• The U.S. dollar dipped on Monday after retail sales data for September missed economists’ expectations, and as benchmark U.S. Treasury yields consolidated after hitting seven-year highs last week.
Higher 10-year Treasury yields, which on Tuesday shot to 3.26 percent, helped to boost the greenback last week. With yields now having retraced to 3.15percent, investors are looking for fresh impetus for dollar buying.
The U.S. dollar index, which tracks the greenback against a basket of currencies, was at 95.047 as of 8:30 a.m. HK/SIN, after sliding from levels above 95.3yesterday.
The euro EUR= rose 0.14 percent to $1.1578.
The Japanese yen strengthened 0.37 percent versus the greenback at 111.78 per dollar, while Sterling GBP= was last trading at $1.3151, down 0.02percent on the day.
• U.S. retail sales barely rose in September as a rebound in motor vehicle purchases was offset by the biggest drop in spending at restaurants and bars in nearly two years.
But other details of the report from the Commerce Department on Monday were upbeat and suggested that consumer spending ended the third quarter with strong momentum, which should provide a boost to economic growth despite anticipated drags from weak exports and a struggling housing market.
Retail sales edged up 0.1 percent last month after a similar gain in August. Economists polled by Reuters had forecast retail sales increasing 0.6 percent in September.
Retail sales in September rose 4.7 percent from a year ago.
• The U.S. government closed the 2018 fiscal year $779 billion in the red, its highest deficit in six years, as Republican-led tax cuts pinched revenues and expenses rose on a growing national debt, according to data released on Monday by the Treasury Department.
• President Donald Trump said in an interview with 60 Minutes the Saudis could be behind the disappearance of missing journalist and Washington Post contributor Jamal Khashoggi, and if so, the U.S. would inflict "severe punishment." In a clip broadcast on CBS This Morning earlier, Mr. Trump said there is a lot at stake "and maybe especially so because this man was a reporter."
• The interview is his first with 60 Minutes since his post-election conversation with Lesley Stahl in November 2016.
On Sunday, Riyadh vowed to retaliate against any punitive measures from Washington and delivered a pointed reminder that the world’s top oil exporter “plays an impactful and active role in the global economy.”
• Saudi Arabia is preparing to acknowledge the death of Saudi journalist Jamal Khashoggi in a botched interrogation, CNN and the New York Times said on Monday, after U.S. President Donald Trump speculated “rogue killers” may be responsible.
Trump dispatched Secretary of State Mike Pompeo to meet King Salman over the case that has strained the Americans’ relationship with the Saudis, carefully cultivated by the U.S. president.
Khashoggi, a U.S. resident, Washington Post columnist and leading critic of the powerful Saudi crown prince, Mohammed bin Salman, vanished after entering the Saudi consulate in Istanbul two weeks ago to get marriage documents. Turkish officials say they believe he was murdered there and his body removed.
• London and Brussels are nearing the Brexit endgame, but sterling may be subject to big swings regardless of whether they soon cut a deal - keeping investors looking to bet on the next big direction for the currency on their toes.
The pound rose last week to a one-month high against the dollar on hopes the two sides were close to a breakthrough, easing fears of a ‘no-deal’ British exit from the bloc next March.
But sterling traded back at one-week lows on Monday GBP=D3 amid a stalemate over the post-Brexit status of Britain's land border with Ireland, puncturing optimism before an EU summit on Wednesday.
• Italy’s 2019 budget approved by the cabinet on Monday includes a basic income for the poor, lowers the retirement age and offers a partial amnesty to settle tax disputes, Prime Minister Giuseppe Conte and his top ministers told reporters on Monday.
Economy Minister Giovanni Tria denied reports that he planned to resign after the budget has been approved by parliament, and said he was confident he could explain the expansionary package to a worried European Commission.
• Japanese Prime Minister Shinzo Abe on Monday pledged to go ahead with an increase in the national sales tax next October.
Abe said the government will consider tax breaks for durable goods purchases, such as cars and homes, and come up with a scheme to ease the burden on small companies and small retailers once the sales tax is raised to 10 percent from 8 percent.
• The number of Japanese companies affected by the U.S.-Sino trade war has jumped to a third, soaring from just 3 percent in May with firms fretting about prospects for their exports from China as well as slower Chinese demand, a Reuters poll found.
The survey also showed 53 percent of firms were worried about the fallout from the escalating trade friction and that some, albeit still a small percentage, had begun looking at shifting production of exports out of China to other countries.
• Oil prices steadied on Monday, supported by geopolitical tension over the disappearance of a Saudi journalist that has stoked worries about supplies from Riyadh, but weighed by concern over long-term demand outlook.
Brent crude futures for December delivery rose 35 cents to settle at $80.78 a barrel. U.S. West Texas Intermediate (WTI) crude futures rose 44 cents to settle at $71.78 a barrel.
Last week, both contracts fell by more than 4 percent as U.S. stock markets tumbled.
However, rising geopolitical tension between the United States, the world’s top oil consumer, and Saudi Arabia, one of the biggest crude producers, supported prices on Monday.
Reference: Reuters, CBS News, CNN, CNBC
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