Despite increased estimates of the cost of the government shutdown on U.S. GDP and the disruption of some government issued economic reports, the U.S. dollar strengthened and U.S stock markets rose on reduced concerns of slowing U.S. growth, optimism over a U.S. China-trade agreement and a much-stronger-than-expected industrial production report released on Friday.
uoyed by US-China trade talk progress, FOMC minutes indicating a more flexible U.S. Federal Reserve Bank and a weaker-than-expected CPI number, the S&P 500 increased 2.5% and the U.S. dollar weakened 0.57%.
erns over weak China and U.S growth primarily responsible for setting the tone.
Continuing concerns of slower global growth compounded by growing concerns of a U.S. slowdown helped push the S&P 500 lower last week moving its year-to-date performance into negative territory for the first time this year.
Up nearly 0.7% through Tuesday on expectations the U.S. Federal Reserve Bank would continue raising interest rates as a result of a stronger-than-expected PPI report the previous week, the U.S. dollar finished the week down almost 0.5% after Federal Reserve Bank Vice Chairman Richard Clarida commented that interest rates are reaching neutral levels and that the U.S.Federal Reserve Bank needed to be aware of any slowing of economic growth.
Initially weakening on the back U.S mid-term election results, the U.S. dollar moved higher on Thursday and Friday with a stronger-than-expected PPI report on Friday and an FOMC statement – coming at the end of a 2-day meeting on Thursday– indicating the Federal Reserve Bank would continue with its tightening policy.