Japan’s inflation slowed, risks facing the Bank rises

•     Japan’s inflation slowed, risks facing the Bank rises

•      National core inflation rate eased in August falling more than expected. This adds to concerns that the Bank could eventually take additional easing steps to meet its 2% . Further stimulus could lead to weaker JPY.

•     The dollar index is up approximately 0.6%, on track for its 11th consecutive week of gains:

•      Given the positive sentiment towards the dollar, I believe USD could keep its strength ahead of the final GDP data and strengthen even more if the figures come strong.

•     EUR/USD dipped briefly below 1.2700 on Thursday, but bounced back to trade a few pips below our support-turned-into-resistance line of 1.2760

•      The latest set of weak Eurozone’s data, the recent comments from the ECB President to do whatever is necessary to prevent deflation risk and the absence of any major affecting data today, increases the possibility for further declines.

•     Today:

•      Eurozone:  German Gfk consumer confidence for October and the French consumer confidence for September.

•      US: The 3^rd estimate of GDP for Q2, which is expected to show a rise of +4.6% qoq SAAR, up from the second estimate of +4.2% qoq SAAR Q2. The 3^rd estimate of the core personal consumption index is forecast to have remained unchanged at the Fed’s 2% target. The final U of Michigan consumer confidence sentiment for September.