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At 53.4, down from 54.7 in August, the seasonally adjusted IHS Markit Flash U.S. Composite PMI Output Index pointed to the weakest upturn in business activity since April 2017. The composite index is based on original survey data from the IHS Markit U.S. Services PMI and the IHS Markit U.S. Manufacturing PMI.

The overall moderation in output growth was driven by the service economy, which more than offset an accelerated rise in manufacturing production. Anecdotal evidence suggested that some of the slowdown in overall output growth reflected company shutdowns on the east coast ahead of hurricane Florence. These disruptions contributed to a solid increase in unfinished business during September. Backlogs of work were accumulated at the fastest pace for three months.

(company / ticker / price / change ($/%) / volume)

FedEx (FDX) initiated with a Buy at Berenberg; target $300

Alcoa (AA) initiated with a Buy at Berenberg; target $54

AT&T (T) upgraded to Buy from Neutral at UBS

Excluding the lower sales at motor vehicle and parts dealers, retail sales increased 0.9%.

Sales were up in 8 of 11 subsectors, representing 54.8% of total retail sales.

After removing the effects of price changes, retail sales in volume terms decreased 0.1%.

Sales at food and beverage stores rose 1.3% in July. The gain was led by higher receipts at supermarkets and other grocery stores (+1.2%). Sales at beer, wine and liquor stores (+1.5%) and convenience stores (+3.3%) increased for the fifth consecutive month.

Sales at gasoline stations rose 1.9%, largely stemming from higher prices at the pump as sales in volume terms were relatively unchanged in July.

Excluding gasoline, the CPI increased 2.2%, matching the gain in July.

Prices were up in all eight major components in the 12 months to August. The transportation index rose at a slower pace in August (+7.2%) than in July (+8.1%), but remained the largest contributor to the year-over-year increase in consumer prices.

Year-over-year prices for non-durable goods (+3.8%) increased at a more moderate pace in August than in July (+4.4%). Gasoline prices rose 19.9% in the 12 months to August, following a 25.4% year-over-year increase in July. Prices for water, fuel and electricity, up 2.2% year over year, rose at a slower rate compared with July (+3.0%).

Prices for durable goods rose 1.1% year over year, following a 0.8% increase in July. The purchase of passenger vehicles index (+2.3%) rose more on a year-over-year basis in August than in the previous month (+2.0%). The gain was largely attributable to the greater availability of 2019 model-year vehicles compared with the same month last year.

Since the technical situation on the EURUSD pair seems bullish, investors also focus on some macro data on Friday, mainly the preliminary PMI numbers for September.

The German Markit Services PMI rose notably to 56.5 in September, up from 55.0 previously, however, the manufacturing sector decelerated markedly from 55.9 to 53.7. Therefore, the German composite PMI dipped to 55.3 in September from 55.6 in August.

The services index for the euro zone as a whole ticked higher to 54.7 from 54.4 in the previous month, but the manufacturing sector slowed from 54.6 to 53.3. Overall, the composite PMI slid to 54.2 from 54.5 in August. The single currency eased slightly after these numbers.

Later in the day, the same indicators are expected from the US, with both the sectors seen improving in September, which could be positive for the greenback.

Also, Canadian inflation numbers will be released and the market expects a slight downtick in the inflation rate. On the plus side, Canadian retail sales are forecast to improve month-on-month. Mixed data might cause some zig-zag movement on the USDCAD pair.

Analysis and opinions contained, referenced or provided herein are intended solely for informational and educational purposes. Personal Opinion of the Author does not represent a statement or an investment advice made by TeleTrade. Indiscriminate reliance on illustrative or informational materials may lead to losses"

Borrowing (Public sector net borrowing excluding public sector banks (PSNB ex)) in August 2018 was £6.8 billion, £2.4 billion more than in August 2017; this was the largest August borrowing for two years (since 2016).

Borrowing (PSNB ex) in the current financial year-to-date (YTD) was £17.8 billion: £7.8 billion less than in the same period in 2017; the lowest year-to-date for 16 years (since 2002).

