U. of Michigan Consumer Confidence at Highest Level Since September 2007
Despite weak growth, headwinds out of Asia and Europe, not to mention the impending fiscal cliff at home, and tepid housing and labor market recoveries, American consumers are more confident than they have been in recent years. The U. of Michigan preliminary consumer sentiment reading for October was outstanding: it came in at 83.1, well-above the 78.0 expected, and is the highest such reading since September 2007.
The consumer sentiment reading makes perfect sense, however, when considered in context of the stock market, however, as Senior Technical Strategist Jamie Saettele pointed out in the DailyFX Real Time News feed. Although the S&P 500 and the U. of Michigan Confidence report have an insignificant +0.193 monthly correlation, it does appear that there is a bit of a lag/lead effect here.
USDJPY 1-minute Chart: October 12, 2012
Charts Created using Marketscope – Prepared by Christopher Vecchio
Following the release, the USDJPY, perhaps the most sensitive pair to US economic data, initially rallied higher on the strong print, from 78.36 to as high as 78.46. However, with the data not necessarily reflecting a material change to the underlying fundamentals of the economy – something that would make the Federal Reserve alter its ultra-dovish monetary policy – the USDJPY quickly fell back to its prerelease range, and was trading at 78.38 at the time this report was written.
--- Written by Christopher Vecchio, Currency Analyst
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