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Trending Economic: Afternoon Brief [05 October 15]

Eurozone retail sales came in above expected, 2.3% actual vs. 1.8% expected, but weaker than expected Markit services PMI from across the Europe has weakened EURUSD. Also GBPUSD has slipped lower after UK’s services PMI come in at 53.3, well below an expected 56, we expect EURGBP to head higher as data from the Eurozone has largely remained in line while economic data from UK has underwhelmed.

SEK is up after both services PMI for September and industrial production for August came in above expectations.  New orders from Sweden also grew 9.4% in August; OMXS 30 is up 35 points and SEK 10y yields also jumped to 0.641. We see a continued upside for SEK ahead of inflation and unemployment rate next week.

U.S payrolls increased by 142,000 in September, well below expectations of a 200k rise while unemployment rate remained 5.1%. Employment fell in the mining sector, while growth was seen in the health care and information sector. Overall the financial markets have shifted their expectations of a Fed lift-off to March next year from an earlier held view of a rate rise this year. Equities and bonds have rallied and even crude oil is firmer, we expect the current correction in USD to continue ahead of US retail sales and inflation rate next week. We don’t expect ISM Manufacturing PMI today and U.S Balance of Trade on Tuesday to provide any significant upside in USD even if data exceeds expectations