Borrowing (PSNB ex) in the financial year ending (FYE) March 2018 was £39.9 billion: £5.6 billion less than in FYE March 2017; the lowest financial year for 11 years (since FYE 2007).

Debt (Public sector net debt excluding public sector banks (PSND ex)) at the end of August 2018 was £1,781.9 billion (or 84.3% of gross domestic product (GDP)); an increase of £15.9 billion (or a decrease of 1.8 percentage points) on August 2017.

Eurozone business activity grew in September at the second-weakest rate since late-2016, according to preliminary PMI survey data, as manufacturing growth was subdued by export orders stagnating for the first time in over five years. The IHS Markit Eurozone PMI fell from 54.5 in August to 54.2 in September, according to the flash reading, which is based on around 85% of usual replies. Although still well above the 50.0 nochange level, the latest reading was the lowest since November 2016 with the exception of last May.

• Input cost inflation accelerates at fastest pace since March 2011.

• Geopolitical tensions weigh on sentiment, with Future Output Index dipping further

Commenting on the Japanese Manufacturing PMI survey data, Joe Hayes, Economist at IHS Markit, which compiles the survey, said: "The manufacturing sector business cycle continued along its upward path in September, according to the flash survey, continuing a trend which PMI data indicates first began just over two years ago. Indeed, business conditions remained robust despite a number of natural disasters over the past month. "Growth in the goods-producing sector continues to be supported by increases in new orders. Although recent demand pressures have been primarily driven by the domestic market, latest flash data pointed to the first rise in export sales since May amid ongoing global trade frictions. "That said, business sentiment dipped further in September to a 22-month low as firms remain uncertain to how international trade tensions could impact the Japanese economy."

The latest reading was still the second-best seen since February and confirmed a slight improvement in the average pace of growth during the third quarter compared with that observed in the three months to June.

Commenting on the flash PMI data, Phil Smith, Principal Economist at IHS Markit said: "The service sector was left to do most of the heavy lifting in September, as manufacturing put in its worst overall performance since August 2016. Service providers enjoyed the biggest boost to new business in over seven years in a further sign of strong domestic demand. Manufacturing new orders, however, were broadly flat as export sales declined for the first time in more than three years".

At 53.6 in September, down from 54.9 in the previous month, the IHS Markit Flash France Composite Output Index remained above the crucial 50.0 nochange mark for a twenty-seventh month in a row, with the latest figure signalling a solid increase in output across the French private sector. That said, the pace of expansion was at a 21-month low. A broad-based slowdown was recorded, with both the manufacturing and service sectors registering weaker gains during September.

EUR/USD

Resistance levels (open interest**, contracts)

$1.1900 (2939)

$1.1874 (2938)

$1.1862 (877)

Price at time of writing this review: $1.1786

Support levels (open interest**, contracts):

$1.1720 (2311)

$1.1681 (1563)

$1.1638 (3861)

Comments:

- Overall open interest on the CALL options and PUT options with the expiration date October, 15 is 88954 contracts (according to data from September, 20) with the maximum number of contracts with strike price $1,1900 (5504);

GBP/USD

Resistance levels (open interest**, contracts)

$1.3370 (2875)

$1.3347 (2448)

$1.3334 (1710)

Price at time of writing this review: $1.3245

Support levels (open interest**, contracts):

$1.3148 (1069)

$1.3097 (556)

$1.3070 (924)

Comments:

- Overall open interest on the CALL options with the expiration date October, 15 is 29306 contracts, with the maximum number of contracts with strike price $1,3200 (2875);

- Overall open interest on the PUT options with the expiration date October, 15 is 32912 contracts, with the maximum number of contracts with strike price $1,2800 (2478);

- The ratio of PUT/CALL was 1.12 versus 1.14 from the previous trading day according to data from September, 20.

* - The Chicago Mercantile Exchange bulletin (CME) is used for the calculation.

** - Open interest takes into account the total number of option contracts that are open at the moment.