It was a quiet start to Asian trading on Monday with little economic data on today’s calendar and ahead of a week-long national holiday in China starting on October 1. The dollar was mixed, weakening slightly against the yen but making limited gains against the euro.
Last week’s upwardly revised US GDP figures for the second quarter supported hawkish comments by several Fed officials, including Fed Chair Janet Yellen who on Thursday raised expectations of a 2015 rate hike. The week was rounded up by a speech by Kansas City Fed President Esther George on Friday. George said that the conditions to start raising interest rates are there and that acting early means the Fed will “have the luxury” of being able to lift rates gradually. She added that rates are expected to remain “highly accommodative for some time” even after rates start to rise.
The greenback was steady at 120.31 yen in late Asian session but down from Friday’s high of 121.23 yen. The euro drifted slightly lower against the dollar, falling to 1.1171, having hit a high of 1.1214 earlier in the session. Against the pound, the single currency was steady around 0.7361. Sterling opened firmer against the dollar and soon climbed to 1.5209 but headed lower in late Asian trading, dropping to 1.5178.
Crude oil prices extended their losses from Friday on weak global economic growth outlook. US oil futures were down 1% at $45.23 in Monday’s Asian session. Gold was also lower, falling to $1141.80.
Trading is expected to remain quiet for much of the day but personal income and personal spending data from the US is likely to attract some attention later in the US session. Personal consumption expenditure, which is one of the main contributors to US GDP should provide an idea on how growth momentum is holding up in the third quarter. Pending home sales are also due as well as a speech by Chicago Fed President Charles Evans.
But investors are likely to remain cautious ahead of Wednesday’s industrial production figures from Japan and Eurozone flash CPI, Chinese manufacturing PMI on Thursday and of course Friday’s nonfarm payrolls data for the US. Speeches by more Fed officials throughout the week as well as Janet Yellen herself on Wednesday will be watched closely.