December • Big US banks say consumers are still strong, despite economy fears • US Oct U Mich Sentiment Prelim 68.9, 70.8 f'cast, 70.1 prev • BoC Q3 business survey outlook shows demand is weak, firms have excess capacity, price growth continues to slow • BoC survey: most firms expect interest rates to decline by between 75 bps and 125 bps in the next 12 months • BoC survey: 16% of firms expect Canada to be in a recession over the next year, down from 20% in Q2 • Canadian firms see sluggish conditions, hope rate cuts will boost demand • Canada's jobless rate dips in Sept, weakens case for 50 bps rate cut • CA Sep Employment Change 46.7k, 27.0k f'cast, 22.1k prev • CA Sep Unemployment Rate 6.5%, 6.7% f'cast, 6.6% prev • CA Aug Building Permits MM -7.0%, -5.5% f'cast, 22.1% prev, 20.8% r'vsd • CA Q3 Business Outlook Future Sales 13%, 1% prev Looking Ahead - Economic Data (GMT) • 13 Oct 01:30 CN Sep PPI YY -2.5% f'cast, -1.8% prev • 13 Oct 01:30 CN Sep CPI YY 0.6% f'cast, 0.6% prev; MM 0.4% f'cast, 0.4% prev • 13 Oct 21:30 NZ Sep Business PSI 46.8 prev Looking Ahead - Events, Other Releases (GMT) • Oct 13 20:15 RBNZ’s Orr speaks about improving Māori access to capital in Wellington • Oct 14 08:30 BoE’s Dhingra speaks at the RBI's 90th anniversary high-level conference in London • Oct 14 19:00 Fed’s Waller speaks on the economic outlook before a conference in Stanford Macro Themes in Play • The dollar index eased Friday amid profit-taking after a nine-day advance and lower short-term Treasury yields following a batch of soft U.S. data. • U.S. producer prices were unchanged in September on a monthly basis and the University of Michigan consumer sentiment index for October unexpectedly fell. • Bank shares surged after JPMorgan Chase and Wells Fargo beat expectations in the third quarter. • Canada's economy added an above-forecast 46,700 jobs in September and the unemployment rate unexpectedly decreased. • Canadian firms are still seeing weak demand and slow sales growth but conditions improved marginally in the third quarter, according to a Bank of Canada survey released on Friday. • Britain's economy grew a below forecast 0.2% in August after two consecutive months of stagnation. • Treasury 2-year yields fell 6 basis points as the yield curve steepened. The 2s-10s curve was up about 3 basis points to +13.6bp. • The S&P 500 rose 0.64% and reached a new record as bank shares surged • Oil was down 0.49% but was set for a second weekly gain amid supply disruption concerns. • Gold rose 1.08% amid Fed rate cut hopes • Copper advanced 1.44% as traders await further details on the Chinese stimulus package Saturday. • Heading toward the close: EUR/USD +0.06%, USD/JPY +0.32%, GBP/USD +0.10%, AUD/USD +0.27%, DXY -0.13%, EUR/JPY +0.42%, GBP/JPY +0.46%, AUD/JPY +0.62%. Commentary and Analysis EUR/USD-Shorts had to play some defense into the weekend • NY opened near 1.0935 after 1.0953 traded on EBS overnight • 1.09265 traded in early NY but bears ran out of gas, buyers emerged • US yields US2YT=RR fell, DE-US spreads US2DE2=RR tightened • US$ selling took hold;
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